This is one of the conclusions of the «Spring Market Study» from Savills, presented this week in Lisbon. Alexandra Gomes, from the consultant’s Research Department, explains that «international investors who want to diversify their portfolios keep looking towards Portugal. They bet in secondary cities and in smaller markets, in acquiring terrains to build alternative segments or in NPL portfolios».
And, if the economy keeps showing good signs, it is expected that the international demand and the market dynamics will remain positive. Commercial real estate investment may reach 2.500 million euro this year, according to conservative estimates from Savills, at a time when Spanish and British investment dominated the year’s first quarter (36% and 29%, respectively).
Offices will remain a good option for investment, in a market with a high lack of new good quality product, which never had such a low vacancy rate, currently at 5.96% in Lisbon. Besides that, the capital is «a new business hub» and is demanded by more and more companies. Retail remains dynamic, especially street retail and logistics keeps offering a 6% yield, in contrast with the rest of Europe.
The housing market shows a slower price increase. The high-end segment should maintain the demand, and there are new products coming up for other segments. In tourism, the interest from several international chains remains and there are 109 new hotels on the pipeline for the next few years.
A change in property for use
According to Paulo Silva, Head of Country for Savills Portugal, the real estate market (and other sectors) currently sees a «big change in property for use», a new need which is increasingly impacting the sector.
The change is impacting all real estate segments, based on minimalism, mobility, experiences, connectivity and the concepts of «software as a service» and «space as a service». Within this context, alternative investment segments gain ground. Outside Portugal they are increasingly less alternative, and domestically the investors’ appetite grows, especially for student residences, but also for serviced apartments, coworking, senior residences, «built to rent» solutions, self-storage and coliving. But there aren’t many projects of this type on the field yet, especially in coliving, which still lacks specific licensing.
Within the office segment in particular, Savills believes that we are a seeing a «new process», in which owners care more and more about the companies and not just about the amounts and the companies care more about the people and not just about productivity. Well-being and quality of living are already seen as essential for the organizations’ good performance and this is a trend which will keep affecting the market, according to Rodrigo Canas, from the Offices Department at Savills, who believes that «we are living in a very interesting moment to invest and to be in Portugal».