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hospitality Market News: Spanish Real Estate Intelligence

New Mixed-Use Development to Go Up by Porto’s Praça D. João I
23 June 2020 The former Casa Forte - which took up a large part of the city block by the Praça D. João I in downtown Porto, will be the site of a new mixed development, called the Bonjardim City Block, including housing, shops and a hotel. The project had been initially announced three years ago, and construction started soon after, but later came to a halt, leaving a massive hole on the land. Initially, the development was the fruit of a public-private partnership between SRU Porto Vivo, which is now wholly owned by the Porto City Hall, and Millennium bcp’s real estate management arm. The project, under development on a 28,500-m2 plot of land, stems from a set of parcels of land on the block between the Rua Sá da Bandeira, Rua do Bonjardim and Rua Formosa, near the city’s Bolhão Market and Avenida dos Aliados. An international investment fund, which won the tender by two real estate funds managed by Interfundos (AF Portfólio Imobiliário and Imopromoção, both controlled by  Millennium BCP) will take over the development of the project. Original Story: Idealista - Elisabete Soares Translation/Summary: Richard D. Turner
 
Study by EY Foresees 2-Year Impact on Real Estate Sector by Covid-19
23 June 2020 A survey carried out last month by the consultancy EY, predicts that the economic damage wreaked by Covid-19 will last 24 months. While market commentators and pundits have been speculating about the impact of the coronavirus, EY’s Real Estate team carried out an extensive survey of 300 real estate professionals from different sectors of the real estate industry in Portugal. The general conclusion has been that the government measures to protect the economy and prevent a future crisis will largely determine how the effects of the current pandemic play out in the near-to-medium term. Most of the study’s respondents believe that while confidence is sure to suffer a slight hit, investment plans are likely to undergo a temporary suspension. Half of the respondents expect a crisis in the sector, but think that it will last no longer than 12 months. Those same respondents believe that the industry will regain the highs of 2019 will within two years. Demand in the residential segment is forecast to fall by 40%, while prices should decrease by 20% over the next six months., with an eventual rebound over the next 24 months.  The luxury segment, primarily sustained by foreign investors, is likely to escape much of the expected impact. The demand for offices is also expected to drop by 20%, again with a recovery over the next 24 months. Prices, however, will decrease by a lower amount, 10%. The pandemic’s effect on the retail segment, though, is likely to be more severe. The logistics and industrial segments are forecast to undergo a period of adjustment to the new reality. The pandemic revealed weaknesses in supply chains which have strengthened the existing movement to focus on last-mile solutions. The logistics sector, in particular, is likely to benefit from an increased focus on e-commerce and faltering sales at retail shops. Possibly one of the worst-hit sectors will be that of tourist accommodations. Demand is likely to fall by 40%, with a 30% decrease in asset values, a 50% decrease in RevPAR and a deeper downturn over the next 24 months. Original Story: Jornal Económico - João Moura, Head of Real Estate, Hospitality, Construction & Infrastructure EY, Transaction Advisory Services Translation/Summary: Richard D. Turner  
 
Lisbon to Invest in Attracting Tourism to Offset Pandemic
19 June 2020 The Lisbon Regional Tourism Board (ERT-RL) will invest up to 600,000 euros to attract Portuguese tourists to the region. Over the next three months, the public body will launch low-cost packages focusing on accommodations and experiences, all at lower prices than before the pandemic. In 2017, tourism accounted for 19.7% of Lisbon's GDP, according to a study by the management consultancy Roland Berger. Packages of experiences (including, among others, boat trips, visits to wine cellars and urban art routes) will be offered for 20 euros. A meal and performance of fado will cost 25 euros, while a Lisboa Card, which provides access to the city's participating museums and monuments, is on sale for just 12.5 euros. Accommodation and experience packages will consist of accommodation for two nights, a 24-hour Lisboa Card and two experiences, for two people. Prices, which vary depending on the accommodations, will cost between 160 and 240 euros. In all, the programme will invest more than half a million euros, €300,000 of which will go to marketing campaigns. Another €150,000 will go to payments to the companies offering the experiences, with an additional €100,000-€150,000 going to fado houses. Original Story: Jornal de Negócios - Rafaela Burd Relvas Translation/Summary: Richard D. Turner