Month: September 2021

Public Works Tenders Down 15% by End of August

According to an analysis by AICCOPN (Associação dos Industriais da Construção Civil e Obras Públicas), Portugal’s public works market maintained its existing trajectory, with new tenders falling and signed contracts increasing, year-on-year.

September 29, 2021 – Ana Custódio

According to an analysis by AICCOPN (Associação dos Industriais da Construção Civil e Obras Públicas), Portugal’s public works market maintained its existing trajectory, with new tenders falling and signed contracts increasing, year-on-year.

In the year to the end of August, new public works tenders totalled €2.916 billion, down 15% y-o-y, maintaining a six-month streak of consecutive year-on-year declines.

Contracts signed and reported in the Base Portal under public tenders totalled 1.93 billion euros, up 41% compared to the same period in 2020.

According to AICCOPN, public works contracts concluded as a result of Direct Adjustments and Prior Consultations reached 400 million euros, up 19% year-on-year

As a whole, the total number of public works contracts signed in the year to August’s end stood at 2.617 billion euros (+33%).

Translation: Richard D K Turner

Maya Capital Debuts in Portugal with €65 Million Investment in Residential Assets

September 27, 2021 – Ana Custódio

The real estate investment fund announced the acquisition of its first portfolio in the country.

Maya Capital has landed in Portugal after a €65-million investment in residential assets, according to an article on the website Idealista. This was the fund’s Iberian platform’s first deal. The deal involved seven buildings in prime areas of Lisbon, which the company intends to rehabilitate.

The company announced the acquisition of its first portfolio in the country, in an investment that includes the initial outlay and redevelopment costs. This is considered to be the company’s largest acquisition. Based in Lisbon and headed by António Pinto de Abreu, this is Maya Capital’s Iberian platform’s first deal, which has as its main objective the redevelopment of the assets it has acquired. At the same time, it is looking for further acquisitions.

The mainly residential portfolio has assets in four districts of the capital, including Misericórdia, Santo António, Santa Maria Maior and Avenidas Novas. According to a statement by Maya, its objective “is the rehabilitation of the buildings, with the project management being the responsibility of the company.”

Translation: Richard D K Turner

Rents Up by 11.5% in Second Quarter 2021

Rental costs for a newly leased home rose by 11.5% in the second quarter of the year.

September 29, 2021 – Ana Custódio

Rental costs for a newly leased home rose by 11.5% in the second quarter of the year. There were 20,568 new rental contracts in Portugal with an average price of €6.03/m2. The increase was higher than in the previous quarter (+5.3%).  The number of new contracts also soared compared to the second quarter of 2020 (+49.3%), when the country was in the depths of the pandemic.

The data, published by the National Institute of Statistics, also showed that the increase in the number of new leases compared to the first quarter, a period also marked by restrictions on mobility as a result of the pandemic, reached +3.0% (-9.3% in the previous quarter).

Rents rose in 20 of the 25 sub-regions in Portugal. The sub-region of Oeste (+12.3%), Aveiro (+11.9%), Madeira (+11.3%) and Metropolitan Porto (+10.2%) reported the highest rises. The regions with the steepest rents were the Metropolitan Lisbon (€8.82/m2), the Algarve (€6.96/m2), Metropolitan Porto (€6.40/m2) and Madeira (€6.32/m2).

The INE’s analysis also highlighted that the number of new rental contracts in the country this year was higher than in the same quarter of 2020 (13,772 new contracts), a close to 50% increase in rental activity. Quarter-on-quarter, the number of new leases grew by 3% (vs -9.3% in the first quarter). In the second quarter of 2021, all sub-regions reported year-on-year increases in the number of new leases.

Approximately one-third of the new contracts (7,171) were in the Lisbon Metropolitan Area. Together, the metropolitan areas of Lisbon and Porto accounted for 53% of the total number of new contracts in the country. The Algarve accounted for 6.3%. The lowest number of new contracts was in Baixo Alentejo (108).

Rents were above average nationally in the sub-regions of Metropolitan Lisbon (€8.82/m2), the Algarve (€6.96/m2), Metropolitan Porto (€6.40/m2) and Madeira (€6.32/m2 ). The lowest rents were in Terras de Trás-os-Montes (€2.79/m2) and in Alto Alentejo (€2.80/m2).

Translation: Richard D K Turner

Residential Bank Valuations Held Steady at €1,221/m2 in August

September 27, 2021 – Ana Custódio

Approximately 29,000 residential bank valuations were included.

In August, the average residential bank valuation held steady at 1,221 euros/m2, unchanged from the previous month. According to the National Institute of Statistics, the year-on-year rate of change stood at 8.2% (8.3% in July). The number of bank valuations considered rose to close to 29,000, up 35.3% y-o-y.

Compared to the previous month, the largest increase was in the Autonomous Region of Madeira (3.2%), with the Centre presenting the sharpest drop (-0.8%). Year on year, the median value of the valuations grew by 8.2%, with the highest increase in the Autonomous Region of Madeira (11.5%) and the lowest in the Centre (2.7%).

According to the INE, the average valuation of a flat stood at 1,356 euros/m2, up 9.9% y-o-y. Regionally, the highest appraisal was in the Algarve (1,649 euros/m2) and the lowest in the Alentejo (877 euros/m2). The Autonomous Region of Madeira showed the most significant year-on-year growth (13.1%), with the Autonomous Region of the Azores reported the lowest (0.8%).

Compared to the previous month, valuations rose 0.4%, with the Autonomous Region of Madeira showing the largest increase (4.2%) and the Centre Region the only decrease (-0.1%). The median value of two-bedroom flats rose 14 euros, to 1,381euros/m2, with three-bedroom flats rising 3 euros to 1,217 euros/m2. These represented, as a whole, 81% of the apartment valuations carried out in the period.

For houses, the average bank appraisal reached 987 euros/m2 in August, increasing 3.2% y-o-y. The Lisbon Metropolitan Area (€1,613/m2) and the Algarve (€1,590/m2) reported the highest values, with the Centre recording the lowest (€807/m2). The Autonomous Region of the Azores showed the highest year-on-year growth (7.9%), with the weakest in the Centre (0.6%). Valuations decreased by 1.1% m-o-m. The Autonomous Region of the Azores showed the largest increase (1.1%), while the most significant decrease took place in the Algarve (-2.3%). Compared to July, the values for two, three and four bedroom houses, which account for 89.1% of the valuations, reached 923 m2 (-16 euros), 981 m2 (-7 euros) and 1,038 m2 (-12 euros).

The INE’s calculations took into account 29,315 valuations, 35.3% more than in the same period of the previous year. Of those, 18,642 were flats and 10,673 were houses. In comparison with the previous period, there were 1,147 less bank appraisals, a decrease of 3.8%.

Translation: Richard D K Turner

Mortgage Loans Increased by 4% Compared to August 2020

The increase in the volume of loans amounted to 95.6 billion euros.

September 27, 2021 – Ana Custódio

The increase in the volume of loans amounted to 95.6 billion euros.

According to the Bank of Portugal, the volume of residential mortgages rose by 4% to August 2020. The results also indicate that the pace of lending to companies slowed once again and that corporate deposits reached a new high.

The total amount of loans granted to households for housing in August 2021 grew by 4% compared to August 2020, reaching €95.6 billion. These loans had increased by 3.9% in the previous month.

Consumer loans grew 1.3% year-on-year in August 2020 to €19 billion (vs 1.6% in the previous month).

In turn, the total amount of loans granted by banks to companies in August 2021 grew by 5.2% y-o-y, to €76.2 billion (vs 5.9% in July).

Deposits held by households at banks in Portugal grew by 7.1% year-on-year to €169.3 billion in August 2020 (vs 6.6% in the previous month). Portuguese residents have been increasing their savings with banks since March 2020, accompanying a trend common to the euro area as a whole.

The Bank of Portugal stated that “since May 2020, the volume of deposits companies are holding with banks resident in Portugal has grown more than 14%. In August 2021, these deposits grew by 16.3% year-on-year to €58.8 billion (vs 14.8% in the previous month), reaching a new all-time high.”

Translation: Richard D K Turner

Urban Rehabilitation Up by 5.6% in August

In the month of August, there were increases in the main indices tracking the sector.

September 27, 2021 – Ana Custódio

In the month of August, there were increases in the main indices tracking the sector.

The data was published within AICCOPN’s (Associação dos Industriais da Construção Civil e Obras Públicas) Urban Rehabilitation Barometer. According to the monthly survey of the Rehabilitation market for August 2021, which queried executives in the sector, the main qualitative indices rose across the board in year-on-year terms.

According to the analysis, the index that measures the evolution of the Activity Level reported growth of 5.6%, compared to August 2020, slightly below the previous month (6.0%).

As for the Order Book index, AICCOPN observed a year-on-year increase of 8.3%, an acceleration compared to the 6.3% seen in July.

Contracted production, the guaranteed working time based on existing orders, stood at 8.7 months, a drop of 2.2% y-o-y.

Translation: Richard D K Turner

OptylonKrea Launches €150 Million Fund

STAG Fund Management chose OptylonKrea as its partner in the new venture.

September 27, 2021 – Ana Custódio

STAG Fund Management chose OptylonKrea as its partner in the new venture.

The pan-Mediterranean real estate development and investment management company OptylonKrea has joined with the venture capital firm Stag Fund Management to launch a new €150 million fund.  The Prima Europe Fund is aimed at investors seeking to benefit from the Residence Permit for Investment Activity (ARI) regime, also known as the Golden Visas, by investing in Prima Collection branded residences.

Present in Portugal since 2015, OptylonKrea, fund advisor for three golden visa access investment funds, seeks opportunities in the ost-Covid economic recovery and points to Portugal as one of the countries that will benefit most from changes driven by the pandemic, both in the way of working and travelling.

According to the company, studies show that the market for branded residences, residential units belonging to a renowned accommodation brand, has grown 236% worldwide in the last ten years and is expected to continue expanding over the next decade. This property sector, which can achieve a premium of up to 31% compared to non-branded residences, is expected to see an increase in market shares in the main Mediterranean countries over the next few years. Forecasts are that they will reach 50% of the European market and around 10% of the global market, supported mainly by large projects in Portugal, Turkey and Spain. Proof of this is the Prima Collection residences’ occupancy rates in Lisbon, which reached 78.56% in 2020, compared with around 21% in hotels.

Pandemic and telecommuting will have long-term impacts on consumers’ travel habits. In this context, OptylonKrea has opted to redefine its Prima Collection brand, born in Lisbon, and adapt it to the new market needs. At the same time. It is preparing to expand to other Mediterranean spots, with the goal of reaching up to 25 new locations in the next five years. The Prima Collection residences are defined as “a new genre in coliving” that combines the characteristic lifestyle of branded residences with local and cultural contact.

Translation: Richard D K Turner

Housing Prices Up 6.6% in the Second Quarter of the Year

The Housing Price Index rose by 6.6% year-on-year, 1.4 percentage points more than during the previous quarter.

September 23, 2021 – Ana Custódio

The Housing Price Index rose by 6.6% year-on-year, 1.4 percentage points more than during the previous quarter.

According to data published today by the National Statistics Institute, the Housing Price Index (HPI) rose by 6.6% year-on-year in the second quarter of 2021, up 1.4 percentage points from the previous quarter. The price of new houses rose at a faster pace than for existing homes, by 6.9% and 6.5%, respectively.

Quarter-on-quarter, prices rose by 2.2% (1.6% in the 1st quarter of 2021). The increase in prices was more intense for new housing (3.5%) than for existing housing (1.8%). Between April and June 2021, 52,855 units were sold, an increase of 58.3% y-o-y. This increase is primarily due to the base effect, given that the year-on-year comparison focuses on the months of April to June 2020, a period with significant restrictions due to the COVID-19 pandemic. Those restraints led to the lowest number (and value) of transactions since the third quarter of 2016.

According to INE, the value of homes sold in the second quarter of 2021 reached approximately 8.6 billion euros. The figure represents an increase of 66.5% compared to the same quarter of the previous year. Of that, seven billion euros corresponds to sales of existing housing (up 70% y-o-y). At the same time, 1.6 billion euros were related to purchases of new housing (year-on-year increase of 53%). April reported the highest year-on-year growth in the period under review, 72.4%, followed by June (64.3%) and May (63.9%). Compared to the previous quarter, homes sales grew by 23.7% in the second quarter of 2021 (-8.1% in the 1st quarter of 2021). Growth in the value of new houses exceeded that of existing dwellings by 24.1% and 23.6%, respectively.

Translation: Richard D K Turner

Spain’s INVARIA Invests in Housing in Lisbon

The project, located at Rua Armando Ferreira 5, Quinta de Santa Clara, Lisbon, will consist of 6 distinct plots, with a total land area of 16,994 m2. The project, which has an approved PIP, will have an aboveground construction area of 19,260 m2. The PIP defines what has to be transferred to the Lisbon City Council and other obligations.

September 23, 2021 – Ana Custódio

In total, 220 flats will be placed on the residential market in Lisbon.

The project, located at Rua Armando Ferreira 5, Quinta de Santa Clara, Lisbon, will consist of 6 distinct plots, with a total land area of 16,994 m2. The project, which has an approved PIP, will have an aboveground construction area of 19,260 m2. The PIP defines what has to be transferred to the Lisbon City Council and other obligations.

Based in Madrid, INVARIA is selling the land, which already includes all necessary infrastructure, with accesses and a roundabout. The PIP also consists of a retail area that has been approved as a supermarket. An investor will only have to carry out the architectural project, licensing and construction.

At a time when the shortage of housing supply in the main urban centres is high, combined with the lack of land approved for construction in the city of Lisbon and its surroundings, INVARIA’s project is expected to attract young couples to Lisbon, as well as being an attraction for the younger generation who come to study in the capital. The lack of housing with controlled costs means that young people and the middle class do not have access to quality housing in Lisbon. This is a project that gives access to a product with good value for money.

The plot in Ameixoeira, a parish bordering Lumiar and the municipalities of Loures and Odivelas, has an excellent location and easy access, being, on the one hand very close to the North-South Axis and on the other hand, near to the Metro yellow line, between Senhor Roubado and Lumiar stations. The line provides easy access to the University City, Lisbon Airport and Eduardo VII Park. Ameixoeira is an increasingly sought after residential destination, which combines the cosmopolitan experience of a location close to the centre of Lisbon with the advantage of enjoying a vast transport network, proximity to services, educational and commercial facilities, and cultural and leisure attractions.

Finally, one of the great potentials of the project is the fact that plot 6, which has 11 floors and the largest construction area, can also be converted into a university residence, which makes this plot even more attractive for construction at a time when student residences are increasingly emerging in the city of Lisbon.

INVARIA is a Spanish company based in Madrid, specialized in the real estate sector with experience in all types of operations (investment, divestment, valuation of real estate assets, urban management, WIPs and acquisition of NPLs / REOs).

Translation: Richard D K Turner

Thor Spain Enters Portugal, Building Three Retirement Homes for More Than 30 Million Euros

Setúbal, Guimarães and Algarve were chosen as the locations for Thor Spain’s next retirement homes.

September 21, 2021 – Ana Custódio

Setúbal, Guimarães and Algarve were chosen as the locations for Thor Spain’s next retirement homes.

The developer had previously stated that one of its goals would be an entry into the Portuguese market after its expansion in Spain. And they are delivering on that promise. The Spaniards from Thor Spain Private Equity will enter Portugal with three 120-bed retirement homes.

The residences are located in Setúbal, Guimarães and Algarve. Each of the residences involves an investment of between 10 million and 14 million euros, according to an interview with Miguel Ángel Pascual, Thor’s general director, with PlantaDoce, a publication specialised in health.

According to the article in PlantaDoce, the healthcare and hospital developer will set up in Setúbal, Guimarães and Algarve as part of its international expansion plan. Each of the three centres involves an investment of between 10 million and 14 million, but the company does not intend to stop there.

According to Mr Pascual, “We are working on new projects so that next year we can have between 600 and 1,000 beds under construction.” UK and Italy are part of the real estate developer’s plans. The company’s strategy involves building the centres, which a specialised operator subsequently manages.

Thor Spain Private Equity has retirement home projects in Spain, including a total of 2,775 places in different degrees of development. The company also specialises in hospitals and health centres.

Translation: Richard D K Turner