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BPI to Sell an Entire Block in Downtown Lisbon
28 January 2018
The property, a few meters from the Arch on Rua Augusta and the Terreiro do Paço, has a terrace overlooking the Tagus River.
Banks have been taking advantage of the good times in the Portuguese real estate and are selling some of their holdings, some of which are worthy of note. BPI is just the latest example of the trend. The bank chaired by Pablo Forero has just put its principal and oldest property in Lisbon on sale, an entire block located in the area of Baixa, in front of the Design Museum and right next to the Arch on Augusta Street and the Terreiro do Paço.
The bank’s reason for selling at this moment could not be more apparent. “There is a market for these buildings right now. It is clearly an opportunity. A few years ago, there was much less demand,” a source at BPI explained. Besides, he added, “this is a rationalisation and normal management of resources. This area [of Lisbon] has changed a lot. Earlier it was the financial district, but no longer, there are almost no banks here, and it is no longer as practical to work [in the area] as it was before. In addition, as they are older buildings, they always have some limitations on the use of the space.”
In total, the property is composed of five buildings built with 18th-century Pombaline-style architecture, which the company had bought up and interconnected. The property now has a total of 11,100 square meters of above-ground area. “BPI is a venerable institution. Over the years we bought several banks that were situated nearby, such as Fonsecas & Burnay and Pinto & Sottomayor, and the buildings were joined together,” he stated. It is therefore “a special property, with one entrance on the Rua Augusta, and others on the Rua do Comércio, the Rua de São Julião and the Rua do Ouro. It will definitely be in demand,” the same source at the bank said.
And, in fact, it is already attracting possible buyers. According to Fernando Vaz Costa, director of the JLL’s marketing division, which was granted exclusivity to lead the transaction at the end of last year, the “property is already attracting interest” even though it was only put on sale on January 15. “We opened what we call a competitive selling process, that is, we sent letters to a very long list of contacts, mostly international investors of all nationalities, but also some Portuguese and now we are going to conduct visits, which started on Saturday [January 21th]. [Visitors] must come during the weekend, when the property is empty,” Fernando Vaz Costa, who is involved in the deal, explained.
Any interested parties must then submit their proposals by February 23, at which point BPI and JLL would analyse them and begin in the process of negotiations with the investors that submitted the best offers. Both BPI and JLL declined to disclose their valuations of the property, saying that to do so could negatively affect the sale process.
After the negotiations, a winner will be chosen, which should occur towards the end of this year, when the property will no longer be occupied. This is the deadline that BPI has given to the “hundreds of people” who work in the downtown property, who will be transferred to four other buildings around the capital. “We own a tower near Saldanha, in Casal Ribeiro, which was the former headquarters of the Banco de Fomento Nacional, the Jean Monet building, where the European Commission is housed, and we own spaces in the Torres de Lisboa and a building in Braancamp, in front of the Loja das Meias,” the same source of the bank stated. They will not, therefore, need to construct any new premises to receive the employees, one of the reasons that the bank decided to go ahead with the sale.
Property Has “Amazing Potential”
According to Fernando Vaz Costa, the property is not an asset that appears on the market every day. It has a considerable size – occupying an entire block – and is “in a unique location”, especially considering its location in Baixa, where there are few properties of the kind for sale, but a great deal of demand. In addition, the property “is in good condition, including both its exterior and interior, and which will be emptied of its occupants by the end of the year, as the bank is leaving the premises.” The property can, therefore, be renovated for any use or even mixed use, for example placing shops on the ground floor because, “there is a lot of demand for spaces there, especially by more expensive brands.”
According to Fernando Vaz Costa, the property can also be converted into use as a hotel, as “at this moment, there are some tourists and businesspeople who have problems finding and reserving rooms, and more capacity is needed. And even if the tourism sector does not continue to grow at the pace it has before; it will continue to grow.” The property could also be used for housing, as there has been increasing demand in that area, and any new developments that appear are rapidly sold.
For example, right in front of BPI’s property, on the Rua do Comércio, even closer to the Terreiro do Paço, the Arco Augusta project is under construction. The property was the headquarters of Novo Banco, which sold it recently, and is now being transformed into 28 apartments, from studios to two-bedrooms, with areas between 57 square meters and 141 square meters. Prices are expected to range from €425,000 to €900,000. The development will only be ready in 2019, but all but seven apartments have already sold, according to the website of the luxury real estate agency Porta da Frente, responsible for marketing.
There is no doubt that BPI’s property has “enormous potential”, Fernando Vaz Costa summed up.
Original Story: Expresso – Ana Baptista
Photo: D.R.
Translation: Richard Turner