Portugal is trending, and the country's good momentum is also due to the real estate sector. The sector is becoming increasingly attractive, especially for international investors. This represented 87% of last year's commercial volume in the sector, compared to only 13% of domestic investors.
This is one of the findings of the bi-annual study that the consultant B. Prime developed and advertised at Expo Real, one of Europe's largest real estate and investment fairs held annually in Munich, Germany.
"B. Prime's study points to a compression of yields in street stores (4%) and the logistics segment (6.25%), and their stabilisation in office and shopping center properties. This fluctuation has led many investors to seek to diversify their portfolio risk by being more receptive to alternative projects and secondary locations to improve return. This trend underpins the growth of many student residences, coworking, coliving and senior residences that have proliferated in the domestic market, especially in major cities such as Lisbon or Porto. These initiatives have attracted the interest of some institutional investors, who have been adding to the growth of this sector," said B. Prime in a statement.
With regard to the nationality of foreign investors, the consultant said that Americans have been the most active and emphasized the acquisition of the Tivoli hotel portfolio, an agreement that amounted to 313 million euros, the largest hotel operation in history of Portugal.
For Jorge Bota, managing partner of B. Prime, "the real estate market has been an excellent bet for investors seeking alternatives to the negative interest rates that will remain, at least in the short term. Practically all Portuguese preferential income assets have changed ownership in recent years, demonstrating the attractiveness of the market, which in 2018 recorded the largest transaction to date, as there are records. The cycle is reaching a degree of maturity, which leads us to believe that the volume of investment will stabilise," he concludes.
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