Investment Market
The activity of the real-estate market in the last years and the economic indicators show a country more and better prepared for the future, which allows us to look optimistically towards the future.
The volume of transactions in the investment commercial real-estate were close to the two previous years put together and the volumes reached with the program of ARI – Authorization of Residence through Investment in Portugal (ARI - Golden Visa).
The Golden Visa will continue to act in Portugal, keeping the focus on residential actives, and in majority, from Chinese origin. Also, the fiscal benefits for non-habitual residents should continue to attract, for the same market segment, European foreign investors, namely French and from Scandinavia.
This new market dynamic has allowed to leverage many projects that were dependant of internal demand, which had no access to financing, giving a new life to several real-estate promoters and giving an important boost to the urban rehabilitation of the cities, in particular Lisbon, not only due to these programs but also due to the increase in tourism and consequent demand in touristic apartments.
Besides this new paradigm, the actual economic frame of Portugal allows to anticipate an increase of the demand by institutional foreign investors, namely, in office buildings, street shops, logistic platforms and shopping centres, anticipating a very dynamic future and with investment volumes above previous years.
2013, a year marked by the return of the International Investors
Although still away from the golden years of the national real estate investment, and perhaps it will even take some time for us to see again volumes of investment above one million thousand euros, 2013 was surely an inversion year, a year when the market recovered widely the activity, resulting in more that 300 million euros in transactions.
The Portuguese investment market has had a crescent evolution since the beginning of the 21st century, reaching its peak in 2007, year when 1.250 millions were registered and the yields touched their lower point.
However, with the economical growth perspectives, since the beginning of 2013 we observed a crescent interest by the investors, with special change of the business environment after the second half of the year. The recovery of the European economy in general, also had a role in this recovery, but the good quality of the national actives together with the price adjustment and the perception that they would be reaching the lowest point in the cycle were key.
The volume of investment in investment-type real-estate surpassed the 300 million euros in 2013, more that double of the previous year.
The profile of the investors has also changed over the last years. If in 2012 the private investors dominated the investment operations (65%), in 2013, almost 80% of the transaction volume was done by real-estate and traditional funds. Also, the weight of the foreign investment increased from 45% in 2012 to 70% in 2013, what reflects the increase in the confidence in the financial “health” of the country.
When analysing the operations made in the last years, the diversity of actives is evident, as long as well located and with solid contracts, in its majority. Street shops in the commercial areas of the capital, supermarkets rented to renown food retail chains and quality office buildings were the main classes of actives transacted, but also hotels and warehouses are on the list.
The Golden Visa attribution program also played a very important role in the recovery of the Portuguese real-estate patrimony. The estimation for 2013 was of 270 million euros, of which only 8 millions included in this global investment volume were related to commercial investment actives, namely small dimension actives such as stores and office fractions. These Residence Authorizations are attracting every time more foreign investors to Portugal. The origin of these type of investors is mainly Chinese, but there is also demand from Russians, Brasillians or Angolans.