The interest of foreign investors in the country continues to gain momentum and tourism real estate remains at the top of the most attractive businesses for those looking for opportunities in Portuguese territory. Two months before the year-end closing, investments in hotels are expected to amount to 680 million euros, Cushman & Wakefield reveals to Dinheiro Vivo.
The consultancy firm has revised downwards the estimates announced in the first half of the year, which estimated an investment of 720 million euros.
The timing of the completion of some projects, which was ultimately pushed back to next year, is the reason given for this adjustment in values. On average, the value per transaction in 2023 will be 44 million euros per transaction. For 2024, the forecast now points to 436 million euros.
“Despite the downgrade, hotel investment activity can be considered robust, especially compared to other asset classes. Healthy hotel activities with record indicators continue to arouse interest among investors, but the prospects of asset appreciation are one of the main reasons why there are no more transactions in number and volume,” explains Gonçalo Garcia, head of catering of the advisor.
In the third quarter, CBRE added, the sale of a dozen hotel units was completed, focusing on the portfolio of six Dom Pedro hotels to the Arrow Global group, which represented the largest hotel activity of the year. Last year, until September, the investment volume in hotels amounted to 325 million euros, about 40% less than this year’s volume, which exceeds 400 million euros.
“With the exception of the Dom Pedro hotels, no portfolio transactions of relevant size are expected this year, as was the case last year (Project Crow). The market remains quite dynamic due to excellent operational performance,” says Duarte Morais Santos, hotel director at CBRE Portugal.
As for the profile of the investor looking at Portugal, the head of hotel consultancy from JLL Portugal explains that there are no changes. There are changes in investment strategies “that adapt to market conditions.” “At this stage, value-added properties in Portugal’s main tourist areas are the most desired product. Given the stabilization of construction costs and the lack of trading assetssome investors are considering looking at development products for new tourism projects, but at this stage the fact is that they have a PIP [Pedido de Informação Prévia] approved is no longer a sufficient condition. The fact that they have the right license makes a difference in their attractiveness,” explains Karina Simões.
The expert believes that the biggest challenge when investing in these types of assets is finding the “right product at the adjusted market value”. “There is a lack of product on the one hand and a significant gap between the two on the other asking price assets and their effective value. In fact, the two are linked to such an extent that performance from an operational perspective is so favorable that owners will only consider selling if they have a proposition that appeals to them,” he adds.
According to the national hotel market, 44 new hotels have already opened their doors this year, with a total of 2,760 rooms. The majority of openings took place in the Lisbon metropolitan area (15), followed by the north (12), the center (7), the Alentejo (4), the Algarve (3), the Azores (2) and Madeira ( 1). Three more units, equivalent to 200 rooms, are expected to open by the end of December. Next year, 60 new hotels are expected to open, with a total of 4,920 beds.
End of low-impact golden visas
Portugal continues to fall into the good graces of foreign investors and even the brakes on golden visas have not stopped the appetite of new buyers. Karina Simões states that the end of the measure ultimately had more impact on the housing market than on the hotel market. “Some hotel investors who had the origins of their business in golden visas are quickly adapting to this new situation and continuing to be successful in their projects.”
Gonçalo Garcia, of Cushman & Wakefield, adds that it is “the sustainability of players more recent and less prepared for change’, which emerged more entrenched and argues that even if the impact is not so great, the brake represents a disadvantage for the country. ‘We compete in a global market and, of course, if there are others In countries with a value proposition similar to that of Portugal, with conditions that can attract resources, personnel and capital in a more attractive way than us, we will lose our advantage, and above all, we will squander the consistent work to improve competitiveness that has been done in recent years. over the past ten years,” he says.
CBRE representative Duarte Morais Santos explains that “it is still too early to assess the impact of both the end of the golden visas and the RNH crisis. [Regime Fiscal do Residente Não Habitua]Yet he has no doubt that “the legislative uncertainty in our country requires investors to be extra cautious in their approach.”
Source: DN
