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Covid-19: investors delay processes, but do not lose interest
23 March 2020 | Ana Tavares

Real estate investors are feeling apprehensive with the Covid-19 and the exceptional situation it has created. But they did not lose interest in the Portuguese market, guarantees Francisco Horta e Costa.

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CBRE’s Managing Director for Portugal explained to VI, within the new section "Especial Covid-19 – Conversas diárias" (Special Covid-19 – Daily Talks), that «deals which were at an advanced stage of negotiation continue to be negotiated. 99% of the processes we are working on, continue, with the exception of a case where the national investor decided to withdraw from the process».

But it is a fact that investors «ask us for more time, since, from a practical point of view, it is harder to advance with the processes. Those processes which were already ongoing will take longer, we do not know how long, because the situation is still somewhat uncertain».

Francisco Horta e Costa believes this crisis «is more of a 9/11 than a 2008 crisis. Even if this crisis leaves marks, and it will leave deep marks in the short-term, they will not last as long as those left by the crisis we faced during the last decade». The Managing Director is confident that «there is a lot of willingness to go back to normality, liquidity is still very much present, investors keep asking us to show them investment opportunities in Portugal (…) The assets remain on the investors’ minds, but it is hard to imagine the conclusion of that type of transactions at this moment».

Hotels and retail might suffer the most

«We know some segments will suffer more than others on the short-term, namely hotels and retail», said Francisco Horta e Costa, because «2020 is compromised with the cancellations in hotel stays».

On the other hand, «the more resilient segments continue to be offices, all "living" (housing rental, senior living), which continue to be under the investors’ radar at this stage».

Confident that «the rental market will bounce back in a professional way», Francisco Horta e Costa also noted that «it is natural that with the slowdown of housing sales, many owners choose rental as an alternative».

A «much stronger» return to the market

Despite the crisis «the market’s fundamentals did not disappear», and Francisco Horta believes that «when we get through this, we may come back to a market much stronger than the one we had before, provided all the collateral damage the crisis will cause to some segments is safeguarded».

This because «all liquidity must be invested. It will be preferable to invest in a building that generates rents even without seeing it than to have the money unused and have negative returns».

He is also convinced that «the key for this crisis is the capacity to hold, for example to hold and not sell now with any discount», but «we are not yet seeing that happening in Portugal».