Activity in the Real Estate Sector Intensifies in the 3rd Quarter

27 October 2017

JLL’s latest Market Pulse reported that the Portuguese real estate market grew at an increased rate in the third quarter of this year.

The third quarter of this year was “exceptional,” as 376 million euros of commercial assets were transacted, a volume five times higher than the capital invested in the same period in 2016 (73 million euros). The sale of a portfolio of office and retail assets owned by Silcoge to a fund managed by Explorer Investment for 145 million euros, the sale of the Marquês de Pombal 3 office building to Merlin Properties for 60 million euros, and the Lx Factory deal, bought for 40 to 50 million euros by Keys, were among the most noteworthy.

Maria Empis, Director of Strategic Consulting and Research at JLL, said that “activity has grown to double figures in both the investment market and the occupational markets, having a significant impact on the accumulated results of 2017 and further intensifying growth rates.” To date, JLL has registered investments of 1.422 billion euros and estimates that the year will finish with deals exceeding the 2.5-billion-euro mark.

The allocation of offices contributed to the positive data, which grew by 87% in the quarter in year-on-year terms, with a total of 35,390 square meters taken up, bringing the annual total to 113,471 square meters, up 16% over the same period last year.

The number of homes sold by JLL doubled in the period analysed, year-on-year, and the usual slowdown in the summer period did not occur, according to the consultancy. JLL is extending its area of operation to emerging areas as well, and therefore demand has intensified in Lisbon and Porto. This demand has pushed up prices, with minimum values falling in almost all prime zones of Lisbon, on the order of 10% to 20% in the first nine months of the year.

In retail, employment is growing, both in shopping centres and on the high-street, and the limited availability of space to let has led to widening demand on more secondary streets.

In the hotel industry, four new units opened in Lisbon in the first nine months of the year, and another four are expected to open by the end of the year. In 2019, another 17 hotels are scheduled to open in the capital, an addition of 1,400 rooms. Four units were bought and sold, for a total amount of 54 million euros and 300 rooms, a record value per room, above 280,000 euros.

Maria Empis added that “the rest of the year is expected to be even more dynamic and everything is positioned to achieve an unprecedented performance in Portuguese real estate, driven by renewed confidence in the country, increased investment and sustained economic growth. All of this adds up to the recent upward revision of the Portuguese debt rating, with a very positive impact on attracting international investment and increasing financing.”

Original Story: Vida Imobiliária – Ana Tavares

Translation: Richard Turner