Portuguese Real Estate Investment Survey Outlook 2017 · Portuguese Real Estate Investment Survey...

Portuguese Real EstateInvestment Survey – Outlook 2017A turnaround for Portuguese real estate

Portuguese Real Estate Investment Survey – Outlook 2017

Preface

The Portuguese Real Estate Investment Survey is a quarterly tool that analyses the perception of a selected panel of participants who work daily in the Portuguese real estate sector.

With the launch of the Outlook 2017 edition we aim to compile and evaluate the evolution of this perception throughout the year 2017, allowing the players of the sector to have a systematized picture of this period, which has demonstrated a huge positivism for our country.

We look forward to continuing to contribute with useful and up-to-date tools that enhance a better understanding of the real estate industry nationwide.

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

Carefully,

Jorge Marrão

Jorge Sousa Marrão

Partner

Real Estate Leader


3

2017 Outlook

2017 Outlook

Portuguese Real Estate Investment Survey

KEY MESSAGES

REAL ESTATE

STRATEGY FOR 2017

INVESTMENT

STRATEGY

DIVESTMENT

STRATEGY

2Portuguese Real Estate Investment Survey – Outlook 2017© 2018. Para informações, contacte Deloitte Consultores

• The investment strategy has increased its representativeness throughout the year.

• The portfolio managementstrategy, although representative, presented a downward trend in the players' strategic options, together with the divestment strategy.

• Throughout 2017, the Value Added demonstrated to be the type of assets with the greatest potential for investment. Core assets came next, although with a decreasing trend.

• Banks stood out as the main business feeders in the acquisitions of real estate assets.

• The origin of the capital was mainly European.

• Greater easiness of fundraising and a shorter duration of asset acquisition processes were perceived.

• Core assets were and will be the target of further divestment by industry players.

• Throughout the year, the importance of Funds of Funds as the main real estate investors in Portugal was highlighted, as well as the growth of the Insurance Companies.

• The origin of the investors was mainly European.

• A stabilization in fundraising and a reduction in the length of asset disposal processes were perceived.

• During 2017, there was an increase in volume and sales prices, mainly in the residential, retail / services and hotel sectors.

• After a take-off with decreasing profitability rates, a later stabilization were perceived in the four sectors under analysis (residential, retail / services, industrial and hotel).

2017 Outlook


REAL ESTATE STRATEGY FOR 2017

Divestment

Portfolio management

Investment

1st QUARTER 2nd QUARTER 3rd QUARTER 4th QUARTER

36%

28%

36%

44%

25%

31%

32%

41%

27%

33%

29%

38%

Divestment


Investment

Divestment


Investment

Divestment


Investment

2© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017

6

Investment strategy

62%

27%

69%

44%

19%

32%

25%25%

52% 41%

38%

25%

2017 Outlook | Investment strategy [1/3]


CURRENT INVESTMENT

STRATEGY

1º T 2º T 3º T 4º T

Value added

Opportunistic deals

Core

FUNDERS/ BUSINESS FEEDERSFUTURE INVESTMENT

STRATEGY


52%

41% 38%

50%52%

27%31%

13%

38%

14%

9%

14%25%

6%


INVESTMENT STRATEGY

52%

32%

50%

31%29%

32% 31%25%

52%

41%

44%

31%

Value added

Opportunistic deals

Core

Banks

Fund of funds

Pension funds

Insurance companies

Sovereign funds




ORIGIN OF CAPITAL

INVESTMENT STRATEGY

North America

1st Q 2nd Q 3RD q 4th Q

48% 27% 63% 19%

South America

1st Q 2nd Q 3rd Q 4th Q

5% 14% 6% 13%

Europe

1st Q

81%

2nd Q

73%

3rd Q

75%

4th Q

69%

Asia

1st Q

29%

2nd Q

36%

3rd Q

31%

4th Q

25%

MiddleEast


14% 18% 25% 6%


34%

15%18%

9%

52%50%

44%

36%

14%

35%38%

55%



FUNDRAISING APPROACH – IN

THE LAST 12 MONTHS

LENGHT OF AQUISITION

PROCESS

FUNDRAISING APPROACH – FOR

THE NEXT 12 MONTHS

1st Q 2nd Q 3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q

INVESTMENT STRATEGY

43%

25%

44%

9%

33%

45%

25%

27%

24%

30%

31%

64%


Difficult

Neutral

Easy

Difficult

Neutral

Easy

Up to 3 months

Between 3 to 6 months


More than 12 months

6© 2018. For more information, contact Deloitte Consultores, S.A.

14%10%

13%

0%

57%55% 56%

91%

24%

30% 31%

9%

5%5%

0%0%


10

Divestment strategy

19%

18%

14%

50%52%

36%

50%

40%38%

27%

21%

40%

19%

18%

43% 40%

10% 9%

21%

0%


52%

32%

50%

20%29%

27%29%

30%

33%

36%

50%

50%

38%

23%29%

10%

29%

32%

36%

30%

43%41%

50%

60%

2017 Outlook | Divestment strategy [1/3]


CURRENT DIVESTMENT

STRATEGY


Value added

Opportunistic deals

Core

MAIN REAL ESTATE INVESTORSFUTURE DIVESTMENT STRATEGY


DIVESTMENT STRATEGY

Value added

Opportunistic deals

Core

Sovereign Funds

Funds of Funds

Pension Funds

Insurance Companies

Banks




ORIGIN OF INVESTORS

DIVESTMENT STRATEGY

North America


52% 23% 57% 40%

South America


10% 18% 7% 50%

Europe

1st Q

71%

2nd Q

77%

3rd Q

86%

4th Q

80%

Asia

1st Q

33%

2nd Q

45%

3rd Q

36%

4th Q

70%

MiddleEast


19% 23% 21% 20%


10%

16%

0% 0%

50%

31%

50%

70%

35%

37%

43%

30%

5%

16%

7%

0%


20%

11%

21%

30%

60%

68%

29%

30%

20%21%

50%

40%

30%

16%

28%

20%

40%

58%

36%

30%

30% 26%

36%

50%



FUNDRAISING APPROACH – LAST 12

MONTHS

LENGHT OF SELLING PROCESS FUNDRAISING APPROACH – NEXT 12

MONTHS


DIVESTMENT STRATEGY


Difficult

Neutral

Easy

Difficult

Neutral

Easy


Up to 3 months



More than 12 months


14

Real Estate market in Portugal

s

2017 Outlook | Real Estate market in Portugal [1/2]


VOLUME AND SALES PRICE FOR THE NEXT 3 MONTHSBY SECTOR OF ACTIVITY

RESIDENTIALRETAIL/

SERVICES


Decrease

Slightly decrease

Similar

Slightly increase

Increase


INDUSTRIAL

Decrease

Slightly decrease

Similar

Slightly increase

Increase


Decrease

Slightly decrease

Similar

Slightly increase

Increase HOTELS1st Q 2nd Q 3rd Q 4th Q

Decrease

Slightly decrease

Similar

Slightly increase

Increase


10%

15%

34%36%

20%

45%

33%36%

50%

30%

33%28%

30%25%

33%

22%

0%

55%

61%64%

70%

20%6%

14%

30%

6%

65%

50%

64%

40%

30%

38%

29%

40%

5% 6% 7%

20%

7%

20% 22%

29%

10%

55% 56%

50%

60%

25%22%

14%

30%


2017 Outlook | Real Estate market in Portugal [2/2]


PROFITABILITY RATES FOR THE NEXT 3 MONTHSBY SECTOR OF ACTIVITY

RESIDENTIALRETAIL/

SERVICES

INDUSTRIAL HOTELS



Decrease

Slightly decrease

Similar

Slightly increase

Increase


Decrease

Slightly decrease

Similar

Slightly increase

Increase


Decrease

Slightly decrease

Similar

Slightly increase

Increase


Decrease

Slightly decrease

Similar

Slightly increase

30%

44%

21% 20%

35%

28%

58%

70%

30% 28%

21%10%

5%

5% 6%

25%

33%

14%

30%

50%

61% 79%60%

20%

7% 10%7%

35%

22%

21%

30%35%

45%

36%

50%

25%

22%

36%

20%

5% 11%

6%

8%

45%

33%

21%40%

35%

44%

50%

40%

10%

6%

21%20%

10%

11%



Contacts

Miguel Paiva Couceiro

Manager

Real Estate – Financial Advisory

Deloitte Portugal

Mob. +(351) 917 240 884

Tel. +(351) 210 422 500

[email protected]

Jorge Sousa Marrão

Partner

Real Estate Leader

Deloitte Portugal

Mob. +(351) 963 902 674

Tel. +(351) 210 422 503

[email protected]

Ricardo Reis

Partner

Real Estate - Tax

Deloitte Portugal

Mob. +(351) 964 736 261

Tel. +(351) 210 427 564

[email protected]

Inês Cintra Costa

Manager

Real Estate – Financial Advisory

Deloitte Portugal

Mob. +(351) 962 103 923

Tel. +(351) 210 422 500

[email protected]

Diogo Pires

Senior Manager

Real Estate - Tax

Deloitte Portugal

Mob. +(351) 964 837 258

Tel. +(351) 210 427 541

[email protected]

mailto:[email protected]





© 2018. For more information, contact Deloitte Consultores, S.A.

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