Commercial Property In Portugal To Double
News Posted On: 30 June 2014
Commercial real estate is forecast to double in Portugal this year, according to Cushman & Wakefield Inc, a commercial real estate services firm. The economy of Portugal is expected to receive an estimable boost from foreign investments, given the growing interest specifically shown towards Portugal’s real estate sector.
Cushman & Wakefield Inc anticipates the spending on commercial properties to rise from 322 million Euros in 2013 to 800 million Suros ($1.09 billion) in 2014. Investment giants such as the Global Asset Capital, Deka Group and Merlin Properties SA are keenly eying the Portugal real estate market, looking to buy a commercial property in the country.
Investor appetite picks up pace in Portugal
Global Asset Capital, California-based private equity firm recently acquired the headquarters of EDP-Energias de Portugal, a Portuguese power company in Lisbon. Reports state that Global Asset Capital bought four buildings from EDP. CBRE Group Inc., property consulting and research firm, was consulted with regards to this deal. In a statement, a spokesperson of the firm stated that it was the decade’s biggest real estate transaction in Lisbon’s central business district.
Germany's largest property manager, Deka, had acquired the Baltico building, a prime office property in Lisbon for 43 million Euros in late 2013. The vendor was a Portuguese construction company, Mota-Engil. Deka has since, rented out this building to CTT-Correios de Portugal, a Portuguese state postal services company.
Portugal has emerged from its longest recession in at least 25 years. In an attempt to garner a stake in the market economy through the real estate sector, the Portuguese government has innovatively designed a Golden Visa scheme. With this scheme, foreign investors are given residency permits, provided they buy properties in Portugal, amounting to a value of 500,000 euros and above. This investment can be made in one or several properties, be it residential, commercial or industrial by nature.
Big players eying Portuguese commercial assets
Investment giants are seeing Portugal as a favorable market for commercial real estate investments. In terms of future investments, Merlin Properties, a Spanish real estate investment trust, has been in the news lately as it is aiming to raise about $2 billion through an Initial Public Offering (IPO). This could very well be Spain’s largest Initial Public Offering (IPO) since 2011, claim news reports. Merlin Properties plans to invest a part of the proceeds accrued towards buying commercial properties in Spain and may consider commercial assets in Portugal as well.
Deka, Germany’s biggest manager of real estate mutual funds, is also looking to acquire more office properties in Portugal, according to statements made by the company in April. Given the recent financial recession, reports state that Deka is now selective of its investments, though it is is still eying 2.3 billion euros worth of acquisitions. The company is more focused on investments outside of Europe.
The overall Portuguese real estate market has witnessed a positive growth over the last three quarters. 2013 had already marked a turnaround on the investments in commercial real estate in the country and the fact that it should intensify in 2014, is positive news for the real estate market as a whole.
Written by Les Calvert
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