Investment in commercial property in Portugal totalled €325 million in the second quarter of the year, bringing the first-half total to €700 million, property consultancy CBRE said on Monday.
For the whole of 2022, CBRE is maintaining the forecasts it made at the beginning of the year, for a total volume of transactions exceeding €3 billion, restoring the market to its level of before the pandemic.
In a statement, CBRE notes that “in the first six months of the year, the logistics and hospitality sectors showed a positive evolution, with investment of 230 [million] and €180 million respectively.
The office sector, it says, “maintained its attractiveness and investor confidence, which was reflected in the €190 million invested in the sector. In the first half of the year alone, occupancy in offices has already exceeded the indicator of 162,000 square metres corresponding to the area placed in the 12 months of 2021.”
At the same time, in the logistics sector, CBRE states that “a significant shortage of rental space is putting upward pressure on rents throughout the country.”
Meanwhile, the “accelerated recovery of tourism, particularly leisure tourism [is] also contributing to a faster than expected recovery in the tourist accommodation sector.
“In some locations, there have even already been higher indicators than those observed in 2019, such as overnight stays in tourist accommodation in Porto and RevPAR [average revenue per available room] in the Algarve,” it notes.
Quoted in the statement, CBRE Portugal’s director of research and data intelligence, Cristina Arouca, recalls that “three months ago, expectations pointed to a quarter with a volume of transactions higher than what took place” but that “the complexity of some of the ongoing business made the closure of the same skipped to the third quarter.”
Thus, in July alone CBRE expects to conclude the sale of three portfolios (offices, logistics and student residences), together representing €500 million.
Nuno Nunes, head of capital markets at CBRE Portugal, explained that despite the great global uncertainty surrounding the intensity and pace of interest rate increases, there is still high liquidity in investment funds to allocate to the property market, supporting CBRE’s projections of high investment through to the end of the year.
“The context of uncertainty we are experiencing may also be reflected in a greater perception of risk by buyers and a mismatch of price expectations between buyers and sellers,” he states. “In fact, although we do not expect yields to rise in the short term, we have already changed our perception compared to the beginning of the year, when we expected yield compression in several sectors.”