Expected €3Bn in property investment in Portugal

Investment in the Portuguese property market is expected to reach €3Bn in 2019 by the end of the second half of the year according to the consultants CBRE.

Portugal’s investment market was fairly dynamic throughout the first half of 2019 and will continue to be buoyant in the second half according to CBRE’s Research Department.
Francisco Horta e Costa, Managing Director of CBRE Portugal said that investment levels in 2018 stood at around €3.5Bn and that it was unlikely that this kind of record figure would be repeated in 2019.
However, CBRE projections are today higher than they were at the beginning of the year, pointing to an investment turnover of €2Bn to €2.5Bn forecast in January 2019. If these forecasts materialise, then by the end of the second half of 2019 Portugal will have enjoyed its second best year in terms of real estate investment in Portugal and the fourth year in which values exceeded €2Bn.
For the first time ever, the hotel sector was the area which attracted the highest slice of the investment pie in terms of capital (39%), spurred by investor interest in less traditional sectors and which are more risky in terms of operational costs, but were also encouraged by strong numbers in a segment that is very active in Portugal.
According to the latest overseas visitor numbers from the INE (National Statistics Institute) for numbers passing through Portuguese airports, there was a positive growth of 7.1% for the period January to May 2019 with a +1.8% Revpar.
CBRE also highlights the transaction of nine hotels, including the sale of three Tivoli hotels from the Minor Group in Lisbon to the US fund Invesco and the purchase of a building for a hotel development, also in Lisbon, by the German fund Patrizia.
The commercial (retail) sector was responsible for 29% of the total invested in real estate for the period under analysis while offices took a 23% slice. Investments in commercial assets included the sale of five shopping centres, with the expectation of the sale of a further five by the end of the year — a number of transactions greater than in 2018, which saw the sale of seven shopping centres, although the amount of capital involved will be a lot less this year since the shopping centre assets are smaller in size.
Lack of modern office space continues to be a problem for Lisbon with CBRE’s Cristina Arouca saying, “In Lisbon the problem of a lack of office space is far from being solved and will likely get worse over the next two years since the current market availability rate is less than 6% and the lowest ever.”
“We do not expect a significant increase while large-scale projects do not moved forward, so there has effectively been a reduction provoked by the reconversion of various office buildings into housing or for tourism units.”