Real Estate investment to €1.173Bn to September

Investment in commercial real estate in Portugal stood at €1.173Bn to September and could end the year at €2.5Bn according to data released by the consultants JLL.

The company states “as a result of the recovery felt in the previous quarter, investment in commercial real estate in Portugal accelerated considerably in the 3rd quarter of the year, totalling €583 million invested” and with “this amount being equal to the volume of investment captured in the entire first half of the year, bringing total investment to €1.173Bn” states JLL in its quarterly study Market Pulse.
From the amount transacted in the third quarter, 53% is from “office asset transactions, while 41% is from hotel assets”, JLL states.

OFFICES

In the office market, decisions are still on hold, resulting in a slowdown in the demand for office spaces, with a direct impact on the take-up evolution.
JLL states that one of the biggest transactions of the year resulted from the sale of a portfolio of 15 office buildings in the Quinta da Fonte business park in Oeiras for €150 million, while the sale of the JQ1 office building in East Lisbon for €98 million also stands out as an important deal.
Office transactions made up 50% of annual investment (€582 million) with 80,650 m2 of office space occupied in Lisbon, with the occupation recovery matched by a stability in rents.

HOTELS

In the hotel sector, there were several big-ticket sales such as the Tivoli Vilamoura and Carvoeiro hotels €148 million, showing “this market is recovering at a good pace after the fall in tourism in tourism”. All told, hotel transactions represented a €256 million slice (22%) of the total commercial real estate transaction pie worth €1.173Bn.

RETAIL

The retail sector was one of the most affected, given the huge drop in sales due to the closing of stores and to restrictions within stores, which continue to have an impact on sales.

INVESTORS

In terms of investment, the feeling is positive. Despite the adversities, the Portuguese market continues to have active investors in the market.

RESIDENTIAL

As for residential, the sector is resilient. To date, prices have remained stable, sustained by the imbalance between supply and demand.
Pedro Lancaster, who is the managing director of JLL Portugal said, “We expect this rate of growth to continue possibly reaching €2.5Bn the end of the year given the uptick in the speed of transactions and the increased appetite of investors to diversify their investment targets both in terms of the type of properties and their locations”.
From the amount transacted in the third quarter, 53% is from “office asset transactions, while 41% is from hotel assets”, JLL states.
JLL states that one of the biggest transactions of the year resulted from the sale of a portfolio of 15 office buildings in the Quinta da Fonte business park in Oeiras for €150 million while the sale of the JQ1 office building in East Lisbon for €98 million also stands out.
“In housing, compared to the mere resilience seen in 2020, the last quarter has seen increased market vitality with the turnover of residential sales now aligned with the record levels achieved in 2019, with a strong demand

ALTERNATIVES

Alternatives, (i.e., kinds of investment in which investors invested their money in property that is other than through a conventional property investment structure through funds and REITS etc, captured 18% of the amount invested with a total of €218 million.