The Portuguese Real Estate Market in November

cascais
Cascais, Portugal

With the end of the year in sight, November brought some welcome good news in the form of new deals and projects, despite the worldwide pandemic. The crisis has taken hold of the world over the past year, and whose knock-on effects threaten every sector of the global economy.  Nevertheless, the coming new year brings reasons for hope for renewal, and an uptick in the economy as a whole and the real estate sector in particular.

Even as tourism levels remain extremely low, Portugal was once again recognised as one of the best destinations for tourism in the world. As a reflection of that, investments in tourism have continued, with an increasing number of international investors eyeing project in the country.

Banks have also continued to invest heavily in mortgage financing, as loan issuance reached a new post-2008 high, according to the Bank of Portugal. At the same time, Novo Banco announced that it was looking to sell a new portfolio of non-performing loans, named Project Wilkinson, worth slightly more 200 million euros, by the end of the year. Talks with three major international investment funds on their potential acquisition of a portfolio of 4,435 homes, the Zip Project, from a group of Portuguese banks are also near to a successful conclusion.

Retail and Logistics

The Fortera Group announced in November that it would invest 100 million euros in the construction of a development in Gaia, known as the Skyline, which will include a hotel, offices, flats, a congress centre and shops.

Three office buildings at the Quinta da Fonte Office Park, in Oeiras, were sold to Signal Capital Partners for 20 million euros. The property, in the office park that attracted the most investment in Lisbon this year, is in an area strategically positioned between Lisbon and Cascais.

M7 Real Estate acquired an 85,600m² logistics portfolio in Portugal through two transactions for a total of €41M, on behalf of a new joint venture with an unnamed Portuguese investment fund, comprising five logistics assets located in Lisbon and Porto; three office buildings in Lisbon; and two retail warehouse units in Greater Lisbon and Madeira.

The VGP group is also investing €80 million in Portugal, with more than 70 logistics complexes in 11 European countries, while also finalising a deal to acquire land to build four additional logistics complexes in the country.

The approval of a project to renovate and develop a retail space on the block in Rossio where the renowned Pastelaria Suíça is located in Lisbon, was also a highlight. The project will see the development of four building with a total surface area of more than 12,000 square metres. The Ageas Portugal Group also announced the sale of the Rialto building in Baixa do Porto, with an area of approximately 4,700 m2, to an unnamed buyer for an undisclosed amount.

Residential

The Portuguese Prime Minister, António Costa, announced a €1.251-billion investment in Social Housing under the Recovery and Resilience Programme. The prime minister is proposing to invest more than 250 million euros in the Lisbon and Porto Metropolitan Areas.

According to data released by the Bank of Portugal, new residential mortgage lending reached a new post-2008 high, above eight billion euros. In the first nine months of the year, the pace of growth held steady, reaching a peak last attained before the financial crisis began in 2008. 

Housing prices rose in Lisbon and Porto in the third quarter of the year.  According to the Residential Price Index, the price of housing in Porto rose by 11.8% in the third quarter of the year compared with the same period in 2019, with prices in Lisbon increasing by 4.4%, according to data from Confidencial Imobiliário.

Even with the 52% drop in investment in Golden Visas in October, Chinese investors are focusing their attention on Lisbon and Porto before the Portuguese government withdraws these cities from its programme next year.

Tourism

In the month of November, Portugal once again awarded great prominence in Tourism at both the global and European levels. At the beginning of the month, the country was distinguished at the World Travel Awards, as the Best Destination in Europe in the 2020 edition for the fourth consecutive year. At the end of the month, Portugal also took prizes at this year’s edition of the well-known “Oscars of Tourism”, in which the regions of Madeira, Lisbon and Algarve won in the categories of best island destination, best’ city break’ and best beach destination, respectively.

Forbes magazine published a list of the best places for Americans to live abroad. The respected business magazine highlighted the city of Braga, the Azores archipelago and the Algarve region in a list of 20 places to live in Europe.

Last month also saw the sale of an aparthotel in the Algarve for 20.65 million euros by Sonae Capital, while the development The Keys in Quinta do Lago sold for 95 million euros. November also saw the opening of the new Moov hotel in Oeiras and the inauguration of the Palmares Ocean Living & Golf Clubhouse in the Algarve.

The international hospitality group Hilton also announced that it would move ahead with three new projects in Portugal. The group will invest a total of 80 million euros in Cascais, Porto and the Azores.

Though there is still no date for the public tender, Sesimbra announced that the Sanctuary of Nossa Senhora do Cabo Espichel, will be auctioned off for a significant new tourist development. The historic site, with its protected architecture and landscape, will be converted into a hotel.

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