Porto’s Palácio dos Correios to Become Office Building (and Not a Hotel…)

3 October 2018

The Palácio dos Correios, on General Humberto Delgado Square, next to Aliados in Porto, will be converted into a new development with offices and shops, not a five-star hotel, as had initially been announced. The Porto City Council did not like the idea of having a hotel built on its doorstep. The Ferreira group, now the sole owner of the iconic property – Habitat Invest sold the 50% that it owned to the group led by Gaspar Ferreira, adapted its plans, ceding to the municipality’s wishes.

idealista/news discovered that the new plans, which were presented to the local authority by the Ferreira group, appeal to everyone and the project’s reception has been such that, though the renovations have yet to begin, more than a third of the office space has already been reserved.

The well-known palace is next to another building where the municipality’s offices are located. The local government acquired the property from an investment fund in late 2017.

The municipal building, together with the property owned by the Ferreira group – known as Palácio dos Correios – had been in the running to house the headquarters of the European Medicines Agency, should Portugal win the application, but the site lost its bid.

Lack of services led to group to rework project

Rui D’Ávila, a director at the Ferreira group, told idealista/news that the iconic building of the Palácio dos Correios – located next to the City Hall and where the CTT still has a small store – will be rehabilitated and converted into offices and shops.

The municipality of Porto, which had noted a lack of services in the city’s downtown, lent its support to the new plan, to the detriment of the group’s initial plans to build another five-star hotel.

Three hotels are currently under development on Avenida dos Aliados, and two of those will be 5-star hotels. Three other projects are under study. Those, however, may also be transformed into housing and commerce.

Grupo Ferreira to invest €40 million

Rui D ‘Ávila explained that the new plans would cost less, about 40 million euros versus 55 million euros for the hotel), and that the construction would last less than a year.

“The goal is to have the rehabilitation of the office component completed by the end of 2019,” Mr D ‘Ávila said.

However, he guaranteed that the Ferreira group’s work would be second to none. “It will be one of the best office developments in the city,” the executive stated, highlighting the property’s prime location.

More than a third of the offices have been reserved

According to João Leite Castro, the head of Predibisa Corporate, of the Palácio dos Correios’ 16,000 square meters of forecast office space, more than six thousand square meters have already received expressions of interest. However, he believes that the entire complex will be fully reserved within a few months, considering the level of demand in Porto for these spaces.

Rui D’Ávila shares the same conviction, stating that, at this moment, the project’s profitability has already been guaranteed.

The executive also added that “in the first phase, priority will be given to remodelling the upper floors and only then will the stores be converted.”

Street-facing shops

Three stores, with areas of 200 m2 each, are planned for the side of the building that faces the Avenida dos Aliados. Additional shops will be built at the back of the building, but with lower areas.

Mr D’Ávila stressed that street retail in downtown Porto is still in a nascent phase. He believes that will change after the completion of a series of projects, some in prime buildings, that are currently under construction.

Original Story: Idealista – Elisabete Soares

Translation: Richard Turner