Commercial Property: 2020 closes with €2.8Bn
Portugal’s commercial real estate sector closed 2020 with an estimated €2.8Bn investment according to consultants Cushman & Wakefield.
It represents the third best year ever terms of investment for the decade, the best being 2019 and 2018 respectively, despite the pandemic having a 14% negative impact on commercial real estate.
And as for the future, the expectations are modestly optimistic and will depend on the effectiveness of the vaccine against the Coronavirus.
“2020 was an extremely unusual year, with some sectors displaying some resilience,” said Andreia Almeida, director of Research on Monday during an online presentation.
The office market was not such a case. Greater Lisbon closed 2020 with 135,000m2 new take-up, the lowest amount for the past six years and with rents at around €23 per square metre. In Porto there was an increase in take-up of around 36% to 45,400 square metres, with rents of €18 per square metre.
The retail sector was one of the most affected by the pandemic, having suffered a sharp retraction during the State of Emergency between March and May. Sales fell 2.8% between January and October while new shop openings fell 60%.
In 2020 there were 50,700 square metres of new commercial space take-up, with 41,200 square metres of future offer expected to come on line.
Another sector badly affected by the pandemic, specifically because of the more restrictive measures, was hotels, 2020 saw 20 new hotels open, with a total of 2,700 rooms, most of them four star.
To 2023, Cushman expects 190 new hotels, but it is probable that this number will be reviewed downwards.
The industrial sector saw “greater growth” and ended the year with more than double the volume of take-up. The impact was particularly strong in online trade. However, Cushman’s research revealed, “a lack of quality offer having contributed to speculative exploitation, which is not that common.”
Of this total €2.8Bn of investment, much of which was applied in retail, 75% came from foreign investors and €720 million from national investors. There were three big deals that marked the year: the sale of Sierra Prime for €800 million, the sale of the Hotéis Real for €300 million and the sale of the business park Lagoas Park for €421 million.