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46 // iberian.propery / 2017
dossier// ISSUE: TOP IBERIAN cities
The concern among real estate players is not centred on
attracting investment, since the industryhas already respond-
ed to that need; the current concern is ensuring that flow of
investment is reinforced and consistent. Lisbon’s real estate
must be seen as a safe haven for capital preservation, hence
having the ability to capture external savings. Therefore, the key
challenge is to channel the interest of those investors towards
long-term investments and the development of newreal estate
projects, to ensure foreign capital remains in Portugal for longer.
Currently, Lisbon competes directlywith other European cities,
either due to the favourable fiscal framework implemented
in the residential market, or the strong growth in tourism and
the office market, thanks to more attractive rates of return in
comparison with competing markets. The change of cycle,
accelerated by these favourable conditions, is accompanied
(and provoked) by the natural change in the investor profile.
We should be more aware of the growing interest among
long-term investors that are targeting Lisbon, focusing on
market segments that until recentlywere not on the invest-
ment radar: residential projects aimed for local residents or
newoffice buildings without a pre-defined tenant. For that to
happen, it is fundamental that public and private policies be
put in place in order to ensure that investors have a stable
risk perception and high levels of confidence in the market,
two critical factors for this new wave of investors.
Regardless of how frequently we review context costs (le-
gal, fiscal, processes, licensing procedures, environmental,
inter alia) in order to become a more competitive market in
comparison with other cities, we should consider stability
the main condition.
Jorge Marrão
Deloitte
Portugal
Partner |Real
Estate Leader
The lack of new product aimed for the middle class seg-
ment is the major challenge currently facing the Lisbon
property market.
Lisbon is hot and not only because of the season’s high
temperatures.
Thecity isbuzzingwith tourists, festivities, newrestaurants, urban
renovations with new squares for the population to gather and
investors who emerge each week seeking good real estate
opportunities, but almost always in the usual places! – Central
axis,Marquês –Baixa–Chiado–Santos andParquedasNações.
Prices here are already high since these transactions aremost-
ly re-sales and completed regeneration projects although, in
comparisonwith some central zones of othermajor Europeans
cities, they are still relatively competitive. Nonetheless, the
future returns that may be obtained will certainly be lower
than looking
“outside the box”
or building from scratch.
Therefore one of the greatest challenges our city faces is
finding a way to attract investors to less central zones like
Lumiar, Benfica, or Alcântara, so that theymay acquire land
at very attractive prices and develop projects targeting mid-
dle markets, rental or senior citizens. Since there is a lack of
new affordable products in these segments, this is where
the opportunity lies to obtain better returns in the future.
In order to accomplish this, a more efficient and comprehen-
sive transport policymust be developed to reduce distances,
since the current policy is inadequate and irregular.
A local fiscal policy for each zone may also be a solution to
drive targeted investment. If the central government applies
it, why not let the local authorities do so as well?
Managing tourismflows and the relationshipwith local lodging
/ long-term rental will undoubtedly be another challenge for
Lisbon and an optionwhere fiscal instruments can be applied.
Finally, the Lisbon Municipal Council should continue to re-
spond, as it has been doing, to themany requests for informa-
tion and project analysis that have been flooding their services
in recent years. Failure to adapt and adjust to a different reality
maydeter new investors if theyperceive theywillmiss the op-
portunity to begin construction in a market that is cyclical and
extremely exposed to international variations, which is true in
the propertymarket and ours in particular since it is peripheral.
José Araújo
Millennium bcp
Director of
Real Estate