npl-reo Market News: Portuguese Real Estate Intelligence

The Portuguese Real Estate Market in April
April appeared again almost like a breath of fresh air, as the real estate sector continued to perform relatively well despite the pandemic. Proof of the continued resilience came in the form of the news, halfway through April, of the increase in investments in the golden visa programme in the first quarter of 2021. Based on statistics from SEF - Foreigners and Borders Service, the investment captured through golden visas grew to 125 million euros, an increase of 4.5% compared to the same period of 2020. The Portuguese government announced an investment of €3.5 billion to build a giant data centre in Sines. The investment comes from Start Campus, a company owned by US-based Davidson Kempner Capital Management LP (Davidson Kempner) and the British firm Pioneer Point Partners. With construction due to start in 2022, involving 900 people in the first phase and up to 2,700 in total, Sines 4.0 is expected to open the first of the five projected buildings by the end of 2023. With total planned investments planned for Portugal of 20 million euros, Kempen and the pension fund PostNL made their first investment, buying 190 hectares in the Aljustrel area through a fund focusing on sustainable farmland. Kempen Capital Management, in cooperation with Stichting Pensioenfonds PostNL, inaugurated the SDG Farmland Fund. The new investment solution enables professional investors to focus on global investments in farmland while providing a significant and concrete contribution to achieving the UN’s Sustainable Development Goals. The new investment is a clear sign of the desire on the part of international investors for acquiring rural properties in Portugal for good returns, showing an increasing interest in agriculture. Residential The month had barely begun when news of Nova Vaga’s €28 million investment in a plot of land on Avenida da Boavista in Porto was reported. The asset is located at Rua Fernando Pessoa and Rua Azevedo Coutinho, which has 3,380 square meters of land area and an above-ground construction capacity of more than 13,000 square meters. The asset is located in the CBD of Porto, very close to Torre Burgo and the Bessa Hotel. Meanwhile, Millennium BCP concluded the sale of 60,000 square metres of land in Miraflores. The sale comprised 11 plots of land in the Parque dos Cisnes development in Miraflores, municipality of Oeiras. The land will be for residential use, though the sale price and the buyer’s name were not disclosed. MVGM Portugal signed a new residential management contract for up to 300 homes. The new lease management contract for an international investor with an office in Lisbon provides for an investment in Portugal of between 25 and 30 million euros this year. MVGM Portugal stated that the investor is focusing on the Greater Lisbon residential market, focusing on the areas around the city. Nexity’s new real estate project, Turquesa, will go up in the Dafundo area, in the municipality of Oeiras, in a 26-million-euro investment. The project will combine proximity to the city centre with the tranquillity of living close to nature in what will be Nexity’s second residential project. Turquesa will have a gross construction area of 6,576 m2 and 61 flats ranging from studios to four-bedroom apartments. The Portuguese group JOM, which owns a chain of furniture and home shops, is moving ahead with the construction of two buildings in Asprela, Porto, in a 20-million-euro investment in the rental market. One hundred sixty studios are already under construction, next to the Asprela university campus in Porto. Olimpo Studios should be concluded in April 2023. April was almost over when it became known that Millennium BCP had put 111 hectares of land in Amadora up for sale. The property is set to be the site of a new urban project in the city. The 111 hectares of land located in the centre of Amadora, of which 38 hectares are urban freehold, may allow for approximately 250,000m2 of above-ground construction. The asset is located close to the centre of the city of Amadora and follows along the parish of Mina from the railway line to the neighbourhood of Moinhos da Funcheira. Offices Novo Banco will sell the building it currently occupies in Lisbon and move to Tagus Park in Oeiras. The bank led by António Ramalho maintains the plans to sell the current structure it occupies on Avenida da Liberdade but has given up on building a new headquarters in Amoreiras. As an alternative, the bank plans to move to Tagus Park, where it already has over 500 employees. The move to Tagus Park is still expected to take some time as the space that Novo Banco currently has in Oeiras will have to be enlarged. The group specialising in technical textiles, Endutex, acquired the Rialto building in Porto. The deal’s value was not disclosed, but the property will continue to be used as offices. Endutex bought the asset that was once the head office of the insurance company AXA (now Ageas) and home to one of the most iconic cafés in Porto. The building will undergo a major renovation, receive anchor shops and new tenants. The Rialto building has eight floors, a shop, an overstorey, a basement and a gross construction area of 6,688 m2. Retail and Logistics Also at the beginning of April, Firmo, an iconic company from Porto, a leader in the sale of school, stationery and office supplies, acquired Staples’ shops in Portugal. After it was reported in March that fund manager Cerberus intended to sell Staples’ business in Portugal, Firmo was announced as the buyer. The sale price is still unknown. Meanwhile, the Spanish chain Mercadona announced that it intends to open nine more stores in Portugal in 2021, in a 150-million-euro investment. The company will invest 150 million euros and recruit 500 people to continue its expansion in Portugal. Also in the north of the country, Borgwarner announced a 25-million-euro investment in a new factory in Viana do Castelo. The new factory, which will be built in the Parque Empresarial de Lanheses, will have 17,000 square metres and start production in 2023, creating 300 jobs. After the Borgwarner group selected Portugal as a base for its expansion in Europef electrification, this will be the American multinational’s third investment in the municipality. Hotels and Resorts Reify is building the UMAY Boutique Resort in Melides. Umay is a sustainable boutique resort immersed in the idyllic natural landscape of Melides on the Alentejo coast. The project is distinguished for its eco-conscious architecture, occupying a total of 20 hectares. UMAY Boutique Resort will be an international reference and, therefore, will boast an unequalled level of quality, requiring a solid, structured and integrated development process. April was just beginning when the 3HB Hotels Group announced it would open a five-star hotel in Faro. The first five-star hotel in Faro will open in June, set within a 2.500 square metre area in the centre of Faro. 3HB Faro is the result of the refurbishment of two buildings, one of which is centuries old, in an investment by the hotel group 3HB Hotels. The 3HB Faro is the fifth hotel that the 3HB Hotels group owns in the Algarve. The value of the deal was not disclosed.
Whitestar Awarded Management of €200MM Portfolio
4 May 2021 – Ana Custódio Whitestar Asset Solutions won a contract to manage a more than €200-million portfolio of debt comprising more than 3,700 loans from approximately 1,300 debtors. The assets include the Guincho portfolio, the second public securitisation of NPLs (non-performing loans) in Portugal, whose management had been divided between three servicers: Whitestar - Individual Secured, Hipoges - Corporate Secured and Altamira - Unsecured. According to João Bugalho, Managing Director - Asset Management Southern Europe at Arrow Global and CEO of Whitestar Asset Solutions S.A. "This portfolio was being managed by a competing servicer, and it is, above all, is another important sign of the market's confidence in the quality of our services." The executive added that "this news is even more relevant considering that the portfolio is part of a rated public securitisation." The contract took effect on May 1. Translation: Richard D. K. Turner
The Portuguese Real Estate Market in March
 7 April 2021 - Jose Covas - Socio Director Aura REE Portugal The last month of the fiscal year saw significant investment in various sectors of the real estate market. The end of March was marked by the Portuguese government’s decision to extend the deadline for the classification of urban/rural soils. Published in the Official Gazette, the decree provides important alterations in relevant matters for the management of projects and real estate assets, extending the deadline to the end of 2022. At the beginning of the month, the government announced that it had signed 285 contracts under its Financial Instrument for Urban Rehabilitation and Revitalisation - IFRRU 2020. The investment amount totalled over 800 million euros and is intended for the comprehensive refurbishment of buildings and improving their energy performance. The arrival of spring also brought news regarding Portugal’s non-performing loans. At the beginning of March, it became public knowledge that Davidson Kempner Capital Management won the tender to acquire the Wilkinson Project. The Wilkinson Project is a slightly more than €200-million portfolio of non-performing loans from major corporate debtors. Towards the end of the month, the national banking sector put participation units in the tourism fund Discovery Portugal Real Estate Fund, valued at more than €400 million, up for sale. BCP, Novo Banco, Caixa Geral de Depósitos and Oitante are selling their stakes in the fund, managed by Explorer and operates over 40 assets in Portugal. The fund has a net asset value of 850 million euros, and the participation units are valued at over 400 million euros. On the south bank of the Tagus, the Innovation District, a new global city in Almada, is going up in an investment of 800 million euros. The project has the attraction of combining a unique and sustainable lifestyle in a new area focused on innovation and technological knowledge. A total of 4,5000 new residents are expected to the new city, which has a total area of 399 hectares, including 110 hectares of gardens. The creation of 1,000 new housing units and an area of 250,000 m2 for the implementation of new economic activities will contribute to the creation of 17,000 new jobs and also 86,000 m2 of tourist infrastructures. Residential Avenue launched its latest venture, located in downtown Porto. Bonjardim will be the focus of the 57-million-euro investment. The venture combines housing and retail and a hotel, which The Student Hotel will operate. Avenue, which invests in luxury products, also announced it is looking for opportunities to build homes for the middle and upper-middle classes in Lisbon and Porto and is also preparing a new cycle of investments for Lisbon and Porto that will amount to 300 million euros, including projects for the middle class. The developer is in the final phase of acquiring two plots of land in Lisbon. It will develop residential buildings from scratch for the first time, for the middle and middle-high segment, and is studying another potential investment. Retail and Logistics The Lidl supermarket chain opened a new shop in Rio Tinto, Gondomar and reopened four units, in a total investment of 180 million euros. The move follows the retailer’s process of expanding and modernising its shop network all over the country by 2020. At the beginning of the month, the North American company Panattoni announced that it would enter the Portuguese market with two logistics projects in the Lisbon region. The company will acquire land to develop two logistics assets in the Lisbon region, investing 190 million euros until 2023 in 16 projects in the Iberian Peninsula. The Hi Fly Group announced that it intends to acquire land to build a logistics centre near Beja airport. Mesa will build the new logistics centre in a 10-million-euro investment. The new centre aims to support aircraft maintenance at the airport and will have a 9,000-m2 storage area for parts and consumables for aircraft and workshops, plus a further 3,000 square metres for offices. Altamira Portugal announced the sale of three assets to JOM, a Portuguese household goods chain, for over 6 million euros.   The assets include two retail parks and land for a future commercial project. Caldas Retail Park was acquired for more than €2.7 million, and Guimarães Retail Park had an investment of €3 million. The Portuguese family group also snapped up an approximately 17,000-m2 plot of land next to Arena Shopping in Torres Vedras. Hospitality The SANA Hotels group is preparing to build a five-star luxury hotel in Vila Nova de Gaia’s centre. The hotel will be built in the city centre, in an investment that will lead to about 100 jobs, though the project’s total investment was not revealed. In Gaia, Eduardo Souto de Moura is designing a new hotel in a 5-million-euro investment by ZOF - Sociedade de Investimentos Imobiliários, which announced the new hotel project. Located under the Luiz I bridge, the new boutique hotel will have 14 rooms, a terrace, viewpoint and bar with the Douro at its feet. In Portugal’s capital, Endutex will build its first Moov hotel, in a project that represents an investment of 10 million euros and is scheduled to open in 2022.  The hotel will go up in the prime area of Parque das Nações, Lisbon.  Moov Hotels looks to provide more comfort, combining quality and price with contemporary and sophisticated design and an environmentally friendly attitude. The Moov Oriente will keep the spirit that characterises the brand, offering a practical, comfortable and affordable place to stay for business and leisure travellers. Also in Lisbon, the hotel group B&B Hotels finalised the sale and subsequent guaranteed long-term lease of its B&B Hotel Lisboa Aeroporto to MNK Partners for 14 million euros. The B&B Hotel Lisboa Aeroporto was built by the Casais Group, financed by B&B Hotels, to sell and lease it simultaneously to a real estate fund through a long-term guaranteed lease.  With the sale of the B&B Hotel Lisboa Aeroporto, the group has now unloaded 100% of its real estate assets in Portugal, consolidating its asset-light business model in the Iberian Peninsula. In Penacova, a district of Coimbra, the Monastery of Lorvão will be transformed into a new hotel by Soft Time Unipessoal, Lda, in another concession under the Revive programme. Soft Time won the tender to refurbish and operate the property, which will be transformed into a luxury hotel. The firm is expected to invest around 7 million euros, and the concession contract has a duration of 50 years, with a defined annual rent of 37,320 euros. Portugal remains in the news for the best reasons, having been voted the best destination in Europe in 2021. Portugal was considered the best country in Europe to visit in 2021 by users of the European Best Destinations website. According to the site, users highlighted Braga, Porto, the beaches of Cascais and Algarve, Madeira and the Azores as unmissable places. France came in 2nd place, followed by Greece in 3rd place, Italy in 4th place and Croatia in 5th place.