Tag: statistical data

#BrainsFlash

The highlight of the week in Portugal’s real estate market was the sale of Project Lucia, a portfolio of non-performing loans.

The last two years have undoubtedly had a major impact on the tourism and the hospitality sectors, but they have nevertheless maintained their strength faced with such adversity. Proof of that came again last week in the form of important announcements regarding significant investments in hotels and resorts.

The NPL (Non-Performing Loan) market also saw a major deal, announced at the end of the week. BCP finalised the sale of the non-performing loan portfolio Project Lucia. The Lúcia portfolio, comprising non-performing loans with a nominal value of €60 million and real estate assets worth €50 million, was sold to LX Partners in partnership with Cabot. Millennium BCP will continue its efforts to clean up its balance sheet.

The week was starting when Coporgest announced a €116 million investment in a new resort in Troia/Comporta. The real estate developer will build the new five-star tourist development on the Alentejo coast on land that Coporgest acquired from Sonae Capital in December 2020. The project should be completed in 2025, and pre-sales of the various villas and flats are scheduled to begin in mid-2023. The new resort includes a 5-star hotel with 58 rooms and suites, including two presidential suites, 38 villas and 91 tourist flats. The resort will be situated close to the beach, and every unit will have sea views.

Further north, in Arcos de Valdevez, the Luna Hotels & Resorts Group is preparing to inaugurate the Hotel Solar de Requeijo. In a global investment totalling 4.1 million euros, the new hotel comprises 27 rooms and suites. A deal between the municipality and the Luna Hotels & Resorts Group facilitated the acquisition and conversion of the vacant manor house into a hotel, whose inauguration is imminent.

Another important investment emerged at the end of the week, with Mercan Properties investing €187 million in three Marriott hotels. Mercan Properties has signed an agreement with Marriott International to operate three hotels in Portugal. The hotel projects are located in Lagos, Lisbon and Vila Nova de Gaia. Management will be handled by Ace Hospitality Management (AHM). They are the Marriott Lagos, in the Algarve, the Moxy Alfragide Lisbon and The Riverview, a Tribute Portfolio Hotel, located in Vila Nova de Gaia.

The State of the Portuguese Real Estate Market in February

The month of February saw both positive and negative events and reports, though they are not expected to harm the real estate market in Portugal.

The real estate sector has overcome, in various ways, the turbulence of the last few years, regularly demonstrating its resilience. On the one hand, pandemic-related restrictions are being increasingly eased, providing a boost of confidence to every sector of the Portuguese economy. On the other hand, the end of the month brought the news of a devastating war that is likely to roil the worldwide economy.

However, last month, even with Carnival, was a period of impressive reports in investment and transaction markets. There was an enormous emphasis on one of the sectors that suffered the most over the last two years but which nevertheless maintained its dynamism. In this month of February, the announcements of hotel groups stood out from the other sectors, by the sheer number of planned investments.

Residential

The residential sector continued to provide a slew of new projects. Among others, a new condominium will go up in the Old Prado Factory in Matosinhos. The old sardine canning factory, which closed 20 years ago, will be completely refurbished and converted into 30 1-5 bedroom flats, just 200 metres from the beach, on one of the city’s main avenues. Marketing is the responsibility of JLL and Predibisa. The value of the investment was not disclosed.

Offices

Also in Portugal’s north, Sonae Sierra and the Ferreira Group announced that they would develop a state-of-the-art office complex in Porto. The project fits in Sonae Sierra’s strategy regarding cities of the future and the Ferreira Group’s strategy to be present in markets with high demand. With an investment of 42 million euros, the complex will be developed with a contemporary and flexible architecture and with demanding sustainability requirements. The office complex, designed by Broadway Malyan, will have modern architecture, emphasising flexibility, innovation, and sustainability, prioritising the quality of spaces, comfort and people’s well-being.

Logistics

Meanwhile, the German supermarket chain Aldi announced a €50 million investment in a logistics platform in Santo Tirso. Construction is expected to start in March, and the platform should be operational by mid-2024. The project will be built in the Ermida Business Centre on the land at Quinta da Chinesa. The logistics platform will occupy an area of 160,000 square metres, with 40,000 square metres of constructed surface area.

Retail

In the Portuguese capital of Lisbon, Principal announced that it had acquired a supermarket for 10.2 million euros. The space has a 15-year long-term lease agreement with Continente, Portugal‘s leading food retailer and part of the Sonae Group. Principal Global Investors acquired the supermarket in Greater Lisbon, Portugal, for its Principal European Durable Income Fund (PEDIF). The market in Setúbal has 2,700 m2 of surface area.

Hotels

In February, hospitality was the most prominent sector in the Portuguese real estate market. The Editory Riverside Santa Apolónia Hotel opened its doors after a 12-million-euro investment. The new 5-star hotel results from the rehabilitation of a part of the Santa Apolónia railway station in Lisbon. The Editory Riverside Santa Apolónia Hotel has a total of 126 rooms.

Meanwhile, the Vila Galé Group announced that it would invest around 35 million euros this year in four hotels in the Azores, Tomar and Beja. Among the news is the investment of 12 million euros in the renovation of part of the former Convent and Hospital of São Francisco, in Ponta Delgada, Azores, converting it into a boutique hotel in partnership with Santa Casa da Misericórdia. In the centre of the city of Tomar, Vila Galé will recover and refurbish several areas of the former Convent of Santa Iria and the Women’s College, with an investment of around ten million euros. In Beja, the hotel group has two projects in the pipeline: Vila Galé Nep Kids and Vila Galé Monte da Faleira. The former will cost about ten million euros. Vila Galé Monte da Faleira will involve an approximately three-million-euro investment in agro-tourism.

The IHG Group will also invest in new hotels in Portugal. The big news is the debut of the IHG brand, Staybridge Suites, which will open in Porto and Carcavelos. Porto, Cascais, Lisbon and Évora were chosen for five new hotels in which InterContinental Hotels Group intends to invest. The openings are planned for between 2022 and 2025. The total investment has yet to be disclosed.

Alternative Assets

Further south, the Fábrica da Cerveja in Faro will be converted into a creative hub. The investment by the Faro City Council will reach 13.4 million euros and is part of Faro’s bid to become the European Capital of Culture in 2027. The rehabilitation will take around five years to be fully completed and is intended for a network of local, regional, national and international partnerships. The intervention will go through four phases, and the first two may be completed in 2026 or 2027.

NPLs

Montepio announced that it is preparing to sell a bad debt and real estate portfolio, and the bank hired the Japanese investment bank, Nomura, to conduct the operation. The NPL portfolio is valued at around 1.4 billion euros, but initially, a portfolio of €500 million should leave the bank. The major players in the market have not been invited to participate. Nomura is in talks with a closed group of investors.

#BrainsFlash

The week started with a quiet Valentine’s Day regarding transactions in the real estate market’s various sectors. However, things picked up after that, making news daily.

February 22, 2022 – Ana Custódio

The highlight of last week was Aldi’s €50-million investment in a logistics platform in Santo Tirso.

The week started with a quiet Valentine’s Day regarding transactions in the real estate market’s various sectors. However, things picked up after that, making news daily.

On Tuesday, reports came out regarding the development of a state-of-the-art office complex in Porto by Sonae Sierra and the Ferreira Group. Through an equal partnership, the project benefits from an excellent location, good highway access, an excellent public transportation network, private parking, and outdoor green spaces. The office complex will have a contemporary architecture designed by Broadway Malyan, emphasising flexibility, innovation and sustainability, prioritising quality, comfort and people’s well-being.

Meanwhile, the Vila Galé Group announced an investment of 12 million euros to convert a former hospital into a hotel. Construction is expected to begin in March, with completion in the summer of 2023. The hotel chain is arriving in the Azores by way of a partnership with Santa Casa da Misericórdia de Ponta Delgada. In what will be the second-largest Portuguese hotel group’s debut in the Azores, Vila Galé will have in a little over a year a hotel in S. Miguel, which will have 93 rooms, a restaurant and four stars.

In the logistics sector, the German supermarket chain Aldi Aldi announced an investment of 50 million euros in a logistics platform in Santo Tirso. Construction is expected to start in March, and the facility should be operational by mid-2024. The project will be built in Área Empresarial da Ermida, which corresponds to the Quinta da Chinesa. The logistics platform will occupy an area of 160,000 square metres, with 40,000 square metres of constructed surface area.

Last but not least, given that the residential still leads when it comes to the generation of new projects, a new condominium to be built in the Old Prado Factory in Matosinhos. The old sardine cannery, which closed down 20 years ago, will be completely refurbished and converted into 30 1-5 bedroom flats, just 200 metres from the beach. The development is located on one of the city’s main avenues and marketing is the responsibility of JLL and Predibisa. The value of the investment was not disclosed.

Translation: Richard D K Turner

Mergers and Acquisitions Up by 14% in January

February 11, 2022 – Ana Custódio

There were 15 Asset Acquisitions in January of 2022.

According to the monthly TTR – Transactional Track Record platform, the volume of mergers and acquisitions increased by 14% in January 2022. Real estate was the most active sector in January with 13 transactions, up by 86% y-o-y.

In January, there were a total of 39 transactions worth €505.78 million. Foreign acquisitions in the Technology and Internet sector increased 66%, while there were 15 Asset Acquisitions during the period under review.

According to the report, the Portuguese market saw 39 transactions worth 505.78 million euros in January 2022. Of those, 56% of the transactions had their prices revealed. These figures represent a rise of 14% in the number of transactions compared to the same period in 2021 and a 17% increase in the capital raised.

Read the full article in Portuguese

Translation: Richard D K Turner

Dwellings Submitted for Licensing in Lisbon and Porto Fell by More Than 30% in 2021

Compared to 2020, Lisbon and Porto reported a slowdown in residential development in 2021. Dwellings submitted for licensing decreased by more than 30% in both cities.

February 10, 2022 – Ana Custódio

The level of activity also slowed down in Portugal as a whole in 2021, with 16,300 new housing projects submitted for licensing for a total of 37,500 homes.

Compared to 2020, Lisbon and Porto reported a slowdown in residential development in 2021. Dwellings submitted for licensing decreased by more than 30% in both cities.

The data was published by Confidencial Imobiliário in its Real Estate Pipeline, based on energy pre-certificates issued by ADENE. The data show that 210 new residential projects in Lisbon were submitted for licensing in 2021, including 2,520 residences. These numbers are the equivalent of a 32% drop versus the 3,700 dwellings in the year before. The number of projects fell by 47% y-o-y after around 400 projects were submitted in 2020.

Further north, in Porto, the residential pipeline for 2021 reached approximately 255 residential projects for a total of 2,150 dwellings. The figures are equal to decreases of 46% and 36% y-o-y, respectively. In Porto, a total of 480 residential projects, including 3,350 homes, were submitted for licensing in 2020.

Activity also slowed down in the country as a whole in 2021, with 16,300 new housing projects submitted for licensing for a total of 37,500 dwellings. The year before, there were 19,955 housing projects for a total of 46,340 homes, resulting in a decrease of around 19%, both in the number of projects and residences.

Read the full article in Portuguese

Translation: Richard D K Turner

Construction Costs Rose by 6.8% in December

According to the National Statistics Institute’s New Housing Construction Cost Index (HNCI), released today, estimates are that new housing construction costs increased by 6.8% year-on-year in Decem, down 1.5 percentage points from the previous month.

February 8, 2022 – Ana Custódio

The price of materials and the cost of labour increased by 8.0% and 5.1% year-on-year, respectively.

According to the National Statistics Institute’s New Housing Construction Cost Index (HNCI), released today, estimates are that new housing construction costs increased by 6.8% year-on-year in December, down 1.5 percentage points from the previous month.

The price of materials and the cost of labour rose by 8.0% and 5.1% year-on-year, respectively. The HNCI reported an average increase of 5.7% in 2021, 3.6 percentage points higher than in 2020. Materials prices increased by 8.0% (9.4% in the previous month), while labour costs were up 5.1% (6.8% in November). According to the INE, the cost of materials contributed 4.6 percentage points to the year-on-year change in the HNCI (5.4 percentage points in November). The labour component contributed 2.2 percentage points (2.9 percentage points in the previous month).

The quarterly rate of change was -1.4% in December. Material and labour costs decreased by 0.7% and 2.3%, respectively. The materials and labour cost components contributed -0.4 percentage point and -1.0 percentage point respectively to the monthly decrease in the HNIC (0.4 percentage point and 0.9 percentage point in November, in the same order).

Annually, the HNCI was up 5.7% in 2021 (vs 2.1% in the previous year). The material and labour indices registered average annual increases of 6.2% and 5.1%, respectively (1.2% and 3.3% in 2020).

Translation: Richard D K Turner

Investment in Golden Visas in Madeira Reaches €60 Million

Between 2017 and 2021, the Madeira archipelago attracted 60 million euros through 50 gold visas. The citizens are mainly Russians and North Americans, along with Brazilians, Chinese, South Africans and Bolivians.

February 8, 2022 – Ana Custódio

Investments raised through the golden visa programme increased by 52% in Portugal in December.

The investments were mainly in the real estate sector. Between 2017 and 2021, the investment captured through the golden visa programme in Madeira totalled 60 million euros from 50 residence permits, according to an article in the Eco newspaper, based on information published by the regional government.

The regional secretary of the Economy, Rui Barreto, believes that the recent changes to the Residence Permit for Investment programme, which excluded Lisbon and Porto, are an opportunity for the Autonomous Region of Madeira.

Since 2017, the people who have acquired properties for over €500,000 in the autonomous region under the Residence Permit for Investment programme have been mostly Russians and North Americans, along with Brazilians, Chinese, South Africans and Bolivians.

Concerned with the supply of homes for locals, Mr Barreto pointed out that the Recovery and Resilience Plan (PRR) for Madeira provides 136 million euros for the construction of housing at controlled prices and support for rentals.

According to data from the Foreigners and Borders Service (SEF), investment captured through the golden visa programme increased by 52% y-o-y in Portugal as a whole in December to 42.1 million euros.

Translation: Richard D K Turner

Housing Prices Increased by More Than 10% in Half of the District Capitals in 2021

Only four cities were at this level in 2020.

February 4, 2022 – Ana Custódio

Only four cities were at this level in 2020.

The figures stem from Confidencial Imobiliário’s latest Residential Price Index. The data demonstrates that the second year of the pandemic brought an intensification in the increase of the sale prices of houses in most of the district capital cities in Portugal.

In 2021, half of the district capitals on mainland Portugal saw year-on-year increases of more than 10%. Only four cities reached that level in 2020. The analysis was based on data reported to the SIR-Residential Information System.

During that period, Faro led the ranking of annual increases in housing prices (+26.4%), followed by Setúbal (18.7%), Viseu (18.5%) and Aveiro (17.3%). In the range between 10% and 15%, besides Lisbon (+11.7%) and Porto (+10.3%), were Coimbra (13.5%), Beja (+11.8%) and Braga (+11.4%).

The remaining district capitals saw rises in 2021 of between 5% and 10%, with the sole exception of Santarém, where house prices decreased by 3.5% compared to 2020. The highest increase was around 14% (in Viana do Castelo) during that year, with Aveiro, Portalegre and Porto being the only other cities where prices increased by more than 10%.

Read the full article in Portuguese

Translation: Richard D K Turner

Housing Prices Up 12.2% in Q3 2021

Between October 2020 and September 2021, 49 municipalities in Portugal presented an average price above the rest of the country.

February 2, 2022 – Ana Custódio

Between October 2020 and September 2021, 49 municipalities in Portugal presented an average price above the rest of the country.

According to the National Statistics Institute, the average price of homes reached €1,311/m2, a year-on-year increase of 12.2% (vs +6.8% in the previous quarter) in Portugal during the third quarter of 2021.

During this period, prices rose in 8 of the 11 municipalities with over 100,000 inhabitants in the Lisbon Metropolitan Area, with growth exceeding that at the national level (+5.4%.) in Lisbon (+11.4%) and Amadora (+6.0%).

It should be noted that Lisbon was the only municipality with more than 100,000 inhabitants to see a year-on-year drop in prices during the first quarter of 2021 (-7.9%). In the second quarter, this rate increased to +1.4% and +12.8% in the period under analysis, above the average for the country (+12.2%).

In Lisbon, average housing prices reached €3,592/m2, above the figure for the first quarter of 2020 (€3,536/m2), which was the highest since the beginning of the series. Further north, in the Metropolitan Area of Porto, only the municipalities of Santa Maria da Feira (+3.6%) and Gondomar (+0.7%) saw an increase in the year-on-year rate of change, both lower than the average for Portugal.

Read the full article in Portuguese

Translation: Richard D K Turner

New Public Works Tenders Down by 21% in 2021

February 2, 2022 – Ana Custódio

The total number of public works tenders in Portugal reached 3.825 billion euros last year.

According to a report today, the Public Works Barometer, by AICCOPN (Association of Civil Construction and Public Works Industries), public works tenders executed throughout the year 2021 totalled 3.825 billion euros. The figure represents a drop of 21% compared to the previous year.

AICCOPN explained that this reduction is primarily because there was a significant number of public works tenders worth €80 million or more in 2020, related to planned investments in the railway and metro network, which totalled €1.126 billion that year.

Contracts concluded and reported in the Base Portal under public tenders in 2021 amounted to €2.713 billion, an 8% decrease y-o-y. Throughout 2021, public works contracts concluded as a result of Direct Adjustments and Prior Consultations totalled 584 million euros, up 2% year-on-year.

Read the full article in Portuguese

Translation: Richard D K Turner