Month: June 2017

THE FRENCHMAN CLAUDE BERDA INVESTS €300M IN PORTUGAL

The French magnate Claude Berda plans to invest a total of 300 million euros in the development of various real estate projects in Portugal, according to the Expresso newspaper.

Claude Berda is one of the major real estate investors from Switzerland, where he has lived for more than 10 years, and one of the richest men in France. He is to invest in 4 projects in the centre of Lisbon, one in Comporta and one in the Algarve.

In Portugal, he is represented by José Cardoso Botelho, and created the company Vanguard Properties, which, “is moving forward in the 鴅rst stage in luxury housing, the most sought after by foreigners,” explains the same source. In the medium term, student accommodation and coworking centres may also appear in the plans.

José Botelho, Executive Director of Vanguard Properties, explains, quoted by the newspaper, that, “The 鴅rst acquisition carried out was in December 2015, comprising land in Graça, with a full view of Lisbon, which belonged to EPUL and where a building will be built from the ground up. But a good part of the properties already in our portfolio in Lisbon are buildings for renovation then to be put on the market in a higher segment.”

Worth noting is that the majority of the properties were purchased from Estamo, of the Parpública group, and from Banif, such as a building in the Rua Castilho which housed the administrative services of the Ministry of Agriculture, bought for 12.5 million euros. The project for this property includes a penthouse on the top Ûoor, which will cost 6 million euros.

Also of note is a building in Amoreiras, next to the Hotel Dom Pedro, for 12 million euros, a small palace in the Rua do Quelhas, in Lapa, and a tourist establishment in Porches, in the Algarve.

After June, work should begin on the projects in Amoreiras and in the Rua Castilho, with the Úrst three projects due for completion in 2018.

Original Story: Iberian Property – Ana Tavares

PORTUGAL IS THE FAVORITE DESTINATION OF THE $2 BILLION NEW KILDARE FUND

Portugal is the favorite destination of the private equity fund created by Ellis Short in 2013, who raised $2bn to invest in the European distressed property debt market.

The information was provided by the businessman, in an interview with the Financial Times, confirming that Kildare joins the likes of Lone Star, Blackstone and Oaktree Capital, which have also raised capital to invest in European property in the last few years.

According to the newspaper, this represents the largest fund of its kind opened in Europe this year, due to the capital amount raised and the record pace of conclusion, three months faster than the director’s previous Kildare European Partners, which closed in 2014. The new fund, which was joined by all of the previous investors in the fund, has also added 10 new investors, including the Texas Permanent School Fund and the New Mexico Educational Retirement Board.

The fund will exclusively target European markets, focusing mainly on the UK, Germany, the Netherlands, Italy and Portugal — the latter being of particular interest to the company, Mr. Short said.  Mainly focusing on the two South European countries, the director acknowledged that besides being a small market – more obviously in the case of Portugal – “it’s also tough to buy in those markets because of weaker creditors’ rights. That’s why we are focused on real estate deals rather than on debt.”

The capital is expected to be deployed within two to three years, said Mr. Short, whose international reputation in real estate investment grew after being vice-chairman at Lone Star, where he worked from 1994 to 2007. His visibility in Europe increased when he became the owner of Sunderland football club.

According to the Kildare Partners website, Ana Tavares, who has previously worked for JP Morgan, Deutsche Bank and Merril Lynch, will be the responsible for investment in Portugal.

Original Story: Iberian Property – Susana Correia

Editing: Richard Turner

Lisbon City Council rebuffs Assembly and will approve controversial hotel in Chiado

21 February 2017

The project envisions a “contemporary reinterpretation” of a 1970s building in the Pombaline style, also decorated with tiles by António Vasconcelos Lapa.

Last March, deputies of the Municipal Assembly voted nearly unanimously on a document recommending that the city council not authorize the transformation of a 1970s building, located in Chiado, into a hotel with Pombaline aesthetics, as proposed by a real estate investment firm. This recommendation came about after a public petition against the development collected 1,235 signatures in just a few days. The PCP [Portuguese Communist Party] and the BE [Left Block] had already presented similar initiatives in February, which were also approved by large majorities.

The city council, however, has rebuffed these petitions and it is expected that the project will be approved in a closed meeting this Thursday, July 22.

As PÚBLICO reported in February, the developer intends to transform the building number 20 in the Largo Rafael Bordalo Pinheiro and another one, located right next door, into a five-star hotel. To this end, it is proposing that the current modernist aesthetic of the building – built between 1974 and 1977 for the insurance company Império – be replaced by “an architectural design that blends in with the surrounding buildings” and reflects a “contemporary reinterpretation” of Pombaline architecture.

In addition to the major changes to the exterior of the building, the proposal would also remove 33 panels of tiles that the ceramist António Vasconcelos Lapa designed for the facade. Faced with the doubts raised by the Resident Consultative Structure of the Municipal Master Plan regarding the removal of the tiles, the city council asked – and the developer accepted – that the panels be relocated to an areas within the future hotel.

But the deputies of the municipal assembly recommendations went further. “The city is not just ‘neo-Pombaline’, and we do not want to transform Lisbon into a Pombaline Disney. We want the cities urban environment to reflect architectural interventions made throughout its long history, without forgetting interventions made in more recent times, “wrote Simonetta Luz Afonso, a PS [Socialist Party] representative, who prepared a report on the petition. This document was unanimously approved by the deputies on the Town Planning and Culture committees of the Lisbon Municipal Assembly.

In the report, the Socialist Party member deemed that the current building is “very well integrated” with the surrounding area and, therefore, “there is no need to dress it up in any postmodern pseudo-historical clothing.” She added: “It is our duty to preserve this historical structure, making sure that the building will keep its original design, maintaining the decorative tiles that integrate the rhythmic and chromatic composition of its facade so well. Surely it’s possible to make functional adaptations to the hotel, without altering its architectural and decorative features. ”

Original Story: Público – João Pedro Pincha

Photo: Nuno Ferreira Santos

Translation: Richard Turner

Lisbon City Council seeks to raise almost 14 million euros with sale of real estate assets

20 June 2017 – MadreMedia / Lusa

The Lisbon City Council is seeking to raise 13,844,900 euros through a public auction of five building units, five parcels of land, and two smaller plots of land.

According to information disclosed on the municipalities website, five building units located in the parishes of Santa Maria Maior (Residência Martim Moniz and Rua Áurea), Lumiar (Rua Bento Jesus Caraça) and Misericórdia (Rua do Vale) will be sold at public auction, to be held at 10 am on July 14th in the Campo Grande municipal building.

The base prices run from 90,000 to 434,300 euros.

The five parcels of land are located in Belém (Rua Horta e Silva, Rua Dom Jerónimo Osório and Rua Gregório Lopes), in the Parque das Nações (Rua Conselheiro Lopo Vaz) and in Santa Maria Maior (Rua Áurea).

Here the base prices vary from 630,400 to 5.94 million euros.

Also included in the public auction are two smaller lots of land located in the Quinta dos Alcoutins, in the Lumiar parish, which have a base price of 370,000 and 400,000 euros.

The municipality states that applications must be sent by registered mail delivered by the candidates or their representatives by 1 pm on July 13.

Original Story: Sapo24

Translation: Richard Turner

The New Urban Lease Regulation goes into effect today. Find out what’s going to change.

15 June 2017

The transitional period for updating rental contracts drawn up before 1990 will continue until 2020. After the eight-year transitional period, “in the absence of agreement by the parties on the type or duration of the contract, the contract shall be deemed to have a period of five years.”

Starting today, it is possible to extend the transitional period to renegotiate rents to eight years, three more than the initial five years granted, according to a decree published on Wednesday in the Diário da República.

Thus, the transitional period for updating pre-1990 rental contracts will continue until the year 2020, and will apply to all renters with a Fixed Gross Annual Income (RABC) of less than five Annual National Minimum Salaries (NRM), corresponding to 38,990 euros, regardless of age, writes Lusa.

The NRAU came into effect in November 2012. These regulations stated that rents prior to 1990 had to be renegotiated: This allowed old rental contracts to increase in price through a process of negotiations between landlords and tenants. This means that now landlord’s can only change rental contracts after a period of eight years.

After the eight-year transitional period, “in the absence of agreement by the parties on the type or duration of the contract, the contract shall be deemed to have a period of five years,” stated the agency.

You can consult the NRAU Legislation here.

In addition to the amendments to the New Urban Lease Regulation (NRAU), changes to the Legal Framework of Leased Property Works (RJOPA) and changes to the Civil Code related to leasing will take effect today.

Original Story: O Jornal Econômico

Translation: Richard Turner

DEMAND FOR OFFICE SPACE IN PORTO REACHES RECORD NUMBERS

01-06-2017

The city of Porto has witnessed growing demand for office space, both from international companies that are settling in Portugal, as well as from national companies that are relocating or resizing, looking for spaces better suited to their needs.

After trends seen last year in office occupancy rates, the first months of 2017 have surpassed even the highest expectations, showing exponential growth in the amount of businesses setting up in the city.

The newcomer Webhelp inaugurated its facilities in the Hipercentro business park in Porto on May 31. The French multinational already employs about two hundred people in the Porto office and estimates that it will increase the number of employees to 350 by the end of the year.

Recognized as a world leader in the outsourcing of business processes, Webhelp recognizes Porto as “a very favorable ecosystem” for its business activities and as having “well above-average infrastructure“, said Benoist Voldie, director of the local branch.

Vestas has the same opinion.  The world leader in the wind sector, which in May announced an investment of between 5 and 10 million euros by 2020 in the creation of an engineering center in Porto.

Webhelp and Vestas are joined by other business giants such as Hostelworld, which announced in April that Porto was its city of choice for its sixth office worldwide, and its first in Portugal.

After the Euronext group, which chose Avenida da Boavista as the location for its complementary technological center, came the Natixis, the French firm that occupied the Oporto Center building in Bonfim, the easternmost part of the city of Porto. This year Critical Software moved to Baixa, next to the Trindade metro station in the center of Porto, very close to the startup Pixelmatters. And the list continues with, for example, Founder Founders, Talkdesk, and Bottebooks. overall, these investments alone represent thousands of new qualified jobs in the medium term and many millions of euros in urban rehabilitation.

On the other hand, the search for office space in Porto, whether by large technological centers or by business incubators, is beginning to face growing scarcity. This difficulty that has been overcome through the support of Invest Porto, which has aided companies looking for set up shop in Porto from the very beginning.

Original Story: Vida Imobiliária (Fernanda Cerqueira)

Translation: Richard Turner

BUILDING INVESTMENT REGISTERS THE HIGHEST INCREASE SINCE 2002

1 June 2017

Building investment registered an increase of 8.5% over the same period last year, the highest positive variation in the last 15 years.

The numbers were provided by the Portuguese Confederation of Construction and Real Estate – CPCI, which, according to INE’s quarterly national accounts, shows the impact of building investment on the 2.8% GDP growth. In a statement, the Confederation noted that construction “represents 50.5% of total investment in the economy.”

The highlight was the increase of 8.5% in the first quarter of 2017 compared to the same period in 2016 and a growth of 5% compared to the previous quarter. Encouraging figures accompanied by news of the creation of 23,045 net new jobs in the first quarter of this year alone.

The CPCI considers that these figures reflect not only the stabilization of the economy, but also trends in the Portuguese real estate market and the increasing impact of private investment.

For Reis Campos, President of the CPCI, “we have to take advantage of this moment to fortify Portuguese business and employment growth.” The president of CPCI also stresses the need to “streamline strategic areas” such as urban rehabilitation, foreign investment in national real estate and business investment. Reis Campos also emphasizes the importance of strengthening public investment that currently “remains at historically low levels.”

For Campos, the creation and implementation of financing mechanisms, namely the Programa ‘Casa Eficiente’ [Efficient House Program], the correct implementation of Portugal 2020 and other European funds such as the Juncker Plan and the Connecting Europe Facility are “decisive steps“. Ensuring the effectiveness of the Golden Visas Program and the Non-Resident Taxation Scheme is also important.

Original Story: Vida Imobiliária – Fernanda Cerqueira

Translation: Richard Turner

Change in law sets landlords against tenants

17 June 2017

The amendments to legislation covering rental agreements, which became applicable yesterday, have again put landlords and tenants on a ‘war footing’.

Amendments to the New Urban Rental System (NRAU) became applicable this week, allowing an eight-year extension of the transitional period for updating old rents, according to a decree published in the Diário da República. The measure has provoked controversy in the real estate market. Landlords object and tenants applaud. António Machado, Secretary General of the Association of Tenants in Lisbon (AIL), reveals that this change has had little effect on the rental market. “At the moment, counting both residential and commercial contracts, there are about 150,000 rental agreements there were drawn up before 1990, and the effect on the market will be minimal. This is a measure to ensure that we avoid a number of evictions that would have occurred if the period had not been extended. “In 2011, there were around 255,000 lease agreements concluded before 1990, a number that has halved in just five years. This means that they will continue to decline in the coming years. The problem is postponed until later, and perhaps five years from now there will only be about 50,000 contracts. This controversy around the subject is pure demagoguery and has no relevance,” explains the person in charge.

António Machado also pointed out that this measure can have a double effect, since it will also help avoid rental subsidies. The Government will thus spend less on rental supports.

On the other hand, Menezes Leitão, president of the Lisbon Landlord Association (ALP), declares that the group has already filed suits in Portuguese courts based on the rent freeze, and hope to bring the matter to the European Court of Human Rights, considering that these measures are a veritable expropriation, and cannot therefore be executed without fair compensation. The official says that a prolongation of a contractual term for eight years is an attack on landlords, unworthy of the democratic rule of law, and it is truly shocking that the Portuguese government have done something this arbitrary. Menezes Leitão also believes that this measure will have a major impact on the real estate market, further reducing rental offerings. “Effectively, the rental market is undergoing a crisis of confidence due to decades of price freezes, although there has been some easing with the 2012 law, which definitively ended the freeze and helped boost confidence. Now that the reform has suffered a major reversal, there will be quite a few owners who will end up losing confidence in this market, which has always been subject to successive state interventions,” he stated.

Lack of confidence in the market

Reis Campos, president of the Portuguese Confederation of Construction and Real Estate – CPCI, agrees. “This measure may jeopardize investor confidence, which, right now, is essential to preserve.” At a time when the real estate market is on an upswing, and the interest of domestic and foreign investors continues to be the so important, especially in strategic areas such as Urban Rehabilitation, Reis Campos fears that any legislative change could send the wrong signal to the market. “Regardless of the specific objectives that they expect to achieve – which I do not question – amendments to the law cannot be a pretext for discussions between landlords and tenants, which would only serve to postpone and halt investment decisions,” he warns.

The president of the CPCI believes it goes beyond the thinking about the effects of this Law, the problem is that Portugal continues to legislate in a haphazard manner, without facing eal problems. In its view, Portugal can no longer ignore the need for a medium- and long-term integrated policy for housing and the entire housing market. “We must not forget that, in Portugal, social housing has been practically absent from political discourse for many years. And in fact, an extremely serious social problem persists. In Portugal, social housing is available for one in every 16 people at risk of poverty and 11% of the dwellings used as residential housing are overcrowded. That means that 468,000 families live in these conditions,” he explains.

Reis Campos also points out that the rental market is far from being considered consolidated. In the last decade, when there has been a sharp reduction in new construction and, at the same time, a near collapse of real estate credit, inexplicably the level of rents is declining. “In Portugal, the participation of this market fell from 20.8% in 2001 to 19.4% in 2011,” he said.

Mariana Vilaça Fernandes, Associate attorney for TELLES, clarifies that the new measure creates a new eight-year waiting period, in addition to the deadline established by the 2012 law. Landlords will now be forced to put on a hold on or even change any plans to restore or monetize assets, when after the reform of 2012, they had come to expect the prospect of ending most of the contracts that have been in force over several decades.

“This new law will certainly have consequences for many real estate projects and operations that have since been completed with the confidence that these old leases would end in the short term, and those expectations will now have to be readjusted.  There will be a rupture in the dynamic that the 2012 law created in the rental market which, in recent years, has allowed growth in the market.  This rupture will have inevitable consequences in the urban rehabilitation sector,” the lawyer admits.

Original Story: O Jornal Econômico – Fernanda Pedro

Translation: Richard Turner

€170M INVESTMENT CONVERTS WHARF INTO A SCIENCE AND TOURISM COMPLEX

8 June 2017 – Vida Imobiliária

The urban renewal development, with a marina and hotels, and a maritime research center, is the basis of the Municipality of Faro’s proposal for the redevelopment of ​​the commercial wharf.

The Farformosa project represents an investment of around 170 million euros, where works will extend over 18 hectares, with the prospect of creating 1500 direct jobs.

A new Research Center with capacity for 300 researchers is planned, which will also have Congress Center that will can host up to 1200 people in the main auditorium.

A marine biology business incubator and a development center of the University of Algarve will also be created.

In parallel, residential, hotel and commercial offerings will also be widely developed. The creation of three new hotel units, an area for assisted senior residences and several areas of commerce, services and catering are expected.

The project also includes the construction of a marina with 400 berths. In the immediate vicinity, there will be a sailing school and a shipyard for naval repairs.

Original Story: Vida Imobiliária / Fernanda Cerqueira

Translation: Richard Turner

Portugal Finished 2016 with 81 New Developments

6 June 2017

Portugal ended 2016 with 1,945 tourism developments, 81 more than in the previous year, according to the 12th edition of the Deloitte Portuguese Hospitality Atlas, which also forecasts the inauguration of 38 new hotel units in 2017.

According to the report, cited by Lusa, the number of overnight stays surpassed 53 million, while revenues exceeded 2 billion euros, with an occupancy rate of over 63%.

The regions of Madeira (77.5%) and Lisbon (72.5%) registered the highest occupancy rates in 2016, with the capital also having the highest average price per room in the country (80.65 euros).

In areas with longer average stays, the ‘winners’ were Madeira (5.39 days) and Algarve (4.49 days).

All regions saw their revenue per available room (RevPAR) grow and Lisbon once again stood out with a revenue of 59.18 euros, an increase of 5.58 euros over the previous year.

The distribution of developments regionally is as follows: the Algarve and the North lead (22% each), followed by Central Region (21%), Lisbon (15%), Alentejo (8%), Madeira (7%) and Azores 5%).

The southernmost region also appears at the top of the rankings in relation to the number of accommodation units, representing 32% of the total, with Lisbon appearing in second place, with 21%.

The seasonality index shows that July, August and September are the months with the highest number of overnight stays.

Internationally, the Lisbon occupancy rate has surpassed such major European cities as Rome, Madrid and Paris, although it remains below London, Amsterdam and Barcelona, but RevPar numbers (revenues per available room) are below the European average.

Hotels continue to be the most common type of tourist development, accounting for 73% of the total. They are followed by tourist apartments (10%), apartment hotels (7%), rural hotels (5%), tourist villages (3%) and inns (2%).

In terms of hotel rankings, three (33%) and four (38%) star hotels predominate at the national level. Two-star ventures ranked third with 17% and five-star ventures ranked fourth with 8%.

The Pestana Hotels & Resorts / Pousadas de Portugal (5.2% of the total), the Vila Galé Hotels (3%) and Accor Hotels (2.4%) are the top 3 in the national ranking of the 20 hotel groups with the largest number of accommodation units.

“The year 2016 was unique and historic for revenue and overnights, but also stood out for the growth in the number of developments,” said Miguel Eiras Antunes, leader of Tourism, Hospitality & Services at Deloitte, in a statement.

The consultancy said that 38 new hotels, mainly 4- and 5-star, are expected this year, with the greatest number in Lisbon (18). Eight openings are planned in the North, seven in the Center, four in the Algarve and one in the Azores.

According to Jorge Marrão, head of Real Estate at Deloitte, “international investors are increasingly interested in Portugal, a result of the increase in the rates of return on real estate assets.

“Tourism will therefore remain a strategic part of our economy,” he concluded.

Original Story – Publituris

Translation: Richard Turner