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Summary & Presentations

download presentations:

[download participation list Here]

20 september main room

António Nogueira Leite apFipp, José Antonio Mello

apFipp, José Veiga Sarmento epra, Laurent Ternisien

21 september main room

aguirre newman, Paulo Silva Cushman Wakefield, Eric Van Leuven

Deloitte, Jorge Marrao Jll, Jorge Valenzuela msci, Malcom Hunt

21 september parallel sessions

aguirre newman Cushman Wakefield

cbre Jll

Neoturis

(private acess to Portugal RE Summit participants)

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Portugal real estate summit 2016. and so it went…

September 20 – AfternoonAfter a welcome speech by the director of Vida Imobiliária, António Gil Machado, the president of APFIPP, José Veiga Sarmento closed the Opening Session by stating that “Portugal is an increasingly interna-tional investment destination” and Portuguese real estate funds can and should continue to play a “transformational role in our cities”.

This was followed by the first panel of the afternoon, chaired by Manuel Puerta da Costa, chairman of APAF, with a debate centred on “Portu-gal from an economic perspective – between the Atlantic and Europe”. Currently experiencing “an extremely positive phase, with an overall increase in every segment”, the former Finance Minister, Teixeira dos Santos, described the property sector as “the goose that lays the gold-en eggs that must be preserved”. The great challenge the Government currently faces is to “nurture investment”, and the professor defended that “in order not to ruin the goose, uncertainty must be destroyed and investors must be presented with simple and stable rules”. A vision that is shared by António Nogueira Leite, who was emphatic regarding the need to “maintain a simple, transparent and clear game” because

“that is what foreign investors are looking for”. In his opinion, “Portu-gal has capitalism without capital” and, “in order to ensure we don’t lose what we accomplished during the crisis or lose competitiveness to other contending destinations, it is crucial that the achievements attained until last year are not overturned”.

On September 20 and 21, Estoril hosted the Portugal Real Es-tate Summit, the greatest meeting among international real es-tate investors to ever take place in our country. This first edition attracted an audience of 300 professionals to the Hotel Palácio, including a wide range of international investors who wanted to determine firsthand the reasons why the Portuguese market has been asserting itself as a destination for foreign capital.

Co-organised by Vida Imobiliária and Promevi, the event gar-nered extensive support from the national real estate indus-try, with sponsorship by Aguirre Newman, CBRE, Cushman & Wakefield and JLL, as well as Abreu Advogados, MLGTS Ad-vogados, Deloitte, Explorer Investments and the SIL Group. The Portugal Real Estate Summit also received widespread support from the main associations and bodies that mobilise real estate investment on a global, European and national scale, including RICS-Royal Institution of Chartered Surveyors, EPRA-Europe-an Public Real Estate Association, ULI-Urban Land Institute and ASPRIMA, the real estate developers association of Madrid. ACAI, APPII, APAF and APFIPP were the Portuguese entities as-sociated with this event. On a national level, many companies guaranteed their attendance at the Portugal Real Estate Summit and played a prominent role, including Baía do Tejo, Square As-set Management, Refundos SGFII and Vilamoura World, as well as, in the services sector, Auxadi and Broadway Malyan.

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prime-miniSter promiSeS to exAmine the reit regime in portugAlThe Prime-Minister, António Costa, didn’t want to miss the Portugal Real Es-tate Summit, and was the guest of honour at the conference dinner on Sep-tember 20. At this meeting with leaders of the capital markets industry, Costa ensured that the Government is studying the implementation of the REIT re-gime in Portugal, although he did not commit to amending the legislation in the upcoming financial year.

After expressing the Government’s commitment to develop every effort to attract investment, which drives the country’s wealth and competitiveness, the Prime-Min-ister suggested that any new tax introduced will not be levied on this economic activ-ity, particularly on properties that are operational and support the corporate fabric, without ever specifically mentioning the impending new property tax.

After the coffee-break, Rui Peixoto Duarte, partner at Abreu Advogados, chaired a ses-sion on “Investment Strategies”. Following an outline of the European market by the Head of Research Continental Europe at CBRE, Jos Tromp, Laurent Ternisien, Sen-ior Advisor da EPRA – European Public Real Estate Association, spoke about how REITs help strengthen the sector. Regretting that in Portugal, unlike Spain, these publicly traded vehicles have yet to leave the drawing board, this expert stated that this “may in-cur heavy costs for the country in terms of its international competitiveness”, explain-ing that once REITs are operational, “these will be a major driver of market capitalisa-tion, attracting even more capital to Portu-guese real estate”. Furthermore, stating that

“we need this type of investment product”, the chairman of the APFIPP REIF Advisory Board, José António de Mello, revealed that the association “is lobbying the relevant entities so that we may have REITs and a truly competitive fund industry in Portugal in comparison with other competing desti-nations, Spain in particular”.

This was also the subject of discussion at the roundtable that joined David Brush, CIO of Merlin Properties, José António Martín-Bor-regón, Managing Director Spain & Portugal at CBRE Global Investors, Pedro Seabra, Partner Real Estate & Tourism of Explorer Invest-ments, Richard Croft, CEO of M7 Real Estate and Pedro Abella, Principal of H.I.G Capital.

// David Brush - Merlin Properties, Chief Investment Officer; Pedro Seabra - Explorer Investments, Partner Real estate & Tourism; José Antonio Martín-Borregón - CBRE Global Investors, Managing Director Spain & Portugal; Richard Croft - M7 Real Estate, CEO; Pedro Abella H.I.G. Capital, Principal; Rui Peixoto Duarte, Abreu Lawyers, Partner

// António Nogueira Leite, Professor of Economics at Nova School Business and Economics; Manuel Puerta da Costa - APAF, Chairman; Fernando Teixeira dos Santos, Professor at Faculdade de Economia da Universidade do Porto;.

// José Veiga Sarmento - APFIPP, Chairman

// António Costa, Prime-Minister of Portugal

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// Malcon Hunt - MSCI, Executive Director // Eric van Leuven - Cushman & Wakefield, Head of Portugal

// Jasie Leekha - GreenOak, Principal

// Miguel Santana - Fosun Group / Fidelidade Property Europe, CEO

// Paulo Silva - Aguirre Newman, Managing Director Portugal

// Filipa Arantes Pedroso - Morais Leitão, Galvão Teles, Soares da Silva & Associados, Partner

// Paul Taylor - Vilamoura World, President

September 21 - morning«Who is investing and how?» was the topic that launched the second day of the Portugal Real Estate Summit. The interna-tional observer Malcom Hunt, executive director at MSCI, considers that recovery of the Portuguese and Spanish prop-erty markets is still “relatively modest”, although he acknowl-edged that 2015 “was a very strong year” for the sector, and in Portugal “more than 90% of investors are foreign”.

Recognising the predominance of foreign capital, Eric van Leuven, director of Cushman & Wakefield Portugal, has no doubt that “there is still much room to add value to the property market”, as well as to “improve rental growth”. An opinion shared by Paulo Silva, managing director of Aguirre Newman, who believes that, after developing the residential sector, one of the best growth opportunities to-day lies in the office sector. A trend that is already evident in major corporations relocating their service centres to Portugal, namely to the cities of Lisbon and Porto, where “rents still have great room to grow compared with other European cities”, Silva adds.

The roundtable, moderated by Filipa Abrantes Pedroso, included the participation of Roberto Roca, Director of Capital Markets at Orion Capital Managers, in Spain; Ja-sie Leekha, of GreenOak; Miguel Santana, CEO of Fideli-dade Property Europe and Paul Taylor, CEO of Vilamoura World, and focused on the sector’s need to provide inves-tors, both foreign and national, with confidence and cer-tainty in a stable and transparent fiscal policy.

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September 21 – AfternoonOn the afternoon of the 2nd day of the Portugal Real Estate Summit, the focus turned to development and financing, and the alternatives offered in today’s scenario. Jorge Valenzuela, National Director Debt Advisory Di-rector at JLL, began by making a presentation that addressed the current status of capital markets, and “how important it is for banks to finance” economies. Namely those banks that still grant loans, albeit more cautious-ly and using new models. As for alternative financing sources, the expert highlighted insurance companies, calling them “the new market players”.

Jorge Sousa Marrão, Real Estate partner at Deloitte, warned that the market is still “suffering from the 2008 crisis”, although he believes “we must be optimistic, and there are good deals to be made in Portugal”. In his opinion, the strategy involves attracting more capital to the coun-try, since Portugal is “safe for investing in the real estate business”.

The event’s final panel, moderated by Gilberto Jordan, vice-president of APPII, included the participation of Juan Pepa, Managing Director of Lone Star, Pedro Silveira, Chairman of Silcoge, Alexandre Fernandes, Head of Asset Management for Europe at Sonae Sierra, and Juan Anto-nio Gómez, chairman of ASPRIMA.

These executives agree that the Iberian market is “much better” after the cri-sis, and that “SOCIMIs are an important driver of this market” in the case of Spain, states Juan Antonio Gómez, who believes that the major challenges include finding a solution for the obsolete housing stock in Spain and facili-tating access to housing for youths, as well as finding new forms of financing.

The need for financing was also affirmed by Pedro Silveira, and the group’s portfolio includes several projects in the Lisbon region that are waiting for that capital and the necessary partners. Sonae Sierra also finds it difficult to establish financing partnerships in foreign markets, although these are necessary. And, within this context, Alexandre Fernandes believes that “we are wasting time in Portugal by not creating REITs”.

Topics such as political instability and Brexit were discussed as challenges the sector shall face in the near future. However, compared with a world that has changed and where stability no longer exists, Juan Pepa considers that “Brexit will be a mere detail in the next five years. We live in a world that is no longer stable, and if we want to find bad news and do nothing, it’s easy”. Therefore, “it’s time to have a vision and take action”, referring to the creation of new product that meets the market’s needs.

// Jorge Valenzuela - JLL, Nacional Director Debt Advisory Director // Jorge Sousa Marrão - Deloitte, Partner Real Estate

// Juan Antonio Gómez - ASPRIMA, President

// Alexandre Fernandes - Sonae Sierra, Head of Asset Management, Europe

// Pedro Silveira - Silcoge, Chairman

// Juan Pepa - Lone Star, Managing Director

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urbAn renewAl, the pArty iS here! PARALLEL SESSION – JLLResulting from the growing urban renewal movement taking place in Lisbon, particularly in the city centre, JLL estimates that in the capi-tal’s centre alone, 720 new luxury apartments will enter the sale mar-ket, in the most part regenerated residences. This represents a 40% growth in the past 2 years.

Despite recognising this growth in Lisbon’s premium residential mar-ket, JLL underlines that this is a small-sized market, especially within a global panorama, considering it did not exist until recently. This is why, in terms of prices, it is still quite attractive to national investors, who are the main buyers. At the moment, the average sale price for this type of apartment in Lisbon’s prime zones, particularly Avenida da Liberdade and Chiado or Baixa, is around 8.000 euros/m², still well below the 12.500 euros/m² in Madrid, for example.

Patrícia Barão, Head of Residential at JLL, comments that “it is unde-niable that Lisbon is today a rejuvenated city, which is increasingly attractive to tourists and investors, and the residential market is driv-ing this new life in the city. Quality supply and competitive prices in a European capital are attractiveness factors in our market, which will continue to be a focal point to draw foreigners”.

At the event, Barão also stressed that “the prospects for growth in de-mand are, indeed, quite encouraging, which is why we believe that there are still many opportunities to develop new product”.

For their part, developers also agree that Lisbon remains attractive in this segment and that the market has room to grow, rejecting the notion of a real estate bubble. However, we must consider new zones for devel-opment in the city, such as Ajuda, Alcântara, Mouraria and Almirante Reis, and optimise other sectors with potential for urban renewal, such as offices and specialised residences, although profitability levels for these are currently considerably lower.

where to Shop? PARALLEL SESSION – C&WOne of the ‘parallel discussions’ at the event was organized by Cushman & Wakefield, focusing on the retail market in Portugal. The presentation was made by Luís Rocha Antunes, head of capital markets at C&W, and Sandra Campos, the consultancy’s head of Retail.

According to these experts, who gave a brief summary of the market, “it all starts with demographics”, which is incidentally one of the main challenges in Europe. In Portugal in particular, high street retail, espe-cially in prime zones, has been growing exponentially, not only due to the increase in tourism, but also to ‘Golden Visas’, which has now placed Lisbon “in competition with Eastern European countries”, noted Luís Rocha Antunes. On the other hand, Erasmus exchange students, the city’s ‘new settlers’, have had great influence in this regard, along with major events such as the Web Summit, which place Lisbon on the map.

In Lisbon, the great movement in high street retail began, after the crisis, in the Chiado and Avenida da Liberdade zone, and now reaches the Baixa, Príncipe Real and Cais do Sodré. Investors continue to exert strong pres-sure on demand in the first two locations, but are widening their range of options as new shopping destinations become more popular.

Once works on its central axis are complete, the Saldanha zone was indi-cated by those attending the session as a new possible high street retail shopping destination. Sandra Campos believes that “zones cannot be replicated. But this will undoubtedly be a new shopping area”.

Regarding shopping centres, and faced with a consolidated and mature market, the focus in upcoming years will remain on expanding and up-dating existing assets, “with great emphasis on the consumer experi-ence”, which “also applies to high street retail”.

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“touriSm – the mArket Driver in iberiA” PARALELL SESSION PRESENTED By CBRE“Although several prominent markets, such as Brussels, Paris and, especially, Istanbul, are being negatively influenced by the terrorism phenomenon, investment in hotels has been accelerating all over Eu-rope in recent months, due to a healthy appetite for a secure source of revenue”, began by explaining Jane Lees, Senior Director, CBRE Hotels.

And, representing 20% of the tourist offer in Portugal, in other words, the equivalent of 30.000 rooms and 60.000 beds (considering a catch-ment area that extends to Cascais), Lisbon does not seem to be the ex-ception in this trend, especially at a time when the tourism business continues to gain strength in the Portuguese capital, maintaining pros-pects of sustainable revenue for investors.

Pursuant to data by Neoturis provided by the firm’s partner Eduardo Abreu, “although the greatest portion of the tourism offer in Portugal continues to be concentrated in the Algarve, 25% of tourism demand in Portugal is concentrated in Lisbon”. According to this expert, “the number of available rooms in the city of Lisbon is rising at an average of 3.45% per year since 2004”, a rate that is highly surpassed by the increase ob-served in deman, “which has grown substantially in recent years”. And forecasts indicate that “in 2016, we will come very close to another double digit growth (approximately 10%) in tourism demand in Lisbon”.

Today, “Lisbon has already become a must see city in Europe, such as Vienna and Budapest, and is also on the map of secondary cities that intercontinental visitors want to see after touring the great capitals like Paris, London and Rome”, Eduardo Abreu stated, later explaining that the average room prices here are still quite low compared with most other European counterparts which, Abreu claims, “is a problem for investors”.

However, throughout the session, it became clear that “there is room for hotel prices to rise in Lisbon, even with the growth observed on the supply side”, as stated by Francisco Horta e Costa, Managing Director of CBRE Portugal. He believes the conditions are right to “create a hotel investment market in Lisbon in the near future”.

officeS & inDuStriAl – where Are the beSt optionS? PARALLEL SESSION AGuIRRE NEWMANThe evolution of the national property market in the offices and indus-trial segments was analysed in a session led by Paulo Silva, Managing Director of Aguirre Newman.

“Portugal is increasingly attractive to large corporations”, an opinion stated by Paulo Silva but shared by all investors, developers and owners who attended this session.

BNP Paribas, Teleperformance and Altran are just some examples of companies that have chosen Lisbon to relocate their services. If, on the one hand, the Portuguese office market has registered “growing de-mand”, on the other, supply has not followed at the same pace. “In re-cent years, the office supply in Lisbon has increased, but only slightly”, Silva stated. “Compared with 2015, 2016 shows a decrease in the offer of new office spaces”, he explains, adding that for 2017 “we expect an in-crease of 38.300 m²”. Overall, 2016 and 2017 shall bring approximately 54.200 m² of new supply.

The national momentum in the residential and office sectors is not re-peated in the industrial sector. Nonetheless, “the less positive perfor-mance” of this sector is viewed by market agents as “a good opportunity”.

The occasion was also attended by Ricardo Valente, the Councillor for Economic and Social Development for the Porto Municipal Council, who presented the strategy followed by the Porto municipality and the future impact of the intervention planned for Campanhã and the Antigo Matadouro do Porto (former slaughterhouse) project.

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PORTUGAL REAL ESTATE SUMMITLISBON2016 | | Hotel Palácio 20-21 September Estoril

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