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Land that Housed Lisbon’s Flea Market May Be Sold in Lots
30 March 2018
The decision may lead to a postponement of the sale and possibly cause some potential investors to abandon the deal.
It has already been two years since the Lisbon City Council launched two public tenders to sell the land that held the former Feira Popular, a flea market, in Entrecampos. As of yet, there have been no interested parties. The base price of €135.7 million has been criticised as one of the reasons for the lack of buyers since an additional investment of almost twice that amount would be necessary to develop the property. However, since then the sale process has ground to a halt, leaving the almost 4.3-hectare area completely abandoned.
In February 2017, the mayor, Fernando Medina commented that the process would restart at the “a time that considered appropriate for the municipality’s interests and to have a successful sale.” Although the Portuguese real estate market has been quickly attracting an ever-greater number of investors, the real estate consultancies’ expectations that the sale would go ahead in the first quarter of this year are not bearing fruit. According to the latest reports, it may not even happen this year.
According to the newspaper Expresso, the City Council has contacted some possible interested parties informing them that they would consider selling the land in pieces instead of launching a new public tender for the whole area. This would involve undertaking a process of breaking the property down into allotments. The city would divide the space into parts and define what the buyer could build on each one of them and the price at which they would be sold.
In other words, the city would have to reconfigure its previously published plans for the entire area, which had allocated the roughly 144,000 square meters of land for construction. Within the total, the council had planned to set aside about 30% for green areas, 25% for commerce, between 25% and 35% for housing and a large area for offices.
The City Council would only be able to restart the public tender after the completion of the allotment process – which can take months – which could end up being all bought by the same investor, regardless. The new public auction would also have to be approved by the Municipal Assembly, which could, like the previous ones, request a public hearing with the area’s residents. Therefore, were the allotment to go ahead, the sale of the property would likely go ahead at the beginning of next year.
Expresso contacted the local authority, but by the closing time of this edition, it had not received a reply. However, in 2015, in its initial proposal for the approval of the public auction, the council stated that the permitted volume of construction could be higher if the sale were by lot and that this could “maximise the revenue from the sale.” But at the time, the council opted to attempt to sell the entire property, believing that the possibility of acquiring the full extent of the land would entice potential buyers.
Will Investors Back Off?
After two failed public auctions, the City Council seems to have gone back to the idea of selling the land in lots. However, the change may have already caused some investors to back off. For example, Expresso learned that Fidelidade and IKEA, who joined together to bid for the land, would decline to participate were the property separated into allotments. Fidelity, which belongs to China’s Fosun, declined to comment on the matter.
It is an indication of why the idea of selling the property in pieces is dividing the opinions of local real estate market operators. Some believe that the City Council should take advantage of the market’s current ebullience to sell the land all at once, but for others, there are now many more investors interested in buying the land, whether in lots or all together. Also, it is a “unique property,” Fernando Ferreira, the head of JLL’s investment area, told Expresso.
“Our colleagues from other cities consider it to be the best and most interesting terrain in Europe for a fully-integrated urban project. They say that there are no other available areas with those characteristics – size, location and ready to build,” Jorge Bota, CEO of B. Prime, stated.
Abandoned Land
For more than a year, part of the nearly 4.3 hectares of land has been used as a site for works by the local authority for the installation of underground garbage dumps. Inside the property, there are currently a backhoe, huge heaps of gravel, transport vans and more than 100 cement containers to bury.
But this flow of people and trucks hasn’t been enough to scare off the city’s rats – and even rabbits – who are taking over the flea market’s increasingly weedy cement floor. Even the sidewalks cannot escape the effects of time, and many are broken and strewn with garbage.
The flea market has been more or less in this state since it deactivated in 2003, almost fifteen years ago.
Original Story: Expresso – Ana Baptista
Photo: António Pedro Ferreira
Translation: Richard Turner