Over 70% Of Flats in Duuo Reserved

28 May 2021 – Ana Custódio

In the first two weeks of the pre-launch of Duuo, the residential condominium next to Praça de Espanha, buyers reserved more than 70% of the available flats.

DUUO is a new development consisting of 280 residential units in two 140-flat apartment blocks totalling 34,000 square metres of construction, which will be developed in two phases, in an investment of 110 million euros.

BESIX Real Estate Development mandated Castelhana Real Estate in partnership with Compagnie du Bois Sauvage to market the apartment complex.

The project was designed with the best use of space in mind, offering spacious and bright flats with large balconies that extend the living area.

The top-floor penthouses will have a private pool on the roof overlooking the Monsanto Forest Park. DUUO will have an outdoor swimming pool surrounded by a garden for common use, adding a human and social dimension to the development.

The new condominium is already a benchmark in the Portuguese real estate market. The public’s reception has been highly positive, with more than 70% of the units reserved in the first two weeks of pre-launch.

The success is also due to the excellent payment conditions that allow 80% of the payment to be made at the deed when the financial institutions grant the mortgages.  At this moment, Portuguese nationals represent more than 90% of the buyers.

Construction is expected to start in September and will last for an estimated 24 months. Work on the second phase is scheduled to begin in the second half of 2022, with work on the DUUO development forecast for completion in 2024.

DUUO is the first investment of Besix Red in partnership with Compagnie du Bois Sauvage in Portugal and is already a commercial success.

Translation: Richard D. K. Turner

Public Works Tenders Down 29% in Year to April

27 May 2021 – Ana Custódio

In the year to April, new public tenders fell while contracts signed in the period rose compared to the same period in 2020.

The figures stem from AICCOPN’s (Association of Civil Construction and Public Works Industries) Public Works Barometer. On the one hand, new public works tenders fell by 29% in the first four months of 2021, while the number of contracts signed for public works contracts rose by 46% y-o-y.

According to AICCOPN, in the first four months of the year, Portugal launched a total of 1.381 billion euros of public works tenders, a reduction of 29% compared to the same period of the previous year though up from the drop of 42% during the last month.

According to the barometer, the falls were due to a base effect resulting from an exceptionally high volume of public tenders in March 2020.

Public procurement contracts signed up to the end of April and reported in the Base Portal totalled 975 million euros, increasing 57% y-o-y.

Public works contracts awarded as a result of Direct Adjustments and Prior Consultations reached 156 million euros in the first four months of 2021, equivalent to a rise of 8% y-o-y.

The value of contracts signed in the first four months of the year, as a whole, reached 1.206 billion euros, 46% more than the previous year.

Translation: Richard D. K. Turner

Average Bank Valuations of Homes Reaches €1,200 in April, Up 13 Euros Over March

27 May 2021 – Ana Custódio

The average value of bank valuations of homes in Portugal stood at 1,200 euros in April, 13 euros more than in March.

According to data released today by the National Institute of Statistics (INE), housing prices, as determined within the process of banks evaluating mortgage applications, rose by 8.0% (6.9% in March). The number of bank valuations also increased to around 28,000, 29.6% more than in the same period of the previous year.

In April, the average value of a flat in Portugal stood at 1.314 euros/m2, increasing 8.6% y-o-y. The highest prices were in the Lisbon Metropolitan Area (1,582 euros/m2), while the lowest were in the Alentejo (853 euros/m2).

The North has the highest year-on-year growth (9.1%), and the Alentejo the only decrease (-0.6%). The assessment value increased 1.1%, in comparison to the previous month, with the Autonomous Region of the Azores showing the greatest increase (3.3%) and the Alentejo the only decrease (-2.0%).

The median assessment for two-bedroom flats rose by 20 euros to 1,336 euros/m2, with three-bedroom apartments rising 8 euros to 1,178 euros/m2. Those sized flats accounted for 81.4% of the valuations of flats carried out in April.

The median valuation for houses reached 1,000 euros/m2 in April, increasing by 6.5% y-o-y. The highest values were seen in the Algarve (1,621 euros/m2) and the Lisbon Metropolitan Area (1,581 euros/m2), while the lowest was in the Centre (820 euros/m2).

According to the INE, the Alentejo showed the highest year-on-year growth (12.6%), and the lowest occurred in the Algarve (1.2%). Compared with the previous month, the Lisbon Metropolitan Area showed the largest increase (1.9%), and the largest decrease occurred in the Algarve (-1.4%). Compared to March, the values of two, three, and four-bedroom houses, which accounted for 89.1% of the valuations, reached 949 euros/m2 (down €16), 978 euros/m2 (up €10) and 1,064 EUR/m2 (up €19).

By region, the Lisbon Metropolitan Area, the Algarve and the Autonomous Region of Madeira presented appraisal values higher than the average for Portugal median (32%, 30% and 2% respectively) in April 2021. Beiras and Serra da Estrela had the lowest valuations in relation to the country’s average (-44%).

In order to calculate the median value of bank valuations for April, 28,132 bank valuations were tabulated, 29.6% more than in the same period of the previous year. Of these, 17,719 were flats and 10,413 were houses. Compared to March, there were 2,183 more bank appraisals, an increase of 8.4%, says INE.

Translation: Richard D. K. Turner

Commercial Property Prices Grew 1.7%

27 May 2021 – Ana Custódio

Commercial property prices increased in 2020 for the second consecutive year.

According to Portugal’s National Statistics Institute (INE), its Commercial Property Price Index (IPPCom) increased by 1.7%, 0.2 percentage points less than in 2019.

The index has posted price increases every year since 2014, though 2020 saw the least expressive growth.

The increase in commercial property prices in 2020 was lower than residential properties (8.4%), as seen in previous years, the National Statistics Institute announced.

According to the report, the IPPCom posted an annual increase of 1.7% in 2020. For the second consecutive year, there was a reduction in the rate of growth of commercial property prices. Prices rose by 4.9%, 1.9% and 1.7%, respectively, in 2018, 2019 and 2020.

The housing market saw higher growth than that of the commercial property market, according to the INE’s Housing Price Index (IPHab). Residential housing prices have increased at a faster rate since 2016.

Last year, IPHab rose by 8.4%, 6.7 percentage points above that of the IPPCom. The INE concluded that compared to 2019, there was a 1.0 percentage point reduction in the difference between the growth rates of the two indicators.

The main objective of the Commercial Property Price Index (IPPCom) is to measure changes in commercial property prices in Portugal.

Translation: Richard D. K. Turner

Trofa Saúde Invests €8-Million to Build Hospital in Vida Ovar

26 May 2021 – Ana Custódio

Trofa Saúde will invest eight million euros to build a hospital in a former Dolce Vita. Vida Ovar will host the Portuguese healthcare group’s 18th hospital.

The shopping centre announced today the construction of a private hospital in the space, in a total investment of eight million euros by Grupo Trofa Saúde, according to the Portuguese newspaper Jornal de Negócios.

Trofa Saúde Ovar will have a total area of 3,000 square metres, an outpatient centre with over 30 medical, surgical and complementary specialities, enough for around 300,000 people from the municipalities of Ovar, Santa Maria da Feira and Estarreja. Construction is expected to start in the coming weeks and may be completed by May 2022.

Joining Trofa Saúde São João da Madeira, and the seventh unit in the district of Porto, which already has units in Trofa, Matosinhos, Maia, Alfena, Vila Nova de Gaia and Vila do Conde, Trofa Saúde Ovar will be the group’s second hospital unit in the district of Aveiro.

Vida Ovar has 67 shops and restaurants distributed over two floors, with a gross area of over 20 thousand square metres, and a free car park with 238 covered parking spaces and 1,080 in the open air.

Translation: Richard D. K. Turner

Euribor Rates Rise at Three Months and Fall at Six and 12 Months

26 May 2021 – Ana Custódio

The three-month Euribor rose today, while the 6- and 12-month rates fell from the day before.

The six-month Euribor rate, most used in Portugal for mortgages, fell today to -0.507%, down 0.002 points, versus the current minimum, -0.534%, which occurred on January 28, reports the newspaper Notícias ao Minuto.

The 12-month rate also fell to -0.480%, down 0.004 points, against the current minimum of -0.515% of February 2.

On the other hand, the three-month Euribor rose to -0.537%, up 0.001 points, versus a low of -0.556% on January 6.

The three, six, and 12-month Euribor rates entered negative territory in 2015, on April 21, November 6, and February 5, respectively.

Changes in Euribor interest rates are closely linked to increases or decreases in the key interest rates of the European Central Bank’s benchmark interest rates.

Euribor is the average of the rates at which a group of 57 banks in the Eurozone are willing to lend money to each other on the interbank market.

Translation: Richard D. K. Turner

Mercan Group Invests €21 Million in New Hilton Garden Inn Évora

26 May 2021 – Ana Custódio

The Mercan Group is building a new hotel near the heart of Évora.

A new hotel is going up in Évora, the Hilton Garden Inn Évora, in a project by Mercan Group in partnership with the RA Group (Reference RA  Group). Located less than 10 minutes from the city’s historic centre and next to Rossio de São Brás, the two firms intend to invest 21 million euros in the project.

The Hilton is the second project Mercan Group and RA Group have announced this year. The start of construction of the Garden Inn Hotel comes one week after laying the first stone of the Renaissance Park Hotel – Porto, an investment of 56 million euros.

Currently, the Mercan Group has twelve projects in Portugal in locations such as Porto, Gaia, Matosinhos, Amarante and Évora.

The new hotel has more than eight thousand square metres, 130 rooms and an outdoor rooftop pool with a bar and terrace. The hotel will also have a restaurant, gym and a meeting room with the capacity for up to 130 people.

“Évora has enormous potential as a tourist destination, both for the Portuguese and foreigners. This new Mercan Group project is a reflection of the confidence that international investors have in Portugal, and that goes beyond the focus on large metropolises. We have 75 foreign investors in this project alone,” says Jordi Vilanova, vice-president of the Mercan Group, who highlights this project as another of the group’s sure bets on the country.

Close to the city centre and Évora’s main historical points, the hotel stands out for its vibrant, modern and sophisticated atmosphere. The exterior space combines with the ingenious details of the architecture and the cosy decoration inside, creating a unique experience for guests. The project was designed by Rui Silva Russo, Atelier de Arquitetura, and the interiors will be developed by Nano Design studio. The project management will be the responsibility of Engexpor.

The first stone was laid yesterday with the presence of the Évora municipal councillor for Urbanism, Eduardo Luciano, symbolically starting work on the hotel. Construction work. Under the responsibility of Tecniarte, the hotel is expected to be completed in 2022.

The Mercan Group began operating in Portugal in 2015, focusing on the development of tourism-related real estate projects, in partnership with Referência Arrojada. The group chose Portugal for the development of its activities in Europe due to the safety, stability and hospitality that the country offers, as well as the development opportunities in the area of urban rehabilitation.

Mercan is a Canadian-based group with over 30 years of experience in the areas of investment consulting, education and immigration for investment. In addition to Portugal, it is present in China, India, the United Arab Emirates and the United States of America.

Translation: Richard D. K. Turner

Eastbanc Invests 11 Million Euros in Office Building in the Capital

26 May 2021 – Ana Custódio

A new office and retail project, the Alegria One, is going up at Praça da Alegria in Lisbon.

The total rehabilitation of an iconic building on the corner of Avenida da Liberdade and Praça da Alegria will have seven floors and a total construction area of 2,800 m2, including offices, a restaurant and a shop on the ground floor. The shop will have an entrance from Avenida da Liberdade and has a unique six-meter high ceiling.

Designed by Eduardo Souto de Moura, the new office space in one of Lisbon’s main arteries will be adapted to recent market trends.  The rehabilitation project will be concluded in the third quarter of this year, in a total investment of 11 million euros.

EastBanc, a real estate development and management company specialised in the acquisition, refurbishment and management of real estate assets, has just started sales of its new project Alegria One. Marketing will be in the hands of JLL and Cushman & Wakefield.

The asset, which was built at the end of the 19th-century, later served as the residence of the Keil family until the mid-20th century. Later, in the 1970s, it became an obligatory destination for electronics lovers as one of the first companies that sold electronic components in the country, DIMOFEL, operated here.

The rehabilitation project will maintain the three façades of the old building and all the architectural elements that characterise it. The space will be transformed into a top office building with wide spaces, no pillars, a single shop facing Avenida da Liberdade and a restaurant with a wide outdoor area, right in the centre of the Praça da Alegria.

The building, which has a total construction area of 2,800 m2, will have seven floors with a total of 2,200 m2 of commercial area, divided between 1,300 m2 of offices, a restaurant area with an outdoor patio and a shop with more than 400 m2 on the ground floor with 6 m high, besides the storage rooms in the basement.

The offices may be used by a single company or separated into floors, depending on market needs.

Translation: Richard D. K. Turner

Investment Raised Through Golden Visa Programme Up to €122.2 Million in 1Q21

24 May 2021 – Ana Custódio

Investments raised through the Golden Visa Programme rose by 2.1% in the first quarter of 2021.

Investment raised through the golden visa programme totalled 122.2 million euros in the first quarter of 2021, up 2.1% y-o-y, according to a report by Diário de Notícias based on data from Lusa and the SEF – Foreigners and Borders Service.

Investment resulting from the Residence Permit for Investment (ARI) programme totalled 119.6 million euros in the first quarter of last year.

In March this year, investments totalled €36,758,269.30, up 31.5% y-o-y, but down by 29.8% m-o-m (€52.3 million).

According to SEF, the Portuguese government awarded 73 golden visas last month. Of those, 64 were due to purchases of real estate (25 for urban rehabilitation) and nine through capital transfers.

Real estate purchases totalled 31.3 million euros (€8.7 million for urban rehabilitation). In turn, capital transfers accounted for 5.4 million euros. Once again, no visas were granted due to job creation.

Twenty-seven visas were issued to Chinese nationals, six to Brazilians, five to North Americans, five to Turkish nationals and four to Pakistanis.

In the first three months of the year, 228 golden visas were granted, of which 55 were in January and 100 in February.

The programme for granting Residence Permits for Investment – ARI, launched in October 2012, has raised a total of €5,761,184,542.33 since its inception.

Most of the total corresponds to the real estate purchases, which after more than eight years of the programme amounts to €5,208,795,293.69, with the purchase for urban rehabilitation totalling €297,622,790.99. Investments resulting from the capital transfer amounts to 552,389,248.64 euros.

Translation: Richard D. K. Turner

Project Vilamoura Sold to Arrow for Approx. €100 Million

24 May 2021 – Ana Custódio

The US-based private equity firm Lone Star has sold Project Vilamoura to a group of investors.

According to a report in ECO, the buyers include the British fund Arrow Capital and the entrepreneurs Filipe de Botton and Alexandre Relvas. Lone Star finalised the sale of the Project Vilamoura, which includes part of Vilamoura.

The Vilamoura marina, two companies and 21 plots of land with construction potential are included in the deal. The transaction was finalised for approximately 100 million euros, well below the initial asking price. At the time, the project also included Cidade Lacustre, a project in expansion, which ended up being rejected at the end of last year.

In 2015, the owner of Novo Banco bought these assets and, two years later, at the end of 2017, put them on the market for sale. It took three more years to manage to sell, and the deal that was closed last week is likely to have been around 100 million euros, a figure below the 180 million that Lone Star was initially asking for.

According to the Portuguese newspaper ECO, the buyer is the British fund Arrow Capital, which owns the Portuguese companies Whitestar and Norfin (which manage and recover bad debt and real estate assets), and a number of private investors, including Filipe de Botton and Alexandre Relvas, partners of Logoplaste, and João Brion Sanches, founder of Norfin along with the two previous entrepreneurs.

The project comprises 100% of the share capital of Vilamoura World (the company that manages all these assets), 21 plots of land for development, 49% of Inframoura (the municipal company that manages Vilamoura’s public works) and the Vilamoura marina, which is the most interesting asset.

Translation: Richard D. K. Turner