Big ticket property transactions forecast at €1Bn
Portugal’s real estate investment market remained strong throughout the first half of 2020 according to consultants CBRE.
This was despite the obvious impact of Covid-19 but, taking into consideration some transactions currently underway in the Portuguese market, the expectation for the second half of 2020 is that investment in real estate for income return will stand at around €1Bn.
This was the conclusion of a study undertaken by CBRE Research that took stock of the activity in the sector for the first half of 2020 and which also made projections for the market until the end of the year.
According to Francisco Horta e Costa, the General Director of CBRE, “This year, which was marked by the pandemic, we saw a strong first quarter which ensured a record first half of the year.”
However, Horta e Costa warned that obviously the strength of the market seen in the opening months of 2020, some of it resulting from transactions in the pipeline during the last quarter of 2019, would get watered down (as a result of the pandemic) with an impact on a year which was initially forecast to be a bumper one for the sector.
That said, there is a lot of liquidity that can be applied to the Portuguese sector as Portugal continues to be a preferred investment country for overseas investors, unlike previous crises when investment shied away or fled from the country.
“Both national and international investors are active in the market and there are transactions underway which we believe will be very positive for market performance, achieving investment amounts higher than those seen in previous financial crises,” he said.
Real estate bought for investment and income from rents achieved a record amount of €1.7Bn in the first half of 2020.
Half of that investment turnover was allocated to retail, 27% to hotels and 22% to offices. CBRE highlights three big business deals during this period, namely the acquisition of Colombo, CascaiShopping, NorteShopping and Vasco da Gama shopping centres by the French insurer Allianz and the Finnish pension fund Elo (50%) from the Sierra Fund which owns part of the shopping centres portfolio.
The companies closed the agreement for the creation of a strategic joint venture composed of six reference shopping centres in Iberia, with a gross asset value that exceeds €3Bn (€1.8Bn on a proportional basis).
The purchase of a portfolio containing the 10 Real Palácio hotels by the group Palm Invest and also the portfolio of eight office buildings by Cerberus were other big ticket deals in 2020.