A Record €1.4 Billion Invested in Commercial Real Estate in First Six Months of 2018

31 July 2018

Investment in commercial real estate in Portugal broke every record in the first semester of 2018, with a total of 1.4 billion euros invested in 23 transactions – three of which were included in the list of the top 10 largest sales on record.

“This semester stands out for the addition of three transactions to the list of the largest deals ever in Portugal (as calculated by CBRE since 2003) – the sale of the Blackstone portfolio, including Forum Montijo, Forum Sintra and Sintra Retail Park, as well as Dolce Vita Tejo and Lagoas Park,” the real estate consultancy said in a statement.

The company highlighted the sale of Lagoas Park, located in the municipality of Oeiras, to the US investment fund Kildare, for approximately 375 million euros. That transaction included 13 office buildings, a shopping arcade, a gym, a school, a four-star hotel with a conference centre and a public car park.

An active market for shopping centres

Investments in shopping centres totalled 650 million euros for four venues: the three mentioned above and SerraShopping.

“Thus, in the first half of 2018, retail assets accounted for a 57% share of the total investments, while offices accounted for 37%. The capital involved in the sales was almost exclusively international, with the French holding the principal share (46%),” the consultancy explained, adding that another 11 shopping centres are currently for sale, or about to come on the market.

“Given that not all the deals will be finalised this year, CBRE expects to end 2018 with approximately €1.4 billion in investments in the sector, easily a record high. CBRE estimates that the total volume of investment will thus exceed 3 billion euros for the year, possibly reaching €3.4 billion (after reaching a record high of €2.2 billion last year),” CBRE noted.

Offices (also) powering market

There continue to be interesting levels of absorption in the office market, despite a supply shortage.

“In the first half of 2018, 83,000 square meters (m2) were occupied in Lisbon, in addition to 43,500 m2 in Porto, corresponding to increases of 6% and 40% respectively, compared to the same period in the previous year. Of note were allocations to outsourced service providers (including shared service centres and contact centres) and information technology, as well as users of flexible spaces (whether operators, co-workers, accelerators or incubators), the consultancy concluded.

Original Story: Idealista

Translation: Richard Turner