7 April 2021 – Jose Covas – Socio Director Aura REE Portugal
The last month of the fiscal year saw significant investment in various sectors of the real estate market. The end of March was marked by the Portuguese government’s decision to extend the deadline for the classification of urban/rural soils. Published in the Official Gazette, the decree provides important alterations in relevant matters for the management of projects and real estate assets, extending the deadline to the end of 2022. At the beginning of the month, the government announced that it had signed 285 contracts under its Financial Instrument for Urban Rehabilitation and Revitalisation – IFRRU 2020. The investment amount totalled over 800 million euros and is intended for the comprehensive refurbishment of buildings and improving their energy performance.
The arrival of spring also brought news regarding Portugal’s non-performing loans. At the beginning of March, it became public knowledge that Davidson Kempner Capital Management won the tender to acquire the Wilkinson Project. The Wilkinson Project is a slightly more than €200-million portfolio of non-performing loans from major corporate debtors.
Towards the end of the month, the national banking sector put participation units in the tourism fund Discovery Portugal Real Estate Fund, valued at more than €400 million, up for sale. BCP, Novo Banco, Caixa Geral de Depósitos and Oitante are selling their stakes in the fund, managed by Explorer and operates over 40 assets in Portugal. The fund has a net asset value of 850 million euros, and the participation units are valued at over 400 million euros.
On the south bank of the Tagus, the Innovation District, a new global city in Almada, is going up in an investment of 800 million euros. The project has the attraction of combining a unique and sustainable lifestyle in a new area focused on innovation and technological knowledge. A total of 4,5000 new residents are expected to the new city, which has a total area of 399 hectares, including 110 hectares of gardens. The creation of 1,000 new housing units and an area of 250,000 m2 for the implementation of new economic activities will contribute to the creation of 17,000 new jobs and also 86,000 m2 of tourist infrastructures.
Avenue launched its latest venture, located in downtown Porto. Bonjardim will be the focus of the 57-million-euro investment. The venture combines housing and retail and a hotel, which The Student Hotel will operate.
Avenue, which invests in luxury products, also announced it is looking for opportunities to build homes for the middle and upper-middle classes in Lisbon and Porto and is also preparing a new cycle of investments for Lisbon and Porto that will amount to 300 million euros, including projects for the middle class. The developer is in the final phase of acquiring two plots of land in Lisbon. It will develop residential buildings from scratch for the first time, for the middle and middle-high segment, and is studying another potential investment.
Retail and Logistics
The Lidl supermarket chain opened a new shop in Rio Tinto, Gondomar and reopened four units, in a total investment of 180 million euros. The move follows the retailer’s process of expanding and modernising its shop network all over the country by 2020.
At the beginning of the month, the North American company Panattoni announced that it would enter the Portuguese market with two logistics projects in the Lisbon region. The company will acquire land to develop two logistics assets in the Lisbon region, investing 190 million euros until 2023 in 16 projects in the Iberian Peninsula.
The Hi Fly Group announced that it intends to acquire land to build a logistics centre near Beja airport. Mesa will build the new logistics centre in a 10-million-euro investment. The new centre aims to support aircraft maintenance at the airport and will have a 9,000-m2 storage area for parts and consumables for aircraft and workshops, plus a further 3,000 square metres for offices.
Altamira Portugal announced the sale of three assets to JOM, a Portuguese household goods chain, for over 6 million euros. The assets include two retail parks and land for a future commercial project. Caldas Retail Park was acquired for more than €2.7 million, and Guimarães Retail Park had an investment of €3 million. The Portuguese family group also snapped up an approximately 17,000-m2 plot of land next to Arena Shopping in Torres Vedras.
The SANA Hotels group is preparing to build a five-star luxury hotel in Vila Nova de Gaia’s centre. The hotel will be built in the city centre, in an investment that will lead to about 100 jobs, though the project’s total investment was not revealed. In Gaia, Eduardo Souto de Moura is designing a new hotel in a 5-million-euro investment by ZOF – Sociedade de Investimentos Imobiliários, which announced the new hotel project. Located under the Luiz I bridge, the new boutique hotel will have 14 rooms, a terrace, viewpoint and bar with the Douro at its feet.
In Portugal’s capital, Endutex will build its first Moov hotel, in a project that represents an investment of 10 million euros and is scheduled to open in 2022. The hotel will go up in the prime area of Parque das Nações, Lisbon. Moov Hotels looks to provide more comfort, combining quality and price with contemporary and sophisticated design and an environmentally friendly attitude. The Moov Oriente will keep the spirit that characterises the brand, offering a practical, comfortable and affordable place to stay for business and leisure travellers.
Also in Lisbon, the hotel group B&B Hotels finalised the sale and subsequent guaranteed long-term lease of its B&B Hotel Lisboa Aeroporto to MNK Partners for 14 million euros. The B&B Hotel Lisboa Aeroporto was built by the Casais Group, financed by B&B Hotels, to sell and lease it simultaneously to a real estate fund through a long-term guaranteed lease. With the sale of the B&B Hotel Lisboa Aeroporto, the group has now unloaded 100% of its real estate assets in Portugal, consolidating its asset-light business model in the Iberian Peninsula.
In Penacova, a district of Coimbra, the Monastery of Lorvão will be transformed into a new hotel by Soft Time Unipessoal, Lda, in another concession under the Revive programme. Soft Time won the tender to refurbish and operate the property, which will be transformed into a luxury hotel. The firm is expected to invest around 7 million euros, and the concession contract has a duration of 50 years, with a defined annual rent of 37,320 euros.
Portugal remains in the news for the best reasons, having been voted the best destination in Europe in 2021. Portugal was considered the best country in Europe to visit in 2021 by users of the European Best Destinations website. According to the site, users highlighted Braga, Porto, the beaches of Cascais and Algarve, Madeira and the Azores as unmissable places. France came in 2nd place, followed by Greece in 3rd place, Italy in 4th place and Croatia in 5th place.