Portugal Real Estate Market Report - Savills
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Portugal Real Estate
Market Report
1st Semester 2019
Portugal Real Estate Market Report
Economy
In 2019, the increase in private The gradual decline in the unemployment
Throughout the year 2019, consumption will be linked to the favorable rate, which by 2020 is estimated to reach 5.7%,
Portugal will maintain its evolution of disposable income of households, together with a low population growth, will
expansion trajectory, albeit justified by the favorable evolution of have a decisive influence on the productivity
employment and nominal wages. levels achieved, which are fundamental to
to a lower rhyme compared In May 2019, the unemployment rate maintaining the competitiveness of the
to the last years stood at 6.6%. Portuguese economy.
It should be noted that the Portuguese
At the beginning of 2019, the Portuguese economy, despite successfully passing through
economy experienced a slight acceleration in a period of recession and now enjoying a more
its expansion trajectory, registering a growth of favorable international context, continues
0.5% in the first quarter of 2019. to present some structural challenges that
The projections advanced by the Bank of influence its growth potential.
Portugal foresee a real GDP growth of 1.7%
in 2019, with the evolution of Portuguese
economic activity based on the growth of Macroeconomic 2019 2020 2021
2018
private consumption, the dynamism of Gross projections (f) (f) (f)
Fixed Capital Formation and the increase in
GDP 2.1% 1.7% 1.6% 1.6%
exports, despite the downward revision of
external demand. Inflation 1.2% 0.9% 1.2% 1.3%
Also, financing conditions should remain
favorable for all sectors of the economy Private Consumption 2.5% 2.6% 2.0% 1.7%
and external demand should grow on average Public Consumption 0.8% 0.5% 0.5% 0.5%
below 3%.
Exports 3.6% 4.5% 3.1% 3.4%
Imports 4.9% 8.0% 4.3% 4.4%
Employment 2.3% 1.3% 0.8% 0.4%
Unemployment rate 7.0% 6.3% 5.7% 5.3%
(f) forecast Source Bank of Portugal
Unemployment Rate
20
18
17.3
16
17
17
16.2
16
15.4
15.4
14
14.8
14.4
13.6
13.5
13.4
12
12.4
12.3
12.3
12.1
10
11.3
%
10.9
10.5
9.8
8
9.2
8.8
8.1
7.6
6
7.1
7
6.7
6.6
6.5
4
2
0
May 2012
August 2012
November 2012
February 2013
May 2013
August 2013
November 2013
February 2014
May 2014
August 2014
November 2014
February 2015
May 2015
August 2015
November 2015
February 2016
May 2016
August 2016
November 2016
February 2017
May 2017
August 2017
November 2017
February 2018
May 2018
August 2018
November 2018
February 2019
May 2019
* (Seasonally adjusted -%) of the active population aged 15-74 years by age group; Monthly Source INE
3
Portugal Real Estate Market Report Portugal Real Estate Market Report
Vacancy rate by market zone
25.00%
Prime Zone CBD Zone Emerging Office Zone
Secondary Zone Parque das Nações
Western Corridor
20.00%
Offices 15.00%
12.08%
10.00%
At the end of the first half of 2019, the Lisbon
Vacancy Rate
A12 office market totaled 110,100 sq.m of take-up, Lisbon Office Market
VASCO corresponding to 97 operations. This result,
CRIL
PARQUE DA GAMA 5.00%
DAS BRIDGE which represents an increase of 27% compared 3.27%
NAÇÕES
to the first half of 2018, allows us to foresee a 3.83%
IC16
IP7 more exciting year-end compared to forecasts 1.41%
AIRPORT 0.00% 0.35%
GARE DO drawn at the beginning of the year, which
ORIENTE
should exceed 170,000 sq.m, but should not 1º half 2015 1º half 2016 1º half 2017 1º half 2018 1º half 2019
2ª CIRCULAR
surpass the 200,000 sq.m. mark.
24% of the operations registered in the first 5.23% Source Savills Research
BENFICA six months of the year concerned areas above
CHELAS
1,000 sq.m, mostly centered on the Parque
ENTRECAMPOS das Nações, Prime Zone and Emerging Office
STATION
IC19 Zone areas.
SETE RIOS
STATION It should be noted that the Parque das Best performing Activity Sectors
Nações zone and the Prime Zone were the best Although the vacancy rate is currently below
MONSANTO
L
N117 performing market zones with 26,840 sq.m and 6%, the market shows that it will be able to
-SU
TE
CAMPOLIDE
24,937 sq.m respectively. It is important to note stay above the average take-up of the last five
OR
A5
ON
WESTERN
CORRIDOR that for the performance balance of the Parque years (158,000 sq.m).
EIX
AMOREIRAS das Nações area, the purchase of a 17,400 sq.m The Secondary Zone, which comprises
ESTRELA
SANTA
Prime CBD turnkey office project by the AGEAS Portugal the riverside and historical area of Lisbon,
APOLÓNIA
BAIXA STATION Group accounted for 65% of the total. GLA delimited by the Av. Infante Santo and Av. 24
CRIL CHIADO CBD
CAIS DO SODRÉ
occupied in this market area. de Julho axes, as well as the Parque das Nações Business Consultants Financial
A2
RESTELO CAIS DO STATION Emerging Office Zone In the Prime Zone, the market had the area, are the areas with a practically zero Services: and Lawyers: Services:
ALCÂNTARA SODRÉ
28,259 24,664 24,606
Secondary Office Zone leasing operations of the newly built Torre vacancy rate, resulting from the lack of entry of
"Parque das Nações" da Cidade located at Fontes Pereira de Melo new speculative projects.
BELÉM TOWER Avenue 41, by the multinational consultant During the first half of 2019, 48 operations sq.m sq.m sq.m
25 DE ABRIL
Western Corridor
BRIDGE KPMG (9,950 sq.m) and the Law Firm PLMJ were due to relocations, accounting for a total of
Zone 7
(8,306 sq.m) that occupied all the office space 72,659 sq.m, and another 31 operations related
in this emblematic project. to area expansion decisions, totaling 27,157 sq.m.
By the end of the year 2019, approximately
22,000 sq.m should be completed spread over
5 office building projects located in the Prime,
Market Zone Take-Up 5 Years Evolution CBD and Western Corridor Zones. Pipeline 2019 – 2021
40 Between 2020-2021 will reach approximately 120,000
1st Semester 2015 1st Semester 2016 1st Semester 2017
153,000 sq.m heavily concentrated in the
106,170
Parque das Nações area, marked by innovation
1st Semester 2018 1st Semester 2019 MARKET TOTAL
26,840
and modernity that will contribute to underline 100,000
1ST SEMESTER 2018
24,937
the technological nature of this market area,
86,819
23,229
22,185
sq.m. (thousands)
such as the EXEO and K-Tower projects.
21,338
80,000
sq.m. Regarding office lease prices and forecasts
18,785
18,753
17,616
for the next 6 months, prime rent closed the
16,032
15,926
15,398
sq.m.
14,840
15,610
14,855
20
13,808
14,285
semester at € 22 / sq.m / month, with relative 60,000
13,682
12,834
12,577
MARKET TOTAL price stability observing.
9,867
1ST SEMESTER 2019
8,766
8,765
Until the end of 2019, rents are expected to
40,000
110,069
7,163
remain stable, but there is room for general
5,692
31,300
4,498
4,462
4,246
4,275
4,148
market increases of around 5%, justified by
2,446
2,309
2,436
21,920
1,734
sq.m. the vacancy rates at minimum values and high 20,000
demand. This upward pressure will be justified
0
0
0 not only by the lack of available space, but also
0
Prime CBD Emerging Secondary Parque Western Other by the entry of new planned projects that will
Zone Zone Office Zone Zone das Nações Corridor zones raise the price range. 2019 2020 2021
Source Savills Research Source Savills Research
4 5
Portugal Real Estate Market Report Portugal Real Estate Market Report
Oporto Offices
Market
Prime rents by market zone In the first half of 2019, Oporto office A28
A41
€25.00 market accounted for a total of 22,552 sq.m of FRANCISCO SÁ CARNEIRO
2017 2018 Q1 2019 Q2 2019
take-up, which represents a sharp decrease of INTERNATIONAL AIRPORT
N107
N107
45% over the same period of 2018.
€22.00
€22.00
The ZEP zone concentrated the largest N13
€20.00
€21.00
€20.50
contracted GLA in a total of 8,550 sq.m and PERAFITA
MAIA
was elected by a renowned financial services
€18.00
€18.00
€18.00
€18.00
€18.00
A3
€17.00
€17.00
€17.00
€17.00
€/sq.m/month
company to implement its new premises in the
€15.00
€16.00
€16.00
€16.00
€16.00
€16.00
€15.47
Greater Porto market, totaling 4,000 sq.m.
€14.50
€14.50
MAR
€14.00
SHOPPING
In total, Oporto office market registered
€13.50
€13.50
A4
a total of 28 operations, of which 53% was A4
€10.00
directed to operations below 300 sq.m. EXPONOR
VIA
Oporto continues to assert itself as a city A28 NORTE N105
of business destination, integrating the list of
€5.00
preferred locations of multinationals wishing VIA
RÁPIDA
to expand their activity in Portugal. PORTO DE LEIXÕES
CRUISE TERMINAL
NORTE CIRCUNVALAÇÃO
CIRCUNVALAÇÃO
ROAD ASPRELA
SHOPPING ROAD
Given the demand that the market has MATOSINHOS
€0.00 ZEP
registered, the promotion of new office VCI A20 N12
Prime Zone CBD Zone Emerging Office Zone Secondary Zone Parque das Nações Western Corridor building projects is today a reality that CITY'S
PARK PINHEIRO
promises not to slow down and is urgently MANSO
Source Savills Research
needed to maintain the attractiveness and Boavista – Prime CBD
AVIZ
INTERFACE CASA
CONSTITUIÇÃO
DA MÚSICA
competitiveness of Oporto compared to other BOAVISTA
ANTAS
CAMPANHÃ
Downtown Area
Trends:
DOWNTOWN
European capitals. A1 RIBEIRA
CAMPO 24 DE CAMPANHÃ
For the next years it is foreseen the Eastern Zone MARG AGOSTO BUS INTERMODAL TERMINAL
INAL ARRÁBIDA TERMINAL
PAVILHÃO
Main projects under development ■■ The second half of the year will continue to development of more than 150,000 sq.m. At the ZEP BRIDGE ROSA MOTA S. BENTO
STATION
be marked by the renegotiation of rents as end of the first half of 2019, the Urbo Business Matosinhos LUÍS I BRIDGE FREIXO
N209
BRIDGE
well as the commitment by some owners Center buildings (16,100 sq.m), the Boavista
Maia
HUB Criativo do Beato EXEO – Stage 1 to remodeling more outdated and obsolete Office Center (8,000 sq.m) and the Sonae GAIA
Vila Nova de Gaia
› Others Zones › Parque das Nações spaces, taking advantage of the high demand; Headquarters building integrated into the 7,000 DEVESAS A44 N108
STATION
› Estimated date of completion: 2020 › Estimated date of completion: 2021 sq.m Maia Business Center were completed.
› GLA: 11,000 sq.m › GLA: 30,000 sq.m ■■ This year will be distinguished by the By the end of the year, the 31,000 sq.m
rethinking of occupancy strategies and the Porto Office Park (POP) project and the
analysis of the new offer that will start to 16,800 sq.m Palácio dos Correios project for
MONUMENTAL 3rd COLOMBO’S TOWER enter the market in the next two years; offices are expected to be completed. Take-up distribution by market zone
› CBD Zone › Emerging Zone
› Estimated date of completion: 2020 › Estimated date of completion: 2021 ■■ Increased demand for coworking spaces as a
result of the growing number of startups, but 7%
› GLA: 18,000 sq.m › GLA: 30,000 sq.m Downtown 3%
also an increase in new forms of organization Eastern Zone
1%
and workplace experience that foster a Maia 28%
growing sense of sharing and community; Boavista - Prime CBD
■■ Companies' growing commitment to
23%
improving their office space as an essential Matosinhos
and integral tool for their talent attraction
and retention strategies.
38%
ZEP
Source Savills Research
6 7
Portugal Real Estate Market Report Portugal Real Estate Market Report
Retail
Rents in the Oporto office market continue Market Zones Rent/sq.m/month The Portuguese retail market continued we also have the restaurants Meat Me, Up to
their upward trend justified by the high to show strong dynamics demonstrating The Food & Beverages sector Sushi, Stanislav Café, 100 Ways, Sa Morais
Boavista - Prime CBD 18.00€
demand, the improvement in the quality of the maintenance of good performance has been the main driver of Sushi and Therapist.
Downtown’s Zone 17.00€
new projects promoted but also by the lack in the sector. the high street retail in Lisbon Every corner of the city of Lisbon receives
of current supply available in the face of high Eastern Zone 13.00€ In terms of the evolution of economic increasingly diverse concepts that bring life
demand dynamism. indicators, the CPI registered in June 2019, The Food & Beverages sector accounted for to a totally cosmopolitan, modern and open
ZEP 14.00€
a year-on-year change of 0.4% and identical 79% of new openings, followed by the Fashion to the world, trying to keep its historical and
Matosinhos 14.00€ to the previous month. The underlying sector with 8%. cultural character intact.
Maia 13.00€ inflation indicator (total index excluding In the Food & Beverages sector, we highlight In the face of rising demand, the available
unprocessed food and energy) increased the opening of JNcQuoi Asia restaurant at supply remains scarce and continues to put
Vila Nova de Gaia 13.00€
by 0.6% year-on-year, representing a 0.1% Avenida da Liberdade nº 144, in an area of 900 pressure on the income values practiced. Since
increase over May. sq.m and with a concept focused on Asian cuisine. the beginning of the year 2019, the prime rent
Source Savills Research
The national retail market remains quite Also noteworthy is the opening of the applied to the Chiado area has risen by 14% to
dynamic due to the high street retail, with a project King of China and Chef Avillez’s House stand at the end of the second quarter of 2019
very significant expression in the central axes of Delights in Chiado. Among other openings, at 160 € / sq.m / month.
of the city of Lisbon. In the first six months
of the year, Savills accounted for a sample of
150 new stores in the heart of Lisbon, with Consumer price and underlying inflation indices
the highest concentration in the parishes of 1.6
Misericórdia, Avenidas Novas, Santo António CPI (Year on Year Rate) CPI (Rate Variation of the last 12 months)
and Campo de Ourique. 1.4 Underlying inflation indicator
1.2
Throughout 2019,
Portuguese consumers have 1
been more confident about 0.8
%
their economic situation,
0.6
paving the way for changes
in their consumption 0.4
patterns and also allowing
0.2
them to be more willing
to spend on products and 0
activities that bring benefits, Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez Jan Fev Mar Abr Mai Jun
2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019
that promote happiness.
Source INE
8 9
Portugal Real Estate Market Report Portugal Real Estate Market Report
Out with the old…
In with the new!
Also in the city of Oporto, the high street High Street, and as we have been witnessing
There are also growing retail maintains its expansion trajectory and in Lisbon, has been growing significantly and in
openings of convenience- affirmation of successful format. In the first parallel with an increase in the flow of tourists
framed formats that are six years of 2019, there were several brands visiting the city of Porto.
that opened stores, of which we can highlight
totally targeted at city the Spanish brand Hawkers that opened a
consumers who know the store in Santa Catarina Street and Elements
products they like very well Contemporary Jewelery in Rua das Flores.
Greater Oporto will also be the address
and who don’t like to waste
chosen for the opening of the first Primark
a lot of time. Fast product XXL store that will be located in Norte
experience and access is Shopping, resulting from the expansion of Stock shopping
centers:
the key to success for these this shopping centre. The new store will
types of formats. considerably increase the space already
occupied by Primark to about 6,300 sq.m.
3.7
million sq.m
Greater Lisbon
Offer:
1.1
million sq.m
Market Values
After decades of successful openings, phase, resulting not only from changes in
Great Porto
the shopping center market in Portugal is consumer profile, for sustainability and Offer:
now undergoing a period of renewal of its energy efficiency reasons, but above all.
shopping center stock.
In the first six months of 2019 we had
driven by the digital world.
The rapid access to all the information
584
thousand sq.m
Prime Rents Evolution the Alameda Shop & Spot requalification launched by different brands in different
180 and the start of the expansion of Glicínias purchase channels, with special relevance to
High Street – Lisbon High Street – Oporto
Plaza located in Aveiro and scheduled for the digital channel, now poses a real challenge
160 Shopping Centers
completion in the year 2021. for physical commercial spaces.
160 Also noteworthy was the opening of
140 Montijo Retail Park, which added 18,000 sq.m
120 140
to the existing commercial offer on the south Making the shopping experience
120 110
unique, complete and differentiating
€/sq.m./month
100 bank of the Tagus.
100 Currently, and with no plans to open now motivates investors and
100 100 100 new shopping centers in Portugal, the focus
80 85
95
remains on the requalification, expansion and
developers to expand and renovate
modernization of a set of shopping centers, their shopping centers.
60 70 70
such as Norte Shopping, Colombo Shopping
40 50 50 Center, Oeiras Park and Vila do Conde Porto
40 Fashion Outlet.
20 A very successful format for Portuguese
consumers and winners of several
0
international awards, shopping centers in
2015 2016 2017 2018 Q2 2019 Portugal are experiencing a reinvention
Source Savills Research
10 11
Portugal Real Estate Market Report Portugal Real Estate Market Report
Prime Rents Q1 2019
Bucharest €4.00
Milan - Bologna - Rome €4.33
Logistics Paris (Ile-de-France)
Prague
€4.33
€4.70
and Industrial
Lisbon €5.00
Warsow €5.35
Madrid €5.50
Vienna €6.50
The industrial and logistics sector saw the The current challenges imposed by the Munich €7.10
TORRES VEDRAS
take-up of the first half 32% lower than the requisition and immediate delivery of the The Neetherlands €7.71
AZAMBUJA
1st semester of 2018. This decrease is again A1 most varied products, driven by e-commerce,
ALENQUER Dublin €8.75
related to the common denominator of the have had a particular impact in the search
other real estate segments: lack of supply that A8 of spaces that combine the proximity to the
London €16.50
CARREGADO
meets the criteria currently demanded by centers of the cities with the infrastructures
logistics operators. that make possible and guarantee the 0 2 4 6 8 10 12 14 16 18
A10
In the case of logistics and industrial VILA FRANCA effectiveness of the cycle logistic operations. €/sq.m/month
DE XIRA
platforms, the supply of spaces with more MAFRA Therefore, it becomes increasingly
A21 Source Savills Research
than 10,000 sq.m is particularly scarce. This N10 imperative that future logistics spaces
led, especially during the second quarter, to be versatile and respond to important
price rises in the area of the Western Corridor CREL
guidelines such as sustainability, energy Prime Rents Industrial and Logistical Axes
(3.5 € / sq.m for 4 € / sq.m) and Matinha - ALVERCA efficiency, decarbonization, interconnection €6.00
Prior Velho (4.5 € / sq.m for 5 € / sq.m). with other platforms and means of transport,
Q4 2018 Q1 2019 Q2 2019
Other secondary zones such as the LOURES N118 the ability to install state-of-the-art
€5.00
Montijo - Alcochete and Palmela - Setúbal technology, among others.
€5.00
IC16
SINTRA
axis also registered increases in rents ODIVELAS N119 In this sense, it is worth noting the
practiced, proof of the affirmation of these expected arrival in the market in 2019 of the €4.00
€/sq.m/month
IC19
€4.00
€4.00
€4.00
AMADORA AEROPORTO
zones as viable alterations and consolidated LISBOA ALCOCHETE newly infrastructed logistics platform of the
€3.75
IC30
€3.50
to the prime axis. latest generation in Castanheira do Ribatejo, €3.00
LISBOA
€3.00
CRIL
The warehouse Azambuja 2 with 38,482 A5 property of Merlin Properties with an area
CASCAIS
sq.m., the Abóboda Business Center (7,146 OEIRAS between 250,000 sq.m and 300,000 sq.m, as a
MONTIJO €2.00
sq.m) and the Aleluia Factory in Aveiro ALMADA result of an investment of 150 M€ .
BARREIRO
(5,000 sq.m) are the top 3 of the largest IC20
€1.00
transactions in the industrial and logistics MOITA
SEIXAL A12
segment in the first half of this year,
representing a concentration of 90% of the IC32 €0.00
Sacavém – Alverca
total takeup in only 3 transactions. A2
Market
Carregado Póvoa de Loures – Corredor Lisboa Montijo – Palmela –
Carregado – Azambuja
PALMELA – Azambuja Santa Iria – Vialonga Oeste (Matinha – Alcochete Setúbal
Loures – Vialonga Alverca Prior Velho)
SETÚBAL
Values
Montijo – Alcochete
Source Savills Research
Palmela – Setúbal
Alfragide – Carnaxide
Logistic and Industrial Take Up Sintra – Cascais – Oeiras
SESIMBRA
61,777 The highest rents of the logistics and
55,783 industrial segment in Portugal, achieved
in the Lisbon region, at €5, is a reflection
49,739
of the aforementioned inability to supply
46,191 Top 5 Transactions quality logistics and industrial spaces to
meet the existing demand. In turn the axis
Area
Quarter Building Location Occupier between Sacavém and Alverca continues to be
(sq.m.)
sq.m.
considered prime and the most desirable for
28,588
2 Azambuja 2 Azambuja Auchan 38,482 the installation of platforms.
Centro Empresarial
1 Abóboda Vision Box 7,146
da Abóboda
2 Aleluia Factory Aveiro Uber 5,000
1 Logispark Montijo Montijo LFP 3,700
7,152
Nunes & Guisantes
1 Warehouse Cacém Investimentos 3,668
Imobiliários LD
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Source Savills Research Source Savills Research
12 13
Portugal Real Estate Market Report Portugal Real Estate Market Report
Top Transactions
Minor Hotel
Investment
Portfolio
■■ Hotels
■■ Seller: Minor International
■■ Buyer: Invesco
During the first half of 2019, the Portuguese The retail segment accounted for the second In the office market, accounting for 23%, ■■ 312 Million €
real estate investment market showed a less largest share of investment (30%). In total 8 9 transactions were recorded, led by the
dynamic activity. Compared to the same period operations were closed, including the purchase sale of Credit Suisse's Art's Business Center
of 2018, there was a decrease of 27%. of Leiria Shopping for 128 million euros by and Fernão Magalhães Buildings to Merlin
DWS from Sierra Portugal Fund. Properties for 112 million euros. Art's Business Center
Fernão Magalhães Tower
In total 30 operations were
Offices
recorded, with a total investment Commercial Real Estate Investment Volume
■■
■■ Seller: Credit Suisse
of approximately 1,100 million euros. 900
■■ Buyer: Merlin Properties
1st Semester 2017
The hotel sector was the most active during 800 1st Semester 2018 ■■ 112 Million €
810
the semester, having recorded the largest 1st Semester 2019
700
investment operation in the sale of Portfolio
Minor International to US investment manager 600
Invesco for 312 million euros. Leiria
Millions €
The attractiveness of the hotel sector 500
Shopping
517
was also confirmed by the closing of 4 400 ■■ Retail
more operations, including the sale of the
393
393
DoubleTree by Hilton Lisbon Hotel - Fontana 300 ■■ Seller: Sierra Portugal Fund
316
Buyer: DWS
295
293
Park Lisbon to Commerz Real AG in the ■■
244
200 ■■ 128 Million €
amount of 37.5 million euros.
18
56
100
55
47
32
28
16
10
0
Offices Retail Industrial Mixed Hotels Others Klépierre
& Logistics Use Use Galleries
Source Savills Research ■■ Retail
■■ Seller: Klepierre
■■ Buyer: Square Asset Management
■■ 102 Million €
Investment by country of origin
Imogest Portfolio
■■ Offices, Logistics,
Retail Parks
■■ Seller: Imogest
■■ Buyer: M7 Real Estate
■■ 55 Million €
FIDELIDADE Building
Alexandre Herculano 53
■■ Seller: Apollo Global
Management
37% 23% 14% 13%
■■ Buyer: M&G Real Estate
■■ 46 Million €
US Germany Portugal Spain
14 15
Portugal Real Estate Market Report Portugal Real Estate Market Report
Residential
The development sector is also very active Note also the recent approval of the SIGIs Average Values of Bank Valuation
with the acquisition of projects mainly (Portuguese REITs), which proposes to Portugal was in the first 2 000€
directed to the residential and hotel segments. promote real estate investment, in particular quarter the third country in North Lisbon’s MA Algarve
An example of this was the acquisition of the lease market and to boost the growth of the the European Union where
the Block that integrates the historic Grand national real estate sector.
Hotel Central in Cais do Sodré by Patrizia After a period of compression with
house prices rose most, just 1 500€
Immobilien for 25 million euros. yield declines in all segments, prime yields behind the Czech Republic
are expected to begin a path of further and Hungary.
€/sq.m.
stabilization.
Taking into account pipeline 2019 has continued to see widespread
1 000€
transactions, year-end forecasts increases in house prices in Portugal,
point to a slight decrease from 2018, Prime Yield Evolution estimated at around 16%. In the two main
cities of the country, Lisbon and Porto, prices
with an estimated total investment 12.00
continued to rise at a more moderate pace
500€
Offices (Gross) High street (Gross)
volume of between EUR 2,500 - 3,000 compared to the 4th quarter of 2019.
Shopping Centers (Net)
million euros. 10.00
Industrial & Logistics (Gross)
Lisbon registered in the first three months
of the year a generalized increase of prices 0€
Retail Parks (Net)
Continuing to benefit from a favorable around 11% and the city of Porto saw the closed Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
8.00
economic environment and the maintenance values in the sale of houses by almost 29%. 2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019
of confidence from national and international
Source INE
players, the Portuguese real estate investment 6.00
%
market has been able to maintain its Absorption times in
attractiveness to investors now with a more the periphery approach The city of Porto had as main highlight the that “(…) grants exemption from collective
4.00
core and value-add profile. Lisbon Cedofeita Union of Parishes, Sto. Ildefonso, and individual taxes to rents of contracts
Sé, Miragaia, S. Nicolau and Vitoria, with an entered into within its scope (…) at least 20%
2.00 In the first three months of 2019, Lisbon average closing value of 2,682 € / sq.m. below a value of calculated based on various
continued to be the county of the country with factors, such as the area of housing, the median
the highest average value per sq.m, 3,561 € / price released by INE, the typology and other
0.00
sq.m, 70% above the pre-crisis period (around Savills alone in Lisbon has a specific characteristics of housing (…) ”-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2,095 € / sq.m). pipeline between 2019 and Housing Platform, for a minimum of 5 years or
Source Savills Research
At the same time that prices per sq.m have 2022 of more than 6,500 9 months in case of student housing.
been rising in all municipalities, the large All this has led promoters to consider
dispersion of absorption times in the past in
new homes that will enter betting on apartments aimed at the middle
Prime Yields – European Cities Offices CBD the cheapest municipalities has considerably the market, most of them class, tending farther from the city center, but
8.00 approached the Lisbon absorption time (six focused in medium-high and still enjoying accessibility that make the area a
months), from a range of ten months in high classes. real alternative. Take the case of Alta de Lisboa,
7.00 the first quarter of 2017, to only three / four for example, where around 500 housing units
7.00
months in Odivelas and seven in Setúbal and Examples are large projects such as LX will be built in 10 different buildings, for an
6.00
Palmela, in the first quarter of 2019. Living in Amoreiras (151 homes), Infinity investment of around 200 M €.
4.50
The trend for the rest of the year for Lisbon Tower in Campolide (195 homes) or the
4.25
4.25
5.00
4.00
4.00
4.00
and Porto is for a continuous increase in values Matinha residential project that, together
3.75
3.60
3.50
3.50
3.50
3.25
4.00 per sq.m, at a slower pace but still above 10% with Prata Riverside Village, will bring that
%
3.00
3.00
2.90
2.90
in Lisbon and 25% in Porto. new life to life. zone where the creation of
3.00
The Invicta city will also tend to have high more than 2,700 new homes is projected in
2.00 growth rates of closed values; Porto currently what will be one of the largest residential
practices the same values as Lisbon in 2007, projects in the country.
1.00 still only 60% of the average value of Lisbon, Incentives to lease will also mark the coming
falling to 2,124 € / sq.m. times, notably the affordable rent program
0.00
Berlin
Frankfurt
Hamburg
Paris
Madrid
Amsterdam
Milan
Stockholm
Brussels
Oslo
Dublin
Luxembourg
Prague
Lisbon
London
Warsaw
Athens
Source Savills Research
16 17Portugal Real Estate Market Report Portugal Real Estate Market Report
Sales Amounts and Absorption Time at Lisbon's MA Councils
4 000€ 18
Q1 2017 Q1 2018 Q1 2019 Absorption Time Q1 2017
3 500€ 16
Absorption Time Q1 2018 Absorption Time Q1 2019
14
3 000€
12
Trends Tourism
2 500€
€/sq.m.
Months
10
2 000€
8
1 500€
6
1 000€ 4 ■■ Focus on the upper-middle and upper The behavior of the various indicators of national tourism showed a very positive performance
500€ 2 classes should be dispersed to the middle between January and May 2019:
class, particularly with promotion projects in
0€ 0
areas further away from Lisbon’s city center.
Lisbon
Cascais
Oeiras
Odivelas
Loures
Amadora
Alcochete
Almada
Sesimbra
Mafra
Vila Franca
de Xira
Sintra
Seixal
Montijo
Setúbal
Palmela
Barreiro
Moita
■■ Rehabilitation projects at the center will
continue to attract investors, the future
trend resulting in a mix of rehabilitation
and promotion;
Source SIR
■■ Leasing will continue to be a strong option
Nº of Dwellings Sold for a large proportion of people, and
4 500 the affordable tenancy program should
Q1 2017 Q1 2018 Q1 2019
contribute, albeit slightly, to this trend.
4 000
■■ Co-living and serviced apartments projects
3 500 should start to have more impact in the
city of Lisbon, as a result of the mainly
3 000
foreign demand for these more complete
2 500 typologies in terms of services provided
Units
and the constant need for mobility that
+ 4.1% + 6.6% + 6.7% + 5.9%
2 000 makes these targeted housing models
unfeasible. for students, freelancers, young
1 500
professionals, among others. Overnight Stays Guests Total Income Tourism Revenues
1 000
500
0
Lisbon’s MA Oporto’s MA North Center Alentejo Algarve
Source SIR
Dwellings Licensed in New Constructions for Family Housing Overall, even though there was a slight RevPar January to May 2018 2019 Δ19/18
600 decline in occupancy per room from the 70 15.00%
Oporto's MA Lisbon’s MA Algarve
beginning of the year until the end of May
(around 0.5 pp YoY), the significant increase 60
500 in both RevPar (income per room) to € 37.70, 10.00%
as the ADR (income per room occupied) to
50
400 € 64.89, shows that tourists are increasingly
spending more in our country even if they 5.00%
40
€/sq.m.
stay here less time.
Units
300
30
0.00%
200
20
-5.00%
100 10
0 0 -10.00%
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May MA AR Total North Algarve AR Alentejo Center
2018 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 Lisbon Madeira Azores
Source SIR Source TravelBI
18 19Portugal Real Estate Market Report Portugal Real Estate Market Report
Guests by Region January to May
10 000 000 12,00%
2018 2019 Δ19/18
9 000 000
10,00%
8 000 000
8,00%
7 000 000
6,00%
6 000 000
Units
5 000 000 4,00%
4 000 000
Lisbon was the region that attracted the ADR January to May 2,00%
most tourists in the period analyzed, with 3 000 000
growth of 4.1% over the same period of 2018, 0,00%
2 000 000
followed by the Northern region and later the
90.92€
Algarve, which was the region that recorded the -2,00%
1 000 000
largest increase of guests, in a total of 9.63%.
0 -4,00%
Total MA Lisbon North Algarve Center AR Madeira Alentejo
64.89€
63.08€
61.01€
Source TravelBI
56.17€
56.16€
51.82€
45.71€
Overnights per Region 2019 January to May
8 000 000 14,00
Dormidas Δ19/18 (%) Average Stay per Night
7 000 000 12,00
10,00
6 000 000
8,00
MA Lisbon Total AR Madeira North Algarve AR Azores Center Alentejo 5 000 000
Units / %
6,00
Units
Source TravelBI
4 000 000
4,00
3 000 000
2,00
Top Guest Issuers 2019 January to May 2 000 000
0,00
Nationals (Nationals Foreigners (= 100%) 1 000 000 -2,00
+ Foreigners = 100%) 1º 2º 3º
0 -4,00
North 999 500 (49.4%) Spain – 217 300 (21.24%) France – 117 700 (11.51%) Brazil – 110 500 (10.80%) MA Lisbon Algarve North AR Madeira Center Alentejo AR Azores
Center 869 500 (62.1%) Spain – 118 400 (22.27%) Brazil – 73 500 (13.82%) France – 50 400 (9.48%) Source TravelBI
MA Lisbon 848 800 (28.5%) France – 223 900 (10.49%) Brazil – 220 700 (10.34%) Spain – 215 900 (10.12%)
Alentejo 345 500 (65.8%) Spain – 33 000 (18.42%) Brazil – 21 800 (12.17%) Germany – 18 700 (10.44%)
Room Occupancy Rate January to May
80,00% 5,00 p.p.
Algarve 405 300 (25.8%) UK – 398 200 (34.10%) Spain – 128 600 (11.01%) Germany – 125 600 (10.76%) 2019 Δ19/18
4,00 p.p.
AR Azores 140 000 (63%) Germany – 16 400 (19.95%) USA – 16 200 (19.71%) Spain – 6 800 (8.27%) 70,00%
3,00 p.p.
AR Madeira 112 500 (19.3%) Germany – 123 500 (26.31%) UK – 105 400 (22.45%) France – 59 500 (12.68%) 60,00%
2,00 p.p.
Portugal 3 721 100 (40%) UK – 738 600 (13.22%) Spain – 728 800 (13.04%) France – 570 300 (10.21%)
50,00%
1,00 p.p.
Source TravelBI
40,00% 0,00 p.p.
-1,00 p.p.
30,00%
-2,00 p.p.
20,00%
-3,00 p.p.
10,00%
-4,00 p.p.
0,00% -5,00 p.p.
MA Lisbon AR Madeira Total North Algarve AR Azores Alentejo Center
Source TravelBI
20 21Portugal Real Estate Market Report
€ 393 Million Euros
of Investment
Commercial investment in the hotel segment As regards openings, the geographical Rebranding activities have also had a
recorded the highest value of the last semesters, dispersion of the new national units should significant impact, especially in the Central
393 M € (proof of the vitality, consistency be highlighted. The opening of units such as and Algarve regions, and should continue to be
and attractiveness of the Portuguese market, Vila Galé Collection in Elvas or Verde Mar & a phenomenon throughout the country as has
especially for foreign investors), achieved Spa in Ribeira Grande (São Miguel - Azores), been the case over the last few years.
mainly through transactions in Lisbon and prove the sustainability of the sector and the
Porto. sale of the portfolio, which included ability of areas outside the major urban centers
3 major hotels in Lisbon in North American of Lisbon and Porto to attract investment. of
Invesco, with a combined value of 313 M €. internationally renowned operators.
Main Business Transactions
Hotel City Buyer Nationality Rooms Amount (M€)
Portfolio - Avani Avenida Liberdade,
Lisbon Invesco USA 704 313
Tivoli Av. Liberdade e Tivoli Oriente
DoubleTree by Hilton - Hotel Lisboa
Lisbon Commerz Real AG Germany 146 37,5
Fontana Park
Eurostars Marquês de Pombal Lisbon Swiss Life REIM France 163 23
Hotel EXE Porto Centro Oporto Privado Estrangeiro N.A. 74 12,5
Palácio Condes de Azevedo Oporto BPI Asset Management Portugal NA 7
Source Savills Research
Main Openings 1st Semester 2019
Zone Hotel New / Rebranding Stars Rooms
Maxime Hotel New 3 149
Casual Belle Époque Lisboa New 4 28
Lisbon
The One Palácio da Anunciada New 5 83
VIP Folque New 4 131
Moon and Sun Porto New 4 48
Hotel Acta The Avenue New 4 NA
Hotel NH Porto Jardim New 4 NA
Hotel Vila Galé Porto Ribeira New 4 130
Oporto
Oporto Airport & Business Hotel New 4 158
Porto Royal Bridges New 4 138
Vila Foz Hotel & Spa New 5 136
Porto Bay Teatro Rebranding 4 77
Grand House Hotel - V.R.S. António Rebranding 5 31
Algarve Monchique Resort & SPA Rebranding 5 185
Iberostar Selection Lagos Algarve Rebranding 5 220
Source Savills Research
22Savills Research
We’re a dedicated team with an unrivalled reputation for producing well-informed and
accurate analysis, research and commentary across all sectors of Portugal's property market.
Paulo Silva Patrícia Melo e Liz Alexandra Portugal Gomes Eurico Alves
Head of Country Portugal Chief Executive Officer Market Research Market Research
paulo.silva@savills.pt patrícia.liz@savills.pt alexandra.gomes@savills.pt eurico.alves@savills.pt
Rodrigo Canas Cristina Cristóvão Joana Rodrigues Paula Sequeira
Director Agency Director Agency Retail Director Architecture Director Consultancy
rodrigo.canas@savills.pt cristina.cristovao@savills.pt joana.rodrigues@savills.pt paula.sequeira@savills.ptYou can also read
