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Ares Capital Increases Investment in Rental Market with Another 50 Houses

18 February 2018

The group bought two shopping centres, is building an easyHotel, and are also betting on affordable homes.

When looking at a tally of the foreigners who have been investing in Portugal through the golden visa program, the Chinese stand out. But the panoply of nationalities is increasing, and the traditional Brazilians, French and English are being joined by South Africans and even the Lebanese. This variety of nationalities is also evident in the incoming foreign investment in commercial real estate. For example, in the purchase and sale of assets to undergo rehabilitation, whether shopping centres, hotels, offices or houses for sale or rent. In this case, US investment funds have led the pack, but French, Spanish and other investors are also appearing, along with hitherto less visible countries, such as the United Arab Emirates.

Ares Capital is an example. The fund, based in Dubai, is known in the market for having bought and recovered, in 2016 and 2017, the Évora Shopping Center, now the Évora Plaza, and the Acqua Roma in Lisbon. The two shopping centres belonged to Novo Banco, were obsolete, and on sale for a low price. The fund is also known for having bought, again in 2017, an old office building on the Rua do Conde Redondo, in the capital, where they will inaugurate the first easyHotel in Lisbon, which opens in April. However, the fund has been actively investing for the past five years in what is currently one of the most needed products: affordable homes for rent.

“We decided to invest in Portugal in 2013 when the country fell out of favour with international investors and the price of land and buildings fell,” says the investment director Maximilian Hegret, who added that the investments started with the rehabilitation of apartment buildings, with their subsequent placement “in the suburban rental market”, particularly in Amadora, Vila Franca de Xira, Oeiras, Barreiro, Almada, Corroios and Setúbal. In total, they have renovated more than 20 buildings, with about 250 apartments, and they aim to redouble their efforts. The fund currently has nearly 50 apartments under development in the outskirts of Lisbon, according to an official source at the company.

“We see that more and more Portuguese people are making the transition from ownership to tenancy, either by necessity or choice, but there is not enough stock at affordable prices. We believe that exploring this market is profitable but also rewarding because we will be providing lower-income households with attractive homes at reasonable prices. In our projects, the average rent for a two-bedroom flat is less than 400 euros per month. And that’s why we want to continue to add as many of these units as possible to our portfolio,” Maximilian Hegret added.

Original Story: Expresso – Ana Baptista

Photo: José Caria

Translation: Richard Turner