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Speculation Exists But is Limited

5 February 2018

Mariana Campos, of Structure Value, argues that the Portuguese market is in a very positive phase and says that bubbles only exist in some areas.

The value of real estate assets assessed by Structure Value, a company specialising in property valuation services, namely urban/rural real estate, machinery/equipment, brands/insignias and business, stood at €2.5 billion in 2017. That year, the firm’s turnover grew by 25% compared to 2016, approaching 400,000 euros.

Mariana Campos, Head of Structure Value’s Real Estate Valuation Funds, believes that the market is in a very positive phase. At present, the company has several projects, including at the level of banks (both real estate funds and housing loans), private individuals (inheritances) and companies (valuation for accounting purposes).

Referring to a potential bubble, a topic which is concerns many market players, the executive stated that she believes that there are just some specific areas suffering from excess price growth, primarily the residential market in the cities of Lisbon and Porto. Ms Campos asserts that prices are not at speculative levels while admitting that “it is also true that speculation may exist in certain areas.”

“However, we believe it is very [location specific] because all the agents acting in the market want to be inside the market and not outside,” she said.

Mariana Campos also argues that the market is increasingly dynamic, mainly in the centres of large cities, where construction is active, principally in the rehabilitation of emblematic buildings. For example, “in the middle of Avenida dos Aliados, in downtown Porto, AXA’s former headquarters is being transformed into a five-star hotel and next door, the Douro Azul is also transforming the former headquarters of the “Comércio do Porto” newspaper into a five-star hotel as well.”

Ms Campos also noted that there is still a lot of potential for growth in the real estate market, particularly in street commerce, especially in large cities; in new construction of housing in medium and small cities and peripheral areas; in warehouses for more sophisticated, new assets and that are often special-built with the characteristics or conditions demanded by the operators; in offices (where there is excess demand) and in hotel real estate.

Original Story: Jornal Econômico

Photo: Cristina Bernardo

Translation: Richard Turner