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Companies Invest More Than €1 Billion in Real Estate in Greater Porto
7 November 2017
Returns in prime locations are higher in Porto than in Lisbon, Madrid or Barcelona, Predibisa, one of the largest operators in the market, states.
Porto was the focus of more than €1 billion in institutional investments between 2000 and 2016 and, compared to other major cities in the Iberian Peninsula, such as Lisbon, Madrid and Barcelona, the city still has higher prime yields and lower rents, João Nuno Magalhães, according to the director-general of Predibisa, in Porto’s 5th Urban Rehabilitation Week.
According to the real estate consultancy that specialises in the north of Portugal, Porto is firmly in the eye of international investors. Among the most profitable types of real estate investment in Porto are “in the area of services, offices, real estate for local tourist accommodation, hotels and student residences and, in the retail sector, street stores, retail parks and the shopping centres.” Investments in the areas of industry and logistics and long-term rental housing are also seen as profitable.
According to João Nuno Magalhães, of the one billion euros invested in this geography, “the majority, 52%, the equivalent of 550 million euros, was invested in the retail sector. About 250 million euros were invested in offices and €150 million in industry.”
Porto has better yields in prime locations for retail, offices, the logistics sector and hotels when compared to Lisbon, Madrid and Barcelona. “On the other hand, the rents are lower than those practised in other cities on the Iberian Peninsula. It is this quality-price factor that makes Porto a unique destination for real estate investment. Greater regularisation and transparency of the market, a greater supply of specialised human resources and the development of high-quality office space are imperative to maintain current levels of investment,” João Nuno Magalhães explains.
The 5th Urban Rehabilitation Week was held on November 6th, with the presence of the Secretary of State for Housing, Ana Pinho, who listed the various financing programs that the government is sponsoring regarding the restoration of existing properties. Secretary Pinho went even further, stating that the recuperation will allow individual cities to complement the programs with an attempt to address other urban difficulties. Among them is, she stressed, is the problem of urban cohesion.
At the level of the State Budget for 2018, the Portuguese government also decided to back the increase of investments in urban renewal, as far as tax legislation is concerned.
Original Story: Jornal Econômico – António Freitas de Sousa
Translation: Richard Turner