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54 // iberian.propery / 2017
dossier// ISSUE: TOP IBERIAN cities
Tim Seconde
Retail
Partners
Europe
Head of Capital
Markets
Miguel Bacalhau
The K Advisors
MRICS, Head of
Valuation
Miguel Paiva
Couceiro
Deloitte
Portugal
Manager Real
Estate
Due to the current imbalance between de-
mand and supply, namely in the residential
and office markets, Lisbon is currently a very
interesting real estate market with diverse
opportunities for various investor profiles,
from developers to yield investors.
Yes, absolutely. Portugal is currently enjoying
political and economic stability, as well as
implementing numerous incentives, which
creates a climate that is conducive to in-
vestment.
There are good investment opportunities in
Lisbon in several segments, among which I
highlight tourism and offices.
Quite a wide question! Depends on your
risk profile and sector but, as a property
investment location across most sectors,
Lisbon still benchmarks well against other
European capitals in terms of sustainable
/ improving rents and potentially attractive
returns. The Lisbon office market in particu-
lar, is showing solid growth. The principal
economic indicators are currently positive.
An increase in rents may occur due to the
insufficiency of Grade “A” office spaces
and new real estate projects; on the other
hand, the favourable evolution of the Por-
tuguese economic scenario has attracted
new players with a long-term view and a
more conservative expectation on return
on investment. These two factors result
in an increase in the market value of real
estate assets.
Over recent years, office take-up has been
limited by a lack of available spaces. To-
day, the vacancy rate is already below 10%,
and there are some areas, like Parque das
Nações, where it has reached 3%. This is a
new reality in this market, where some zones
have reached structural vacancy. The trend
in upcoming years will be for a sustained
rise in rents, along with yield stabilisation in
central zones.
Subject to the stability of macro-economic
forces, the Portuguese market is likely to
continue at the same pace for the com-
ing 12 months. Yields may tighten further
for core product in some sectors and the
office sector in Lisbon will enjoy the most
rental growth.
A professional investor knows that all mar-
kets have their singularities; this comes
with the job. The obstacles in Lisbon aren’t
greater than those in other locations and,
although they may be different in some
regards, they are identifiable and address-
able if there is a profound knowledge of
the local market.
One of the less positive aspects of our sit-
uation is uncertainty regarding the lengthy
decision-making process, both in terms of
licensing entities and courts. Furthermore,
the country has been slow to introduce new
investment vehicles that are more fiscally
attractive, such as SOCIMIS in Spain and
REITs in other European countries.
The main hurdles are the same as ever
for those who know they wish to enter the
Portuguese market. The transfer tax (IMT)
is still higher compared to other geogra-
phies (in particular Spain). The Portuguese
propertymarket would benefit substantially
from the introduction of a local equivalent
of the Spanish Socimi (SIPIs).