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2017 / iberian.propery // 53
ISSUE: TOP IBERIAN cities //dossier
Paula Sequeira
Aguirre
Newman
Portugal
Head of Investment
– Capital Markets
Luís Rocha
Antunes
Cushman &
Wakefield
Portugal
Head of Capital
Markets
Fernando Ferreira
JLL Portugal
Head of Capital
Markets
Yes, with some caution and rigour, like in
all markets we invest in.
On the positive side, Lisbon is experiencing
a new economic and demographical dy-
namic, which creates real value, and there
is great drive in demand in residential, retail,
tourism and services.
However, we must proceed with caution
because the demand for investment pro-
jects is inflating prices, in some cases be-
yond reason.
Yes and for several reasons. 1) The city is now
the main tourism destination for both many
Europeans andnon-Europeans; 2)An increasing
number of companies are targeting Lisbon to
set up their offices in Portugal, especially the
sharedservices sectors.Thecitypresents strong
fundamentals for attracting these companies,
including competitive rentalvalues (compared
with the coreEuropeanmarkets), skilled labour
and European legislation. 3) More and more
people are choosing Lisbon to live, study and
work; 4)Thecity is undergoinga strong renewal
movement and there is still great potential.
Definitely! For several reasons: sustained
growth of the Portuguese economy, and
this trajectory is expected to maintain for
the next two years; real estate yields that
are above those in other Western Euro-
pean countries and capital markets; the
current framework of tax incentives (in-
cluding those for urban regeneration) and
political stability (Portugal is the 3rd most
peaceful country in theworld, Global Peace
Index 2017).
That is a very broad, and somewhat dan-
gerous, question. I believe that the strong
demand we are witnessing and the lack of
quality product in every sector has already
made prices rise substantially, thereforewe
should exercise caution. Within each build-
ing, we must separate shops or apartments
that have a peak market value and others
that may only be worth half.
Yes, both through yield compression and
rental growth. In the first case, although yields
have been strongly compressing for the past
three years, Lisbon still has a 150 to 200
bp gap when compared to other European
capitals. As for rental growth, occupier mar-
kets are very buoyant and the lack of quality
supply is pushing rents upwards.
Yes. On both counts. The rise in rents will
be driven by an improvement in economic
conditions on the one hand, and on the
other, by a lack of product, namely of of-
fice buildings in Parque das Nações. Yield
compression will also be driven by this
shortage, namely of core income assets
and assets for development / regeneration.
Lengthy processes that often deter inves-
tors, heavy taxation not only on the assets
themselves but on the contingencies they
create – the VAT tax regime is completely
absurd! - and legislation that is adverse to
some issues, of which the recent amend-
ment to the New Urban Lease Regime is
a sad example.
Currentlywe identify three main challenges.
1) The lack of core product; 2) Secondary
products showing unsuitable prices; 3) Fi-
nancing conditions that are not in line with
buyers’ needs.
The lack of product.