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The State of the Portuguese Real Estate Market in June
Rounding out the first semester of the year, May brought a slew of announcements in the real estate market and new investments all over Portugal. There were deals in every market sector, with the principal emphasis on housing and hotels. If, on the one hand, bets on the Portuguese residential market are considered safe and profitable, on the other, and despite two years in which the tourist sector was almost stagnant, the hotel segment is now emerging and proving to be increasingly resilient in the face of past and present adversity. It should be noted that although the pandemic is lessening in its effects, Russia’s invasion of Ukraine has triggered a series of economic effects, adding to sector restraints. But the fact that Portugal is far from the conflict and has an enviable location in the south of Europe brings with its hopes of a rapid recovery of its tourism sector, especially in hospitality.
Residential
In May, doValue announced the launch of a new luxury development in Funchal, the capital of the Madeiran archipelago. The Casas Brancas development comprises 11 villas and is located in a tourist area in the parish of São Martinho, Funchal. The project is set on a rectangular geometrical plot of 3,322 square meters. The villas are arranged on three levels, enabling every flat to have south-facing balconies and terraces with excellent sun exposures and sea views.
Meanwhile, a project to develop 400 flats in an investment of 16.25 million euros was announced. The new residential project has the potential to build over 50,000 m2, located next to the Marina de Lagos in the Algarve. Marina Park II has an approved PIP with the potential to build around 400 residential units and retail assets. The project represents an excellent opportunity to boost the supply of homes in the Algarvian city. It foresees a total construction area of over 51,000 m2, of which 49,520 m2 is distributed over 16 plots for residential development, along with 1,600 m2 for retail.
It was only halfway through the month when the São João da Praça appeared, the new residential project in Alfama with prices ranging between 500,000 and 1,040,000 euros. The project is next to the Sé de Lisboa. It comes from the rehabilitation of a 9-flat Pombaline building in Alfama, bringing modern flats, one and two-bedroom homes, to this traditional neighbourhood, with two duplexes on the top floor. The flats’ surface areas vary between 60 m² and 124 m². Construction began in April, and delivery of the flats is scheduled for the last quarter of 2023.
News was released at the end of the month that the Pestana Group had inaugurated the Madeira Acqua Residences in a €100-million investment. The Madeira Acqua Residences results from the refurbishment of the Madeira Palácio Hotel and has 181 flats, ranging from 1 to 4 bedrooms and penthouses. Madeira Acqua Residences has over 7,000-m2 of gardens, direct private access to the beach and an infinity pool on the cliff’s edge, immediately overlooking the sea.
Offices
The highlight for this sector was the sale of a building on Avenida de Berna for €15 million. Cofidis and Prosegur currently occupy the building. The property, located at 54 Avenida de Berna in Lisbon, was acquired by a Portuguese institutional investor from Tristan Capital Partners’ CCP 5 fund. The building has a gross area of 3,825 m2 and 124 parking spaces, located opposite the Calouste Gulbenkian Foundation. The property is between Campo Pequeno and Praça de Espanha.
At the end of the month, CORUM Eurion announced the acquisition of a building in Porto for 16 million euros. Owned by the French management company Corum Asset Management, CORUM Eurion bought the building in the business centre on Rua do Heroísmo in Porto. The building was completely refurbished in 2021, has 6,072 square metres of surface area, and has tenants such as the tech companies Infraspeak, Koerber and Sitel.
Retail
At the beginning of the month, Mercadona opened a new shop in Póvoa de Varzim. With a sales area of 1,900 m2, it is the chain’s 31st supermarket in Portugal and the first in this city. It is on Rua Comendador Francisco Quintas, in Póvoa de Varzim, though no investment amount was revealed.
Meanwhile, Auchan has invested around €40 million in a new shop in Cascais. The old Pão de Açúcar shop, the first supermarket to open in the country 49 years ago, has been renovated. The store will have an area of around 7,000-m2, a garden at one of the entrances, a rooftop on top of the shop with sea views and a shopping gallery with several restaurants.
Hotels
A major announcement came in this sector, as Discovery Hotel Management launched Octant Hotels. DHM announced that the group’s new brand would group and manage the eight hotels owned by the Discovery Portugal Fund in Portugal, called Octant Hotels. DHM’s portfolio includes a unique set of boutique hotels throughout the country, which will become part of the Octant Hotels brand. The hotels include the Douro41 Hotel & Spa, the Palácio da Lousã Boutique Hotel, Évora Farm Hotel & Spa, Santiago Hotel Cooking & Nature, Praia Verde Boutique Hotel, Vila Monte Farm House, the Azor Hotel and Furnas Boutique Hotel.
Meanwhile, Azora acquired the Pestana Blue Alvor in the Algarve. Built in 2019, the Pestana Blue Alvor boasts 120,000 square metres of surface area and almost 500 rooms. The asset is Azora’s fourth investment in Portugal, following its acquisition of the Tivoli Marina Vilamoura resort, the Tivoli Carvoeiro resort and the Vilalara Thalassa Resort. The acquisition was completed through its Azora European Hotel & Lodging fund. Azora finalised its purchase of the Pestana Blue Alvor, though its investment was not revealed.
Mid-month saw the emergence of the Herdade Monteverde, a new residential tourist resort on Lisbon’s south bank. Located in a 102-hectare nature reserve, Herdade Monteverde will have 355 residential units, including detached villas, townhouses, and flats. In partnership with the SIL Group, HomeLovers is now exploring the new project after the success of the Herdade da Aroeira. It is a tourist residential development, so that it may be eligible for golden visa buyers. Prices for detached villas start at 740,000 euros, with townhouses beginning at 420,000 euros.
Next, Sonae Capital announced the sale of the Aqualuz Tróia Mar & Rio and The Editory By The Sea Tróia-Comporta. Sonae Capital’s Hospitality business unit will keep the management of The Editory Hotels, totalling 377 accommodation units. The sale was one of the largest real estate deals in hotels carried out in the Portuguese market since the beginning of the year, though the value of the transaction was not disclosed.
Towards the end of the month, Sonae Capital opened a new luxury hotel in Porto, investing around 20 million euros. The Editory Boulevard Aliados Porto Hotel is the new five-star hotel in Aliado, with 68 rooms. The Editory Boulevard Aliados Porto Hotel is a new space in the heart of Porto, offering nearly seven dozen rooms, a heated outdoor pool, two meeting rooms, a sensorial restaurant and a cocktail bar. The hotel is the result of a partnership between FVC Group and SC Hospitality, with the architecture and the interior design designed by Ding Dong.
NPLs
Near the end of the month, Novo Banco announced the sale of a portfolio of logistics properties. The deal’s completion is expected to positively impact around 35 basis points on the Novo banco group’s total capital ratio. The buyer’s identity and the investment value of the logistics properties located in Portugal were not released. The portfolio of real estate assets was held mainly by the real estate funds NB Património and NB Logística, both managed by GNB Real Estate. Novo Banco held a 75% stake in the real estate assets in March 2022.
Alternative Assets
In the north of the country, Supera announced an investment of €10 million in Gaia. Supera already operates two sports centres in Portugal and has seven other projects underway in Portugal. The Spanish group will build a swimming complex in Gaia, having gained a 40-year municipal concession. The Aquatic Training Complex will be built in Gaia’s Parque da Lavandeira. The Galician group Sidecu, which operates the Supera gyms brand, has 45 gyms in Spain and two in Portugal. The brand also has other projects underway in Portugal, in Braga, Porto, Coimbra, Seixal, Barreiro and Lisbon.
Later last month, a new campus of the British School of Lisbon was announced due to a 30-million-euro investment. The second campus, with 7,000-m2, 30 classrooms, a swimming pool complex and a sports pavilion, will be located on land adjacent to the Belenenses stadium. Following an agreement with Belenenses Football Club, the British School of Lisbon plans to open its second campus in Lisbon. The space will be built on land located above the main stadium.