JLL presented this Thursday the annual Market 360º study, at a meeting in which the results of a survey conducted by the consultancy among its clients were also disclosed, with the industry showing a feeling of "moderate optimism" in relation to 2023.
The results of this survey indicate that "taking out the extraordinary effect of the Crown Portfolio, investors expect 2023 to be in line with 2022 in terms of investment volume [3,400 million]," said Maria Empis, Head of Work Dynamics at JLL. If these forecasts are confirmed, another dynamic year is expected, in line with the average of the last seven years, with a transacted volume of around 2,600 million euros, with "the number of transactions in the pipeline to date already totaling 1,800 million euros," she said.
In any case, although "most investors consider that the economic environment will tend to improve significantly from the second half of the year", and investor interest in Portugal remains high, everything indicates that "2023 will be a year mainly of medium-sized transactions", as opposed to what happened in 2022, with the completion of several transactions involving large portfolios.
In addition, anticipates Maria Empis, "with the rise in interest rates and the upward revision of yields, the market will tend to reorganize itself and return to a certain "normality", being more difficult for value-add investors to complete a type of business that is traditionally led by core investors, as it happened in recent years; also because with the increase in financing costs, yields will also have to be revised upwards, "pushing" the most opportunistic investors back to other types of assets".
Meanwhile, and according to the results of the JLL survey, offices stand out as the asset class preferred by investors (45%) in 2023, with the largest slice of capital allocated to the sector, followed by hotels (27%), alternatives (13%), industrial & logistics (11%) and, finally, retail (5%).
Taking stock of 2022 and laying the tracks for 2023, in its Market 360º JLL anticipates another robust year for the Portuguese real estate market, which should maintain activity levels in line with the average of the last five years, while in the country continues to increasingly consolidate itself as an international real estate destination.
"We view 2023 with good eyes, as national real estate has already proven its capacity to withstand external shocks and adapt quickly in contexts of uncertainty. This was the case with the global financial crisis, the pandemic, the climate of war in Europe and, more recently, the economic turmoil we are experiencing with inflation and rising interest rates," said Pedro Lancastre, CEO of JLL.
