The Portuguese Real Estate Market in October

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October proved to be the month where real estate investments revived after the holidays. Even though the previous month was remarkable in terms of news in the real estate market, this first month of autumn brought major announcements on all types of investments in the various real estate sectors.

Given the lacunae in the housing supply, the Housing and Urban Rehabilitation Institute announced the construction of 375 affordable rental homes in Almada and Setúbal. The investment, which will amount to approximately 52 million euros, will involve three new developments totalling 375 homes, aimed at the affordable rental market, on land owned by the Institute in the municipalities of Almada and Setúbal.  Two of the developments will be in Almada, São Francisco Borja and Três Vales, while the third is in Varandas do Sado, Setúbal.

Meanwhile, The Central House acquired its first asset in Portugal through the Hostel Experience Europe Fund, FCR, created two years ago by Orienta Capital. The investment is a Hostel in the historic centre of the Portuguese city of Porto. The acquisition aims to make the chain a leader in Spain and Portugal for this type of tourist accommodation, in a planned investment of more than 120 million euros over five years.

Once again, Portugal was in the news, having been elected the Best Country in the World by Condé Nast. The magazine’s readers voted for the Readers’ Choice Awards 2021 and placed Portugal at the top of the table of the twenty best countries. The hotel São Lourenço do Barrocal, in Alentejo, was elected Iberian Peninsula’s Best Hotel. Portugal topped out rivals such as New Zealand, Japan, Morocco, Sri Lanka, Italy, Iceland, Greece, Croatia, and Turkey.

Residential

Also in early October, the family-centred residential development Gaia Hills was unveiled, which will be developed by the Belgian groups Thomas & Piron and Promiris, in a total investment of around 85 million euros.  The development is being built in the riverside area of Vila Nova de Gaia, with a project that envisages the construction of eight residential buildings totalling approximately 256 flats, from studios to five-bedroom apartments. Projected with four to five floors, Gaia Hills will have a total aboveground construction area of around 30,500 m2.

Meanwhile, Bondstone will start the construction of a €15 million project in Cascais. The residential development, named The Coral, will be composed of 15 exclusive one to four-bedroom units. Through its subsidiary Louvre Properties, the Bondstone group has started the construction of its first residential project in Cascais, in Gandarinha. More than 50% of the units in The Coral have already been reserved. The conclusion of construction is scheduled for the last quarter of 2023.

The month was already halfway through when Nolon announced the launch of Polima Hills in a 10-million-euro investment. Located in Cascais, the development has 26 flats of various sizes and five shops. With an excellent location, right at the gates of the capital, the new development brings much-needed housing at the gates of Lisbon.

With October nearly ending, Mondego Capital Partners announced a €50-million investment in Portuguese real estate. The developer will bulk up its portfolio by acquiring new projects in historic neighbourhoods such as Baixa-Chiado/Alfama, Avenida Sidónio Pais and Avenida 5 Outubro. The investment will add a set of unique buildings for residential projects, with special emphasis on creating large residential areas, to Mondego Capital Partners’ portfolio.

Retail

Glicínias Plaza reopened in October after refurbishment works after a 40-million-euro investment. The shopping centre in Aveiro gained two new floors and more than 60 new tenants, after undergoing a complete refurbishment which included additional parking. The building now has an additional 13,000 square metres, increasing its gross lettable area to a total of 41,000 square metres. In total, Glicínias Plaza will have more than 120 shops, becoming the largest shopping centre in the region.

Logistics

The North American bank Goldman Sachs announced that it would invest one billion euros in logistics assets in the Iberian Peninsula. It intends to invest in the construction of warehouses in Portugal and Spain over the next three years through its subsidiary Newdock. The recently created company has been operating since the beginning of the year and already has a portfolio of seven logistics projects under development in Spain. Though Newdock has made its intention to invest in Portugal clear, no concrete plans have been announced to date.

Hotels

Once again, and for many months now, the hotel sector stood out from the rest due to a series of significant investments. The former monastery of Arouca is to be converted into a luxury hotel in a €5.9-million investment by Mesquita de Sousa Hotels & Resorts. The Mosteiro de Arouca will become a five-star hotel after being auctioned under Portugal’s Revive program. The MS Collection Mosteiro de Arouca will have fifty-six rooms, a spa, indoor and outdoor pools, a paddle tennis court, a top-flight restaurant, and other features.

Earlier in the month, the construction of Hotel Mundet in Seixal was announced, in an investment of around 7.6 million euros. Located in an old cork factory in Seixal, construction has already started after a few-month hiatus. The new 4-star hotel will have eighty-four rooms, a business centre, spa, health club, restaurant, pool, bar, and underground parking. The future hotel is scheduled to open in the summer of 2022.

Meanwhile, in the Alentejo, an 8 million euro investment was announced in a Boutique Wine Hotel, restaurant and winery, which is under construction near Quinta do Paral, in Vidigueira. In addition to a new winery and investments in the wine production process, Quinta do Paral will focus on wine tourism, including a Boutique Wine Hotel comprising twenty-three luxurious rooms and a restaurant.

NPL’s and REO’s

SPX – International Asset Management, after acquiring the prestigious tourist-residential complex The Keys, finalised a deal with Caixa Geral de Depósitos to boost its portfolio with an additional 850 beds in Quinta do Lago. The firm bought mortgage loans secured by two plots of land for real estate development that occupy a total area of 7.6 hectares within that Algarve resort.

Meanwhile, Millennium bcp announced that it would sell another 100 million euros in bad debts and real estate. The so-called Lúcia Project comprises a €60-million portfolio of non-performing loans and real estate assets totalling another 50 million euros. KPMG will lead the sale.

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