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RETURN FROM PORTUGUESE REAL ESTATE SHOULD STAY IN TWO DIGITS

Specialists calculate that the total return from real estate in Portugal should remain in two digits in 2017, around 10%, a slight decrease from the 12.2% achieved in 2016, according to the most recent IPD Portugal Annual Property Index.

At least this is the opinion of specialists like Alexandre Fernandes, Director of Asset Management at Sonae Sierra, for whom, “Congratulations to real estate for being increasingly chosen by investors as the class of assets for investment!” But he considers that, ”These yields are exceptional, these levels will not be maintained and direct return will lower to more sustainable levels.” Meanwhile, “There will clearly be several opportunities as a consequence of this wave of capital which has flooded the markets.” He believes that next year this index will round off at 10%.

The director spoke of a round table for discussion ,moderated by Francisco Horta e Costa, General Director of CBRE, which took place during the official presentation of the index last Wednesday, at the Altis Grand Hotel, with Nuno Ravara, Managing Director of Finsolutia also being present.  He believes that, “We should be moderately optimistic, because the main component of growth is the increase in asset value, as Portugal is a very small country,with a backdrop of low interest rates and much available liquidity,” which equals, “a rather tenuous economic growth.” For this reason, “If we keep the index at 10%, we will be most satisfied.” 

Pedro Coelho, Managing Director of Square AM, already recalls that, “It is important to decode the contents of the index. the behaviour of the real estate sector represents a god deal, and, in practice, if verified, there has been hardly any new construction in recent years, and this will begin now.” He believes that, a year from now, “There will be a drop,” in the index, as , “It is difficult to have such a thriving performance. I would say 10.1%.”