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Logistic "will come out of this crisis reinforced"
07 May 2020 | Ana Tavares

The industrial and logistic segment may be «one of the big winners to come out of this crisis» in Portugal. This is what João Cristina, in charge of Merlin Properties in Portugal, predicts.

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Speaking to Vida Imobiliária within the segment Conversas Diárias – Especial Covid-19 (Daily Talks - Special Covid-19), João Cristina remarked that this will be one of the strongest segments, «especially because e-commerce will place an enormous weight on the distribution channels, and more space will be needed from logistic operators». And he guaranteed that «that is already being felt».

The office segment comes next as one of the least impacted segments, especially due to the lack of offer which should remain: «there was already a chronic lack of offices in Lisbon, and several projects on the pipeline which won’t see the light of day with this crisis and it is expected for the lack of offer to last for some time». But he highlighted «some challenges which will arise from working from home».

It will depend on how long this pandemic will last, especially in terms of ways of working, and how long it will take until a new treatment or vaccine for Covid-19 is discovered. If it takes a long time, «it is natural for the virus to have a big impact on people’s habits», believes João Cristina. «Consumer’s habits, with a direct impact in commerce and working habits. Instead of having a ratio of 8 or 10 sqm per person, we will have less. Companies will occupy less space, and on the other hand, people will still need to occupy that space, even if more distanced from each other».

But he believes that the trend will not be general, because «we love to socialise. Remote work is a short-term solution, I don’t think that trend will become a reality in the future».

Merlin will pay attention to opportunities

Admitting the appearance of new business opportunities, Merlin assumed it will be paying attention to the market. «We will pay attention to investment opportunities and opportunities to acquire some asset which might generate added value to our portfolio in Portugal», highlighted João Cristina, especially within logistic.

«During the last quarter, our investment policy decelerated considerably, because we thought the prices were already somewhat overheated. We weren’t actively looking for new operations, and as such, we didn’t have to abandon our plans». But, with the possibility of some prices decreasing during the crisis, the REIT will be paying attention.

Merlin’s rental activity «proceeds in a relatively normal fashion. There are fears, but we don’t feel any stoppage from our clients, both in terms of renewing contracts or taking over new spaces», attested by João Cristina.