Overview – APRIL
Corporate real estate market activity was relatively restrained in April in Portugal this year, with just three significant transactions making the news. Market growth, however, continued strong. Portugal’s National Statistics Institute reported that housing prices had risen for the 24th consecutive month to an all-time high of 1,247 euros per square. The data, which showed year-on-year growth of almost 7% across the country as a whole, stemmed from bank valuations of homes conducted in the course of assessments of applications for mortgages. The Algarve registered the fastest growth in Portugal, coming in at 12.6%. Confidencial Imobiliário also stated that the number of transactions of residential properties had risen 16% in 2018 compared to the year before, largely erasing the losses of the financial crisis.
Predictions for continued growth in Portugal’s tourism and hospitality sector also remain rosy. The World Travel and Tourism Council forecast that the sector would grow by 5.3% in 2019, twice the average for Europe in general. Robust levels of tourism would have a knock-on effect on the Portuguese economy, as the sector accounts for approximately 20% of GDP and nearly 10% of employment. The obvious corollary to such a significant dependency on one sector is that a potential fall in tourism would have an equally broad impact on the country’s fortunes.
Imofundos sold the building that housed Lisbon’s Civil Registry services desk to AG Capital at an undisclosed price. The developer plans to redevelop the office building, which is located at 13 Praça Francisco Sá Carneiro, in Areeiro, Lisbon, into residential flats. The building has seven above-ground floors, with a total gross construction area of roughly 5,000 m2, with approximately 3,700 m2 of above ground area. Rising prices in the region are attracting a series of Portuguese and international developers looking to convert offices into new residential developments.
LVMH Moët Hennessy Louis Vuitton (LVMH), a French multinational conglomerate headquartered in Paris that has grouped a series of aspirational brands into a single luxury goods group, announced that it had acquired the luxury hotel Reid’s Palace as part of its acquisition of the Belmond Group. The 158-room hotel has four hectares of sub-tropical gardens, four restaurants, a spa, and three pools. The Belmond Group is a hotel and leisure company that operates luxury hotels, train services and river cruises around the world. The transaction, worth €2.832MM, was concluded in December and received shareholder approval in February.
The Israeli Selina Group acquired a former palace in the São Bento neighborhood of Lisbon as part of a plan to build a new hotel. The group expects to invest a total of €13 million, including the acquisition of the property and its subsequent redevelopment, to build a new boutique hotel in a building that occupies an entire city block. The property, which was sold by the Mendia family for an unspecified sum, is expected to open in the first quarter of 2020. The 280-bed hotel will have 3,500 square meters of surface area and will include spaces for coworking, yoga, music concerts, and art exhibitions