land Market News: Portuguese Real Estate Intelligence

The Portuguese Real Estate Market in May
The arrival of the second quarter of the year and the approach of summer brought along with it an uptick in investments around the country and some changes in the tourism sector. The vaccination drive is making itself felt between the end of the confinement and the beginning of travel, as more and more investors are arriving in Portugal. They bring with them the possibility of new transactions and acquisitions and consequently an inevitable, long overdue upturn in tourism. It was only the beginning of the month when Whitestar Asset Solutions was awarded management of a €200-million unsecured portfolio composed of more than 3,700 loans from approximately 1,300 debtors.  The acquisition includes the Guincho portfolio, Portugal’s second public securitisation of NPLs (non-performing-loan) whose management had been divided between three servicers: Whitestar - Individual Secured, Hipoges - Corporate Secured and Altamira - Unsecured. Meanwhile, some long-awaited news: the Public Prosecutor and the Court of Fundão announced that they had approved the sale of BES mega estate, the Herdade do Vale Feitoso, to Vestein Spain. The property, which was converted into a kind of family fiefdom by Salgado, was bought in 2004 by the Espírito Santo Group (GES) and was converted into a place for parties and hunting trips with friends. Herdade do Vale Feitoso, located in Penha Garcia, in the municipality of Idanha-a-Nova, was considered the largest fenced private estate in Portugal. The asset consists of 7,300 hectares, of which 1,200 are a tourist hunting reserve, which was historically frequented by well-known Portuguese and international hunters. It was still early May when the Portuguese government announced that it would allocate 610 million euros under the auspices of the Recovery and Resilience Plan to fund improvements in energy efficiency and the environmental performance of buildings. Around half of the amount is earmarked for such works in residential buildings. Spanish investment is increasingly appearing in Portugal, and this time with a Spanish company investing 23 million euros in three solar parks in Alentejo. The company will take over an area of about 70 hectares for the project. The name of the leading company in the development and generation of photovoltaic solar energy in southern Europe was not disclosed. The solar parks will be built in Elvas (Portalegre), Alandroal and Arraiolos (Évora). The “Project SILK” portfolio was placed on sale for 60 million euros. The 200-property portfolio is composed of a high-quality residential portfolio located mainly in the metropolitan areas of Lisbon and Porto. Addrezza, the owner of several luxury projects in Lisbon, announced that it has a portfolio of over 200 properties for sale since March, highly concentrated assets and unique locations throughout Portugal. The Vilamoura Marina has created a stir, as the Project Vilamoura was sold to Arrow for around €100 million. Lone Star sold “Project Vilamoura” to several investors, including the British fund Arrow Capital and the executives Filipe de Botton and Alexandre Relvas. The portfolio’s assets include the Vilamoura marina, two companies and 21 plots of land with building potential.   Housing We are increasingly witnessing the emergence of new residential projects. At the beginning of the month, Kronos launched a project with 65 flats in Lisbon, in a 40-million-euro investment. The new project, The One, will be located in the centre of Lisbon, on Avenida João XXI, between Avenidas Novas and Avenida de Roma. With three years of operations in Portugal, this Kronos Homes’ fourth development in the country. Further north, Bondstone and Violas Ferreira will invest 28 million euros in a new development in Porto. The new luxury residential project Greenstone is going up in the heart of Foz do Porto. Violas Ferreira joined Bondstone (Louvre Properties) to develop this new benchmark residential project in Nevogilde. Still in the capital, DUUO is under construction on Praça de Espanha, in a 110 million euro investment. BESIX Real Estate Development launched the first phase of marketing of the 34,000 m2 premium living development. The project consists of 280 residential units spread over two condominiums, to be built in two phases of 140 flats each.   Offices JLL has completed one of the largest office transactions in recent times. The KREST Real Estate Investment office building, located next to Gare do Oriente in Parque das Nações, will be completed in 2023. Critical TechWorks will occupy 10,000 m2 in the K-Tower. The consultancy JLL has closed a pre-letting agreement for the occupation of 10,000 sqm of offices in the K-Tower with Critical TechWorks, a company resulting from a joint venture between BMW Group and Critical Software. It is one of the largest leasing operations in recent times, proving that the Lisbon market continues to be dynamic. Also in Lisbon, Eastbanc announced that it would invest 11 million euros in an office building in the capital. The new development, Alegria One, will go up on the Praça da Alegria in Lisbon that includes new office and retail spaces. The iconic building on the corner of Avenida da Liberdade and Praça da Alegria has seven floors with a total construction area of 2.800 m2, including offices, a restaurant and a shop on the ground floor. The refurbishment project will be concluded in the third quarter of this year.   Retail and Logistics Vidrala group invested 10 million euros in a warehouse in Marinha Grande, announcing the construction of a new warehouse attached to its Santos Barosa plant, the largest logistics investment in its history. In the Portuguese capital, Merlin Properties has inaugurated a 45,000 m2 logistics platform for lease. The development already has a state-of-the-art facility with 45,171 square metres of gross leasable area, divided into six modules. Merlin Properties, which inaugurated the Merlin Lisboa Park logistics park, is strongly committed to this business sector. The park has a total gross buildable area of 224,864 m2 and will be the largest logistics park in Portugal, located in Lisbon’s main logistics area, Castanheira do Ribatejo.   Further south, the first stone of the €25-million Sudoeste Retail Park was laid. The mall will have a gross leasable area of approximately 14,500 m2 with 20 Portuguese and international brands. Considered one of the largest of its kind in Portugal and the largest in the Algarve region, the development will certainly be a benchmark for the region as a whole.   Hotels and Resorts The hotel and resorts market is increasingly showing its resilience as the tourism sector begins to recover. At the beginning of May, the Ombria resort announced a start to the construction of the €30-million Villas Alcedo in the Algarve. The Finnish group Pontos, owner and developer of the Ombria Resort, will start constructing the first of 12 luxury detached villas.  The twelve Villas Alcedo are located on a plot adjacent to the Viceroy at Ombria Resort hotel. Further north, Grupo Mercan and 160 Vistos Gold have joined forces in a €56-million investment in a new hotel in Porto. The Renaissance Park Hotel - Porto will boast a contemporary design, a new urban park and an impressive view over the city. The Renaissance Park Hotel - Porto is expected to have an area of about 14,000 square meters, 163 rooms, a panoramic outdoor swimming pool on the top floor with a bar and esplanade, a 250-seat restaurant and a congress centre for up to 600 people. B&B HOTELS is strengthening its commitment to Portugal and increasing to 43 the number of hotels in the Iberian Peninsula, inaugurating a new unit in Montijo. Built and developed by the Casais Group, B&B HOTELS has inaugurated the new B&B Hotel Lisboa Montijo. The new hotel is located in Avenida João XXIII, Montijo and offers an excellent location near Lisbon, about 20 km away from the Vasco da Gama Bridge. In the Alentejo, the Mercan Group announced that it would invest 21 million euros in the new Hilton Garden Inn Évora. The project is a partnership between the RA Group (Reference Arrojada Group), and the hotel will be located less than 10 minutes from the historic city centre and next to Rossio de São Brás. The new hotel has an area of more than eight thousand square metres, with 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 space for up to 130 people. The hotel group Sana Hotels is betting heavily on the city of Lisbon with some projects that are scheduled to open as early as next summer, investing 238 million euros in the capital. One of the largest ongoing works, at Avenida Fontes Pereira de Melo, involves the SANA Marquês hotel. The Vasco da Gama Tower, in Parque das Nações, will also reopen to the public this summer. The hotel group also has a major project in the pipeline for Rua do Ouro in downtown Lisbon, which involves the rehabilitation of two blocks. The restoration of Convento da Graça is another project that the SANA group is preparing in the capital, which is still in the licensing phase and involves rehabilitating the old convent, which is rundown, into a five-star hotel with 147 rooms.
Mergers and Acquisitions Fall by 20% to April 2021
13 May 2021 - Ana Custódio There were 108 transactions in the year to April, involving a total of 2.9 billion euros. The figure stems from the monthly report by TTR (Transactional Track Record), which shows that the real estate sector was the most active, with 22 transactions. In the Technology and Internet sectors, foreign acquisitions increased by 17% in the year, while there was a 42% increase year-on-year in the number of Venture Capital transactions. Between January and April, the Portuguese M&A market saw a total of 108 transactions, involving a total of 2.9 billion euros. Those figures represent a 20% decrease in the number of transactions compared to the same period of the previous year and a 52% decrease in the capital invested. In April, 13 mergers and acquisitions were registered, between announced and closed, with a total of 406 million euro. During the period, Portuguese companies chose Spain as their main external investment market, with four transactions. The United States, in turn, stands out with a total value of 164 million euros in transactions. Spain and France were the countries that made the most investments in Portugal, with 12 and 11 transactions, respectively. The United States again stands out when considering total investments, reaching 640 million euros. At the same time, there was a 20% decrease in investments in Portugal by foreign Private Equity and Venture Capital funds. There were a total of six Private Equity transactions, totalling 200 million euros. Meanwhile, there was a 40% decrease in the number of transactions and a 75% drop in the total value compared to the same period of the previous year. There were 27 transactions in the Venture Capital market with a total value of 773 million euros, a 42% increase in the number of transactions. In Asset Acquisitions, there were 34 transactions worth 584 million euros in the year to April, representing a 9% increase in the number of transactions and a 10% decrease in the total value of transactions, year-on-year. Translation: Richard D. K. Turner
The Portuguese Real Estate Market in April
April appeared again almost like a breath of fresh air, as the real estate sector continued to perform relatively well despite the pandemic. Proof of the continued resilience came in the form of the news, halfway through April, of the increase in investments in the golden visa programme in the first quarter of 2021. Based on statistics from SEF - Foreigners and Borders Service, the investment captured through golden visas grew to 125 million euros, an increase of 4.5% compared to the same period of 2020. The Portuguese government announced an investment of €3.5 billion to build a giant data centre in Sines. The investment comes from Start Campus, a company owned by US-based Davidson Kempner Capital Management LP (Davidson Kempner) and the British firm Pioneer Point Partners. With construction due to start in 2022, involving 900 people in the first phase and up to 2,700 in total, Sines 4.0 is expected to open the first of the five projected buildings by the end of 2023. With total planned investments planned for Portugal of 20 million euros, Kempen and the pension fund PostNL made their first investment, buying 190 hectares in the Aljustrel area through a fund focusing on sustainable farmland. Kempen Capital Management, in cooperation with Stichting Pensioenfonds PostNL, inaugurated the SDG Farmland Fund. The new investment solution enables professional investors to focus on global investments in farmland while providing a significant and concrete contribution to achieving the UN’s Sustainable Development Goals. The new investment is a clear sign of the desire on the part of international investors for acquiring rural properties in Portugal for good returns, showing an increasing interest in agriculture. Residential The month had barely begun when news of Nova Vaga’s €28 million investment in a plot of land on Avenida da Boavista in Porto was reported. The asset is located at Rua Fernando Pessoa and Rua Azevedo Coutinho, which has 3,380 square meters of land area and an above-ground construction capacity of more than 13,000 square meters. The asset is located in the CBD of Porto, very close to Torre Burgo and the Bessa Hotel. Meanwhile, Millennium BCP concluded the sale of 60,000 square metres of land in Miraflores. The sale comprised 11 plots of land in the Parque dos Cisnes development in Miraflores, municipality of Oeiras. The land will be for residential use, though the sale price and the buyer’s name were not disclosed. MVGM Portugal signed a new residential management contract for up to 300 homes. The new lease management contract for an international investor with an office in Lisbon provides for an investment in Portugal of between 25 and 30 million euros this year. MVGM Portugal stated that the investor is focusing on the Greater Lisbon residential market, focusing on the areas around the city. Nexity’s new real estate project, Turquesa, will go up in the Dafundo area, in the municipality of Oeiras, in a 26-million-euro investment. The project will combine proximity to the city centre with the tranquillity of living close to nature in what will be Nexity’s second residential project. Turquesa will have a gross construction area of 6,576 m2 and 61 flats ranging from studios to four-bedroom apartments. The Portuguese group JOM, which owns a chain of furniture and home shops, is moving ahead with the construction of two buildings in Asprela, Porto, in a 20-million-euro investment in the rental market. One hundred sixty studios are already under construction, next to the Asprela university campus in Porto. Olimpo Studios should be concluded in April 2023. April was almost over when it became known that Millennium BCP had put 111 hectares of land in Amadora up for sale. The property is set to be the site of a new urban project in the city. The 111 hectares of land located in the centre of Amadora, of which 38 hectares are urban freehold, may allow for approximately 250,000m2 of above-ground construction. The asset is located close to the centre of the city of Amadora and follows along the parish of Mina from the railway line to the neighbourhood of Moinhos da Funcheira. Offices Novo Banco will sell the building it currently occupies in Lisbon and move to Tagus Park in Oeiras. The bank led by António Ramalho maintains the plans to sell the current structure it occupies on Avenida da Liberdade but has given up on building a new headquarters in Amoreiras. As an alternative, the bank plans to move to Tagus Park, where it already has over 500 employees. The move to Tagus Park is still expected to take some time as the space that Novo Banco currently has in Oeiras will have to be enlarged. The group specialising in technical textiles, Endutex, acquired the Rialto building in Porto. The deal’s value was not disclosed, but the property will continue to be used as offices. Endutex bought the asset that was once the head office of the insurance company AXA (now Ageas) and home to one of the most iconic cafés in Porto. The building will undergo a major renovation, receive anchor shops and new tenants. The Rialto building has eight floors, a shop, an overstorey, a basement and a gross construction area of 6,688 m2. Retail and Logistics Also at the beginning of April, Firmo, an iconic company from Porto, a leader in the sale of school, stationery and office supplies, acquired Staples’ shops in Portugal. After it was reported in March that fund manager Cerberus intended to sell Staples’ business in Portugal, Firmo was announced as the buyer. The sale price is still unknown. Meanwhile, the Spanish chain Mercadona announced that it intends to open nine more stores in Portugal in 2021, in a 150-million-euro investment. The company will invest 150 million euros and recruit 500 people to continue its expansion in Portugal. Also in the north of the country, Borgwarner announced a 25-million-euro investment in a new factory in Viana do Castelo. The new factory, which will be built in the Parque Empresarial de Lanheses, will have 17,000 square metres and start production in 2023, creating 300 jobs. After the Borgwarner group selected Portugal as a base for its expansion in Europef electrification, this will be the American multinational’s third investment in the municipality. Hotels and Resorts Reify is building the UMAY Boutique Resort in Melides. Umay is a sustainable boutique resort immersed in the idyllic natural landscape of Melides on the Alentejo coast. The project is distinguished for its eco-conscious architecture, occupying a total of 20 hectares. UMAY Boutique Resort will be an international reference and, therefore, will boast an unequalled level of quality, requiring a solid, structured and integrated development process. April was just beginning when the 3HB Hotels Group announced it would open a five-star hotel in Faro. The first five-star hotel in Faro will open in June, set within a 2.500 square metre area in the centre of Faro. 3HB Faro is the result of the refurbishment of two buildings, one of which is centuries old, in an investment by the hotel group 3HB Hotels. The 3HB Faro is the fifth hotel that the 3HB Hotels group owns in the Algarve. The value of the deal was not disclosed.