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The Portuguese Real Estate Market in December

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Algarve in Portugal

In 2020, which was almost entirely defined by the dynamics of the rolling crises generated by the Covid-19 pandemic, nevertheless saw some measure of stability in the real estate sector. Real estate transactions continued to rise in December, demonstrating a remarkable level of continuity since March in the face of such daunting circumstances.

The Portuguese government’s Council of Ministers approved an overhaul of the regulatory framework underpinning the Golden Visa programme, as it is popularly known. The new measure will halt further real estate investments through the programme in the most sought-after regions of the country, Greater Lisbon and Greater Porto. The government is seeking to redirect investment to Portugal’s lower-density interior, which is less developed.

The State Budget for 2021, which was approved in the previous month and foresees impacting changes in the real estate sector, also marked December. Market watchers fear that a decrease in the influx of foreign investment, together with an increase in the tax burden, will further burden the sector, which has already been roiled by the pandemic. It is worth recalling the role that the real estate market has played in recent years in Portugal, where domestic, and above all, international investment has boosted country’s economic recovery.

Towards the end of the month, the market for portfolios of non-performing loans was enlivened by the sale of BCP’s Ellis and Webb Projects Novo Banco’s Carter. The Ellis Project was initially valued at 300 million euros, but changes to its composition lowered the valuation to around 170 million euros. The more granular Webb Project had an initial value of 450 million euros, though, once again, changes to the portfolio are expected to have cut that in half. There is, however, still no target date for the completion of both sales. Novo Banco confirmed the sale of a bad-debt portfolio with a gross value of 79 million euros, called the Carter Project, for 37 million euros.

Offices and Services

The office segment of the market has also sent encouraging signals. Foz Vintage announced a €120-million investment in its World Trade Center project, a business complex located in Carnaxide. Construction is scheduled for completion in the first quarter of 2022.

Another sector that has recently captured the attention of investors is Student Residences. Following a strategy to consolidate its presence in Portugal, Temprano Capital Partners announced an investment of 40 million euros in a building of premium residences for students and teachers, the Livensa Living Lisboa – Cidade Universitária, that will already take in its first tenants in 2021.


The India-based Sugee Group announced its first investments in the country, developing two housing projects in Lisbon. In the next few years, the group, which first appeared in Portugal in March 2019, intends to invest 150 million euros in the Portuguese real estate sector, according to an announcement in December.

Another new luxury-housing development is also going up in Lisbon, this time stemming from the redevelopment of a former office building that belonged to Caixa Geral de Depósitos. Flats in the development, Linea Residences, will have prices ranging between €600,000 and €3 million.

Zetland Capital is investing 10 million euros in a closed-condominium near Lisbon’s Parque das Nações, the Real Forte III, located on the grounds of a former ceramics factory in the neighbourhood of Sacavém.

In a decentralisation strategy and a focus on the Portuguese middle-class, the Estrutural Group and Rio Capital will invest 14 million euros in the largest development in Vila Franca de Xira.

According to data released by the National Statistics Institute (INE), the price of housing continues its upward trend, rising by 7.1% in the third quarter of 2020.

The real estate sector largely held steady in the face of the pandemic, but it has not escaped entirely without impact. The main change has been in the rental market. Primarily driven by the tourism crisis and its effect on the short-term letting market, the supply of rental housing has increased by 45%.

Public Investment in Real Estate

The Portuguese government plans to move ahead with investments in housing even though it only expects to present the National Housing Programme next year. Meanwhile, the government is focusing on the First Right programme, an instrument of housing policy boosted by European funds through the Recovery and Resilience Plan.

The first contract concluded under the First Law programme outside of mainland Portugal was signed by the Funchal City Council. The €28-million investment will allow the municipality to develop four new social housing areas over the next four years, and acquire and refurbish five properties in the city centre.

At the same time, 600 families in Coimbra will gain support under the same programme, with €33-million in investments to help meet the city‘s housing needs. The funds will permit urban rehabilitation in the city centre and create new rental housing, through the construction and renovation of new and existing properties.


Even at such a difficult time for the sector, investments in tourism keep increasing. Proof of this is the Ombria Resort, a new luxury resort scheduled for inauguration in the Algarve in 2022. The Pontos Group plans to invest 260 million euros in the resort over three phases in the next decade. When completed, the resort will consist of 380 properties.

The Portuguese-French-owned company OCRAM Hotel Management invested about 7.2 million euros in the new “Grande Hotel do Peso”, located in the thermal spa town of Peso, a short distance from Melgaço. Turismo de Portugal is financing the investment to refurbish the currently dilapidated hotel.

In another sign of investor appetite, the Chinese real estate developer Reformosa will build a new hotel in Cascais. The group will invest 4.6 million euros to build the hotel, which will be operated by Hilton and named the Hotel Cascais Curio Collection. The inauguration is scheduled for 2021.

Turismo de Portugal will also open a public tender for the architectural design of the new mega-development going up in Estoril, next to the Escola Superior de Hotelaria e Turismo do Estoril. The mixed-use project represents a total investment of €24 million, 40% of which will be funded by the private sector.

Overall, 89 hotels opened in Portugal in 2020, a sharp increase over the previous year, when 57 hotels were inaugurated. Starting next year, however, the trend will likely reverse due to the pandemic and the delayed construction of new units. According to a study, the hotel sector has been hit hard by the crisis, and there are now more than 160 hotels for sale in Portugal. Even so, the country remains one of the most attractive places in Europe to invest in the hospitality sector.

Aura REE Social Action

In the last month of 2020, Aura Ree Portugal joined the Aconchegar project by donating articulated hospital beds. Sensitive to the COVID-19 pandemic and existing shortages and needs in Portugal, the company entered the Aconchegar initiative, which aims to increase the number of beds available in healthcare support facilities and hospitals. The project was created as a response to a need to bring comfort to those most in need, at a time when the pandemic has revealed weaknesses such as the lack of beds in hospitals and supporting facilities.

Aura Ree Portugal considers this initiative to be a fundamental contribution to the well-being of all and a better future for the healthcare sector.


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