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
Portuguese Real Estate Investment Survey – Outlook 2017
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
Portuguese Real Estate Investment Survey
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
Portfolio management
Investment
Divestment
Portfolio management
Investment
Divestment
Portfolio management
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]
Portuguese Real Estate Investment Survey
CURRENT INVESTMENT
STRATEGY
1º T 2º T 3º T 4º T
Value added
Opportunistic deals
Core
FUNDERS/ BUSINESS FEEDERSFUTURE INVESTMENT
STRATEGY
1º T 2º T 3º T 4º T
52%
41% 38%
50%52%
27%31%
13%
38%
14%
9%
14%25%
6%
1º T 2º T 3º T 4º T
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
4© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017
2017 Outlook | Investment strategy [2/3]
Portuguese Real Estate Investment Survey
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
1st Q 2nd Q 3rd Q 4th Q
14% 18% 25% 6%
5© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017
34%
15%18%
9%
52%50%
44%
36%
14%
35%38%
55%
2017 Outlook | Investment strategy [3/3]
Portuguese Real Estate Investment Survey
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%
1st Q 2nd Q 3rd Q 4th Q
Difficult
Neutral
Easy
Difficult
Neutral
Easy
Up to 3 months
Between 3 to 6 months
Between 6 to 12 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%
Portuguese Real Estate Investment Survey – Outlook 2017
10
Divestment strategy
19%
18%
14%
50%52%
36%
50%
40%38%
27%
21%
40%
19%
18%
43% 40%
10% 9%
21%
0%
1st Q 2nd Q 3rd Q 4th Q
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]
Portuguese Real Estate Investment Survey
CURRENT DIVESTMENT
STRATEGY
1st Q 2nd Q 3rd Q 4th Q
Value added
Opportunistic deals
Core
MAIN REAL ESTATE INVESTORSFUTURE DIVESTMENT STRATEGY
1st Q 2nd Q 3rd Q 4th Q
DIVESTMENT STRATEGY
Value added
Opportunistic deals
Core
Sovereign Funds
Funds of Funds
Pension Funds
Insurance Companies
Banks
8© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017
2017 Outlook | Divestment strategy [2/3]
Portuguese Real Estate Investment Survey
ORIGIN OF INVESTORS
DIVESTMENT STRATEGY
North America
1st Q 2nd Q 3rd Q 4th Q
52% 23% 57% 40%
South America
1st Q 2nd Q 3rd Q 4th Q
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
1st Q 2nd Q 3rd Q 4th Q
19% 23% 21% 20%
9© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017
10%
16%
0% 0%
50%
31%
50%
70%
35%
37%
43%
30%
5%
16%
7%
0%
1st Q 2nd Q 3rd Q 4th Q
20%
11%
21%
30%
60%
68%
29%
30%
20%21%
50%
40%
30%
16%
28%
20%
40%
58%
36%
30%
30% 26%
36%
50%
2017 Outlook | Divestment strategy [3/3]
Portuguese Real Estate Investment Survey
FUNDRAISING APPROACH – LAST 12
MONTHS
LENGHT OF SELLING PROCESS FUNDRAISING APPROACH – NEXT 12
MONTHS
1st Q 2nd Q 3rd Q 4th Q
DIVESTMENT STRATEGY
1st Q 2nd Q 3rd Q 4th Q
Difficult
Neutral
Easy
Difficult
Neutral
Easy
10© 2018. For more information, contact Deloitte Consultores, S.A.
Up to 3 months
Between 3 to 6 months
Between 6 to 12 months
More than 12 months
Portuguese Real Estate Investment Survey – Outlook 2017
14
Real Estate market in Portugal
s
2017 Outlook | Real Estate market in Portugal [1/2]
Portuguese Real Estate Investment Survey
VOLUME AND SALES PRICE FOR THE NEXT 3 MONTHSBY SECTOR OF ACTIVITY
RESIDENTIALRETAIL/
SERVICES
1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase
1st Q 2nd Q 3rd Q 4th Q
INDUSTRIAL
Decrease
Slightly decrease
Similar
Slightly increase
Increase
1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase HOTELS1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase
12© 2018. For more information, contact Deloitte Consultores, S.A.
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%
Portuguese Real Estate Investment Survey – Outlook 2017
2017 Outlook | Real Estate market in Portugal [2/2]
Portuguese Real Estate Investment Survey
PROFITABILITY RATES FOR THE NEXT 3 MONTHSBY SECTOR OF ACTIVITY
RESIDENTIALRETAIL/
SERVICES
INDUSTRIAL HOTELS
13© 2018. For more information, contact Deloitte Consultores, S.A.
1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase
1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase
1st Q 2nd Q 3rd Q 4th Q
Decrease
Slightly decrease
Similar
Slightly increase
Increase
1st Q 2nd Q 3rd Q 4th Q
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%
Portuguese Real Estate Investment Survey – Outlook 2017
17© 2018. For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey – Outlook 2017
Contacts
Miguel Paiva Couceiro
Manager
Real Estate – Financial Advisory
Deloitte Portugal
Mob. +(351) 917 240 884
Tel. +(351) 210 422 500
Jorge Sousa Marrão
Partner
Real Estate Leader
Deloitte Portugal
Mob. +(351) 963 902 674
Tel. +(351) 210 422 503
Ricardo Reis
Partner
Real Estate - Tax
Deloitte Portugal
Mob. +(351) 964 736 261
Tel. +(351) 210 427 564
Inês Cintra Costa
Manager
Real Estate – Financial Advisory
Deloitte Portugal
Mob. +(351) 962 103 923
Tel. +(351) 210 422 500
Diogo Pires
Senior Manager
Real Estate - Tax
Deloitte Portugal
Mob. +(351) 964 837 258
Tel. +(351) 210 427 541
© 2018. For more information, contact Deloitte Consultores, S.A.
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