Real estate funds boom in H1
The value of real estate fund portfolios has been increasing this year with three fund management entities enjoying growth of 100% or more. The fund run by Square AM for bank Crédit Agrícola is a case in point. Its value of the fund has grown 7 times this year alone.
And commercial real estate investment funds for rental are the assets that currently bring in the greatest returns in the short, medium and long terms according to the newspaper Negócios.
Looking back over the past 10 years it is these funds which have contributed to saving the Portuguese financial market from otherwise negative returns according to data from the Portuguese Association of Investment Funds, Pensions and Patrimony (APFIPP).
Among the categories of assets that have done well and whose annual incomes to June 30 have not fallen below 4% in any of the maturity categories of one, two, three, five and 10 years, 10 year investments in commercial real estate in Portugal have offered 4.57% in relation to 0.64% obtained in open funds and -2.65% in closed development funds. The average profitability of all the funds taken together was 1.12%.
For the total market, profitability has increased with an average of 4.31% for past year, with property rental funds doing the best at 4.65%. This was followed by open funds with 3.5% and closed development funds at 0.9%.
The APFIPP has created a new index to replace the one it had because it was not keeping pace with real estate market fund activity in Portugal which has grown exponentially since the original index was created in 2002, growing from 44 funds that year to 233 in 2022.
The new index now comprises 65 funds divided into three categories and in order to be included the funds must be managed by APFIPP partners, be active for at least one year, and offer positive returns on investment.
Moreover, open real estate funds are required to have a minimum of €50 million and closed real estate funds must have properties worth a total of at least €20 million.
The various real estate entities held €12.5Bn in real estate assets in portfolios under management. This represents an increase of 0.3% in relation to May, and when looking over the past 12 months the increase is 19.1%.
Real estate asset management funds which are managing the lion’s share of property assets in Portugal are Square Asset Management with €1.6Bn, Lynx Asset Management with €1.3Bn and Interfundos with a €1Bn.
And there are three real estate asset management funds that have grown by 100% or over in the past 12 months: Crédit Agrícola Gest (602.6% with €118.9 under management and a 1.1% market share, Sierra IG SGOIC (153.3%, €623.5, 5.6%), Southcap (146.8%, €440.8 and 3.9%, Imorendimento 40.5%, €137.1 and 1.2%, and Lynx Asset Management 21.4%, €897.1, 8%).