Portuguese Real Estate Investment Survey - 2019 Q4...For more information please contact, Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey –4th quarter 2019 2

Portuguese Real Estate Investment Survey - 2019 Q4Portugal in the real estate investment route

Portuguese Real Estate Investment Survey – 4th quarter 2019© 2020. For more information please contact, Deloitte Consultores, S.A. 2

Jorge Sousa Marrão

Partner

Real Estate Leader

Preface

Following the success of the past editions, it is with great pleasure that we launch the last edition of the Portuguese Real Estate Investment Survey.

We hope you find it useful as a reference tool to add value to the knowledge of the dynamics and trends of the real estate market in Portugal.

Once again, we would like to thank to the Panel of Invitees for their engagement and contribution over the several editions. The success of this initiative depends only on their dedication.

We are at your entire disposal to discuss any relevant question.

Carefully,

Jorge Marrão



Main Conclusions

Real Estate Strategy

Globally, the investment strategy

(75%) continues to be the

primary choice of players in real

estate sector, being higher than in

the first quarter of 2019 (57%).

Investment Strategy

Value added investments and

opportunistic deals (both 58%) are

perceived as the preferred

investment strategies. The majority

of players (58%) foresee to increase

their portfolio by more than 10%.

Business Feeders

Banks (75%) continue to be the

main business feeders of real estate

acquisitions, followed by Pension

Funds (67%). Capital sources arise

mainly from Europe (83%) and

North America (75%).

Divestment Strategy

Core assets (42%) and opportunistic

deals (42%) will be the main target of

further divestment. 34% of

respondents aim to reduce their

portfolio by more than 10% and other

33% aim to reduce it by more than 5%.

Investors

Pension Funds (67%) are

identified as the main real estate

purchasers, with capital sources

arising mainly from Europe

(92%) and North America (67%).

Real Estate Market

Noteworthy is the slight increase

in volume and transaction prices

in the hotel and logistics sectors,

as well as the great stability for

profitability rates, particularly in

the commercial sector.

In the last 12 months, 33%

of the respondents made

acquisitions of more than

50M€, and 25% up to 25M€,

mainly in the Portuguese

market.


Portuguese Real Estate Investment Survey – 4th quarter 2019 4

Introduction


IntroductionReal Estate strategy for 2020

Type of organization that participants represent

17%

75%

8%

None of the above

Divestment

Investment

59%

25%

8% 8%

Real Estate AssetManagement

Company

CorporateCompany

Bank InsuranceCompany


Introduction

Frequency of real estate portfolio strategy review A continuous review of the real estate portfolio is the strategy adopted by half of the players of the sector.

8%Twice a year

50%Continuous review process

17% When opportunities / changes in

market dynamics

25%Annually


IntroductionInvestment strategy over the last 12 months per market

Value of purchases made in the last 12 months

More than 50M€

Up to 25M€

Between 25M€ and 50M€

25%

33%

8%

67%

17%

Regional market

Portuguese market

European marketNo acquisitions were made in the last 12 months

33%

8%

Not applicable

9%


IntroductionDivestment strategy over the last 12 months per market

Value of disposals made in the last 12 months

66%

17%17%

Regional market

Portuguese market

European market

More than 50M€

Up to 25M€

From 25M€ to 50M€

25%

25%

0%

50%

No disposals


Investment strategy


Investment forecast for the next 12 months

Increase portfolio by more than 5%

Increase portfolio by more than 10%

Not applicable

Investment strategy for the next 12 months1

25%

17%

58%

Value added

Opportunistic

deals

Core 33%

58%

58%

Investment strategy

1Multiple choice question


Preferred investment sectors for the next 12 months1

Not applicableOtherResidentialIndustrial/ Logistics

RetailHotels

75%

58%50%

25% 25%

8% 8%

Investment strategy


11%

26%

40%

4%

3%

3%

13%

11%

26%

40%

4%

3%

3%

13%

CMVM – Investment by type of use

Comparative analysis

Services

Retail

Residential

Industrial

Hotels

Logistics

Other

Note: Investment for Real Estate Investment Funds, Real Estate Special

Investment Funds and Real Estate Management Funds – 30.09.2019

(Values at end of month) vs 30.06.2019 (Values at end of month)

Source: CMVM – Long time series

Offices


Investment strategySource of funding for next year1

Main funders for next year183%EUROPE

75%NORTH AMERICA

8%MIDDLE EAST

Banks (%)

Pension Funds

(%)

Insurance

companies (%)

Funds of Funds

(%)

Sovereign Funds

(%)

17%SOUTH AMERICA

Other (%)

33%ASIA

75%

25%

17%

67%

50%

25%

Legend: Each icon represents 10%1Multiple choice question


Investment strategyLength of the real estate asset’s acquisition process

Easiness of fund raising for the next 12 months

67%From 3 to 6

months

8%Up to 3 months

25%From 6 to 12

months

Neutral

Easy

Difficult

42%

33%

25%


Divestment strategy


Divestment forecast for the next 12 months

Divestment strategy

Reduce portfolio by more than 5%

Reduce portfolio by more than 10%

Not applicable

Divestment strategy for the next 12 months1

Core

Opportunistic

deals

Value added

Not applicable

33%

34%

33%

42%

42%

17%

17%



Divestment strategy

Preferred divestment sectors for the next 12 months1

50%

33%

25%

17%

8%

25%

Not applicableOtherResidentialIndustrial/ Logistics

RetailOffices


Residential and Offices are the preferred divestment sectors for players that operate in the real estate market in Portugal


Funds of Funds (%)

Source of financing for next year1

Main real estate investors for next year1

Pension Funds (%)

Insurance

Companies (%)

92%EUROPE

67%NORTH AMERICA

33%ASIA

25%MIDDLE EAST

25%SOUTH AMERICA

1Multiple choice question Legend: Each icon represents 10%

Divestment strategy

42%

42%

Sovereign Funds

(%) 33%

Other (%) 42%

67%


Divestment strategyLength of the real estate asset’s disposal process

Easiness of investors gathering for the next 12 months

17%Up to 3 months

58%From 3 to 6

months

8%More than 12

months

Neutral

Easy

Difficult

42%

42%

16%

17%From 6 to 12

months


Real estate market in Portugal



For the next 3 months, it is expected particularly for the retail sector to remain stable in terms of volume and sales price.

It is expected a slight increase in volume and prices in the hotel sector and an increase in the industrial sector.

Volume and sales price for the next 3 months

Retail / servicesResidential Industrial / logistics

33%

8% 8% 8%

34%

59%

33%33%

33% 33%

42%59%

17%

Hotels

Increase Slightly decreaseSimilarSlightly increase


Profitability rates for the next 3 months


In general, for the next 3 months, it is expected a great stability for profitability rates in the commercial sector.

HotelsRetail / servicesResidential Industrial

Increase Slightly decreaseSimilarSlightly increase

33% 25% 33%

59%

100%

67%34%

8%

33%

8%



New players entrance andforeign investment stand out as the variables that will have the greatest positive impact in the real estate sector.

Bureaucracy and fiscal policy are the main variables that will negatively impact the sector.

Impact of several variables in the real estate sector for the next 3 months

New players

entranceBureaucracy Fiscal Policy Political

situation

Demand Supply Foreign

investment

PositiveNegative Neutral

42%33%

34%58%

42% 33% 58%

42%

58%42%

33%

25%42%

58%

25%

75%


The Portuguese Real Estate Investment Survey’s main goal is to assess:

• The perception of the real estate market evolution by the involved parties; and

• Understand which is the current and future strategy of the organizations.

The survey was sent to a Selected Panel of Participants on 20th November, the answers were obtain on 29th November, and were subject to analysis.

In case of doubt, some additional information or any clarification, please contact:

Jorge Sousa MarrãoPartnerTlm.: +(351) 963 902 674Tel.: +(351) 210 422 [email protected]

Inês Cintra CostaSenior ManagerTlm.: +(351) 962 103 923Tel.: +(351) 210 427 [email protected]

Technical Note



Contacts

Jorge Sousa Marrão

Partner

Real Estate LeaderTlm. +(351) 963 902 674

[email protected]

Inês de Cintra Costa

Senior Manager

Real Estate – Financial AdvisoryTlm. +(351) 962 103 923

[email protected]

Ricardo Reis

Partner

Real Estate - TaxTlm. +(351) 964 736 261

[email protected]

Diogo Pires

Senior Manager

Real Estate – TaxTlm. +(351) 964 837 258

[email protected]

mailto:[email protected]




© 2020. For more information please contact, Deloitte Consultores, S.A.

“Deloitte” refere-se a Deloitte Touche Tohmatsu Limited, uma sociedade privada de responsabilidade limitada do Reino Unido (DTTL), ou a uma ou mais entidades da sua rede de firmas membro e respetivas entidades relacionadas. A DTTL e cada uma das firmas membro da sua rede são entidades legais separadas e independentes. Aceda a www.deloitte.com/pt/about para saber mais sobre a nossa rede global de firmas membro.

A Deloitte presta serviços de auditoria, consultoria, financial advisory, risk advisory, consultoria fiscal e serviços relacionados a clientes nos mais diversos setores de atividade. Quatro em cada cinco empresas daFortune Global 500® recorrem aos serviços da Deloitte, através da sua rede global de firmas membro presente em mais de 150 países, combinando competências de elevado nível, conhecimento e serviços de elevada qualidade para responder aos mais complexos desafios de negócio dos seus clientes. Para saber como os aproximadamente 245.000 profissionais criam um impacto positivo, siga a nossa página no Facebook, LinkedInou Twitter.

Esta comunicação contém apenas informação de caráter geral, pelo que não constitui aconselhamento ou prestação de serviços profissionais pela Deloitte Touche Tohmatsu Limited, pelas suas firmas membro ou pelas suas entidades relacionadas (“Rede Deloitte”). Antes de qualquer ato ou omissão que o possa afetar, deve aconselhar-se com um profissional qualificado. Nenhuma entidade da Rede Deloitte pode ser responsabilizada por quaisquer danos ou perdas sofridos pelos resultados que advenham da tomada de decisões baseada nesta comunicação.

https://www.facebook.com/deloitte?_rdr=p

https://www.linkedin.com/company/deloitte

https://twitter.com/deloitte

Documents

Portuguese Real Estate Investment Survey - 2019 Q4...For more information please contact, Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey –4th quarter 2019 2