Investors compete for Portuguese retail shares

Portugal continues to stand out in the European investment map in real estate, being “one of the countries which has registered the most interest in the shopping centre sector,” say Cushman & Wakefield. However, the relative scarcity of available product has limited the conclusion of further deals in national territory, with the volume of capital invested in the sector in the first semester of 2016 remaining at 50% below those registered in the previous term.

Adding to the accounts of Cushman & Wakefield, in the first half of 2016, Portuguese retail assets attracted 430 million euros of investment, “a substantial amount, but almost 50% below the amount made in 2015, which approximated 1.000 million euros”, the consultancy analysis relates.

Such scarcity of product, linked to intense demand, is leading to a “new valorisation of national shopping centres”, whose yields are currently 5,25%, with a tendency to fall until the end of the year, so state these specialists.

“With reference to investment activity, the year 2017 has every possibility of reaching a record level for the attraction of capital into the retail sector. Confirming these expectations, yields could reach a record minimum, passing the 5% barrier, with Portuguese shopping centres reaching their highest value of all time”, Marta Esteves Costa, partner and Iberian Director of the research and consultancy Cushman & Wakefield, anticipates.


Growth of the national supply not in line with the European tendency

It should be noted that Portugal has not followed the tendency for strong growth in supply felt at the European level in the last couple of years, as Cushman & Wakefield demonstrate in their last European Shopping Centre Development. In spite of confirming a slight uptake in the national market since 2014, the pace of new openings continues at historically low levels, which can also be explained by the maturity of the sector.

In the first trimester of this year Caixa Geral de Depósitos inaugurated the Nova Arcada shopping centre in Braga, with a total area of 68.500 m², being the only complex with its opening scheduled for this year.  For 2017, the inauguration of the future largest commercial centre in the Algarve is expected:  Mar Shopping Algarve, promoted by Inter Ikea and which will have a total GLA of 83.000 m², consisting of a shopping centre (66.000 m²) anchored by an Ikea store and a shopping outlet. But the end of next year will also see the opening of Évora Shopping, owned by Evret, which will be the first shopping centre in the Alentejo region, with a GLA of 16.000 m².

For Marta Esteves Costa, “future prospects for the sector in Portugal are very exciting; at the level of supply, market potential will allow new opportunities in projects essentially small in nature, with a profile of proximity. In the case of existing centres, a growth in investment by owners for improving their centres is expected, with them being increasingly more ready to invest, adapting thereby to the new demands of consumers.