Month: February 2022

#BrainsFlash

February 28, 2022

The week’s highlight was an investment of around 32 million euros in the Olimpo Studios project in Porto.

Almost at the end of the second month of the year, and with Carnival about to arrive, last week saw another remarkable run for the real estate market, with major investments in housing and some news about hotels.

The week began with an announcement that the Fábrica da Cerveja in Faro will be converted into a creative hub. The Faro Town Hall will invest 13.4 million euros as a part of the city’s candidacy to become the 2027 European Capital of Culture. The refurbishment will take around five years to complete and is intended to be used by a network of local, regional, national and international partnerships. The intervention will encompass four phases, with the first two estimated to be completed in 2026 or 2027.

Meanwhile, Brainsre News Portugal has learned that OSQUARED invested around 32 million euros in a new project in Porto. At stake is the project Olimpo Studios, located on Rua Professor Armando de Castro, a few minutes away from well-known areas of the city of Porto. OSQUARED, a member of the Omer Group Investments, founded by the Israeli businessman Eli Omer, aims to create unique projects and timeless architecture and enters 2022 with this new real estate project, building and later marketing 218 flats. The company expects to invest 200 million euros by 2026, with the objective of building around 1000 units.

Closing the week, the Vila Galé Group announced that it would invest around 35 million euros this year in four hotels in the Azores, Tomar and Beja. Among the news is a €12-million investment in renovating part of the former Convent and Hospital of São Francisco, in Ponta Delgada, Azores, converting it into a boutique hotel in partnership with Santa Casa da Misericórdia. In the centre of the city of Tomar, Vila Galé will recover and refurbish several areas of the former Convent of Santa Iria and the Women’s College, with an investment of around ten million euros. For Beja, the hotel group has two projects in the pipeline: Vila Galé Nep Kids and Vila Galé Monte da Faleira. The first should cost approximately ten million euros, while the second will involve an investment of about three million euros in a new agrotourism.

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The week started with a quiet Valentine’s Day regarding transactions in the real estate market’s various sectors. However, things picked up after that, making news daily.

February 22, 2022 – Ana Custódio

The highlight of last week was Aldi’s €50-million investment in a logistics platform in Santo Tirso.

The week started with a quiet Valentine’s Day regarding transactions in the real estate market’s various sectors. However, things picked up after that, making news daily.

On Tuesday, reports came out regarding the development of a state-of-the-art office complex in Porto by Sonae Sierra and the Ferreira Group. Through an equal partnership, the project benefits from an excellent location, good highway access, an excellent public transportation network, private parking, and outdoor green spaces. The office complex will have a contemporary architecture designed by Broadway Malyan, emphasising flexibility, innovation and sustainability, prioritising quality, comfort and people’s well-being.

Meanwhile, the Vila Galé Group announced an investment of 12 million euros to convert a former hospital into a hotel. Construction is expected to begin in March, with completion in the summer of 2023. The hotel chain is arriving in the Azores by way of a partnership with Santa Casa da Misericórdia de Ponta Delgada. In what will be the second-largest Portuguese hotel group’s debut in the Azores, Vila Galé will have in a little over a year a hotel in S. Miguel, which will have 93 rooms, a restaurant and four stars.

In the logistics sector, the German supermarket chain Aldi Aldi announced an investment of 50 million euros in a logistics platform in Santo Tirso. Construction is expected to start in March, and the facility should be operational by mid-2024. The project will be built in Área Empresarial da Ermida, which corresponds to the Quinta da Chinesa. The logistics platform will occupy an area of 160,000 square metres, with 40,000 square metres of constructed surface area.

Last but not least, given that the residential still leads when it comes to the generation of new projects, a new condominium to be built in the Old Prado Factory in Matosinhos. The old sardine cannery, which closed down 20 years ago, will be completely refurbished and converted into 30 1-5 bedroom flats, just 200 metres from the beach. The development is located on one of the city’s main avenues and marketing is the responsibility of JLL and Predibisa. The value of the investment was not disclosed.

Translation: Richard D K Turner

Mergers and Acquisitions Up by 14% in January

February 11, 2022 – Ana Custódio

There were 15 Asset Acquisitions in January of 2022.

According to the monthly TTR – Transactional Track Record platform, the volume of mergers and acquisitions increased by 14% in January 2022. Real estate was the most active sector in January with 13 transactions, up by 86% y-o-y.

In January, there were a total of 39 transactions worth €505.78 million. Foreign acquisitions in the Technology and Internet sector increased 66%, while there were 15 Asset Acquisitions during the period under review.

According to the report, the Portuguese market saw 39 transactions worth 505.78 million euros in January 2022. Of those, 56% of the transactions had their prices revealed. These figures represent a rise of 14% in the number of transactions compared to the same period in 2021 and a 17% increase in the capital raised.

Read the full article in Portuguese

Translation: Richard D K Turner

IHG Group to Invest in New Hotels in Portugal

February 10, 2022 – Ana Custódio

The major news of the day is the debut of the IHG brand in Portugal. Staybridge Suites will open hotels in the city of Porto and Carcavelos.

With openings planned between 2022 and 2025, the InterContinental Hotels Group (IHG) plans to invest in five new hotels in Portugal, ECO newspaper reported, according to information published by the Portuguese news agency Lusa.

IHG plans to open two units in Porto and another three in Lisbon, Évora and Carcavelos (Cascais). The expected total investment was not announced.

IHG formally announced that its hotel brand, Staybridge Suites, will first inaugurate two hotels in Porto and Carcavelos. The group will move ahead with the Staybridge Suites Porto, Staybridge Suites Carcavelos, Holiday Inn Express Porto, Holiday Inn Express Évora and Six Senses Lisboa, the brand’s second brand in Portugal.

InterContinental Hotels Group estimates that the first two units will open in 2022, with the others planned for the following years, in 2023, 2024 and 2025.

It should be noted that this announcement came following IHG’s recent agreement with strategic partner JJW Hotels & Resorts to open three new properties in Portugal later this year.

Translation: Richard D K Turner

Dwellings Submitted for Licensing in Lisbon and Porto Fell by More Than 30% in 2021

Compared to 2020, Lisbon and Porto reported a slowdown in residential development in 2021. Dwellings submitted for licensing decreased by more than 30% in both cities.

February 10, 2022 – Ana Custódio

The level of activity also slowed down in Portugal as a whole in 2021, with 16,300 new housing projects submitted for licensing for a total of 37,500 homes.

Compared to 2020, Lisbon and Porto reported a slowdown in residential development in 2021. Dwellings submitted for licensing decreased by more than 30% in both cities.

The data was published by Confidencial Imobiliário in its Real Estate Pipeline, based on energy pre-certificates issued by ADENE. The data show that 210 new residential projects in Lisbon were submitted for licensing in 2021, including 2,520 residences. These numbers are the equivalent of a 32% drop versus the 3,700 dwellings in the year before. The number of projects fell by 47% y-o-y after around 400 projects were submitted in 2020.

Further north, in Porto, the residential pipeline for 2021 reached approximately 255 residential projects for a total of 2,150 dwellings. The figures are equal to decreases of 46% and 36% y-o-y, respectively. In Porto, a total of 480 residential projects, including 3,350 homes, were submitted for licensing in 2020.

Activity also slowed down in the country as a whole in 2021, with 16,300 new housing projects submitted for licensing for a total of 37,500 dwellings. The year before, there were 19,955 housing projects for a total of 46,340 homes, resulting in a decrease of around 19%, both in the number of projects and residences.

Read the full article in Portuguese

Translation: Richard D K Turner

IHRU to Acquire Homes in Lisbon, Porto and Algarve

According to a statement on the Portuguese Republic’s official website, the Institute of Housing and Urban Rehabilitation’s (IHRU) strategy is to expand the supply of affordable public housing and ensure access to housing for families with middle incomes.

February 9, 2022 – Ana Custódio

The IHRU’s market consultation for acquiring the real estate ends this Friday,  February 11.

According to a statement on the Portuguese Republic’s official website, the Institute of Housing and Urban Rehabilitation’s (IHRU) strategy is to expand the supply of affordable public housing and ensure access to housing for families with middle incomes.

The market consultation ends on February 11. The properties, residential buildings and flats, must meet the requirements and conditions set out in the announcement. In the municipalities of the metropolitan areas of Lisbon and Porto and the Algarve region, the location is one of the conditions.

Among the criteria are maximum figures per various sized flats. A one-bedroom apartment should have a maximum value of 213,000 euros, while a two-bedroom apartment can reach 295,000 euros. A three-bedroom apartment may cost up to 373,000 euros, and a four-bedroom apartment 430,000 euros.

The announcement also states that proposals may be submitted by any natural or legal person that owns the properties that are the subject of the proposal, as well as duly licensed real estate agencies.

Translation: Richard D K Turner

Construction Costs Rose by 6.8% in December

According to the National Statistics Institute’s New Housing Construction Cost Index (HNCI), released today, estimates are that new housing construction costs increased by 6.8% year-on-year in Decem, down 1.5 percentage points from the previous month.

February 8, 2022 – Ana Custódio

The price of materials and the cost of labour increased by 8.0% and 5.1% year-on-year, respectively.

According to the National Statistics Institute’s New Housing Construction Cost Index (HNCI), released today, estimates are that new housing construction costs increased by 6.8% year-on-year in December, down 1.5 percentage points from the previous month.

The price of materials and the cost of labour rose by 8.0% and 5.1% year-on-year, respectively. The HNCI reported an average increase of 5.7% in 2021, 3.6 percentage points higher than in 2020. Materials prices increased by 8.0% (9.4% in the previous month), while labour costs were up 5.1% (6.8% in November). According to the INE, the cost of materials contributed 4.6 percentage points to the year-on-year change in the HNCI (5.4 percentage points in November). The labour component contributed 2.2 percentage points (2.9 percentage points in the previous month).

The quarterly rate of change was -1.4% in December. Material and labour costs decreased by 0.7% and 2.3%, respectively. The materials and labour cost components contributed -0.4 percentage point and -1.0 percentage point respectively to the monthly decrease in the HNIC (0.4 percentage point and 0.9 percentage point in November, in the same order).

Annually, the HNCI was up 5.7% in 2021 (vs 2.1% in the previous year). The material and labour indices registered average annual increases of 6.2% and 5.1%, respectively (1.2% and 3.3% in 2020).

Translation: Richard D K Turner

Lace Sells Liberdade 242 to AFIAA

February 8, 2022 – Ana Custódio

Cushman & Wakefield acted on behalf of the buyer, AFIAA, which acquired the property from Lace.

The Foundation for International Real Estate Investments Switzerland – AFIAA has acquired the building located at Avenida Liberdade 242, in the heart of Lisbon. The sales price of the property, which is fully occupied by the insurance company Tranquilidade, was not disclosed.

Built in 1969 and fully refurbished in 2018, the Liberdade 242 has 9,500 m2 of surface area on nine floors. It also has 25 private parking spaces. The highly recognisable Liberdade 242 is one of the most iconic buildings on Avenida da Liberdade.

Read the full article in Portuguese

Translation: Richard D K Turner

Investment in Golden Visas in Madeira Reaches €60 Million

Between 2017 and 2021, the Madeira archipelago attracted 60 million euros through 50 gold visas. The citizens are mainly Russians and North Americans, along with Brazilians, Chinese, South Africans and Bolivians.

February 8, 2022 – Ana Custódio

Investments raised through the golden visa programme increased by 52% in Portugal in December.

The investments were mainly in the real estate sector. Between 2017 and 2021, the investment captured through the golden visa programme in Madeira totalled 60 million euros from 50 residence permits, according to an article in the Eco newspaper, based on information published by the regional government.

The regional secretary of the Economy, Rui Barreto, believes that the recent changes to the Residence Permit for Investment programme, which excluded Lisbon and Porto, are an opportunity for the Autonomous Region of Madeira.

Since 2017, the people who have acquired properties for over €500,000 in the autonomous region under the Residence Permit for Investment programme have been mostly Russians and North Americans, along with Brazilians, Chinese, South Africans and Bolivians.

Concerned with the supply of homes for locals, Mr Barreto pointed out that the Recovery and Resilience Plan (PRR) for Madeira provides 136 million euros for the construction of housing at controlled prices and support for rentals.

According to data from the Foreigners and Borders Service (SEF), investment captured through the golden visa programme increased by 52% y-o-y in Portugal as a whole in December to 42.1 million euros.

Translation: Richard D K Turner

Housing Prices Increased by More Than 10% in Half of the District Capitals in 2021

Only four cities were at this level in 2020.

February 4, 2022 – Ana Custódio

Only four cities were at this level in 2020.

The figures stem from Confidencial Imobiliário’s latest Residential Price Index. The data demonstrates that the second year of the pandemic brought an intensification in the increase of the sale prices of houses in most of the district capital cities in Portugal.

In 2021, half of the district capitals on mainland Portugal saw year-on-year increases of more than 10%. Only four cities reached that level in 2020. The analysis was based on data reported to the SIR-Residential Information System.

During that period, Faro led the ranking of annual increases in housing prices (+26.4%), followed by Setúbal (18.7%), Viseu (18.5%) and Aveiro (17.3%). In the range between 10% and 15%, besides Lisbon (+11.7%) and Porto (+10.3%), were Coimbra (13.5%), Beja (+11.8%) and Braga (+11.4%).

The remaining district capitals saw rises in 2021 of between 5% and 10%, with the sole exception of Santarém, where house prices decreased by 3.5% compared to 2020. The highest increase was around 14% (in Viana do Castelo) during that year, with Aveiro, Portalegre and Porto being the only other cities where prices increased by more than 10%.

Read the full article in Portuguese

Translation: Richard D K Turner