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My Invest Porto.

Investors remain optimistic about the Portuguese market after Covid

Investors remain optimistic about the Portuguese market after Covid
Diário Imobiliário · 23 Jun 2020

"The Investor's Perspective, the Pre- and Post-Covid19 Analysis”, is the focus of the consultant's study that aimed to outline a scenario of the possible impacts of the pandemic on retail and office real estate as investment assets, in addition to including a round of issues made at the beginning of the year, before confinement.

Fernando Ferreira, Head of Capital Markets at JLL, says that "if this feeling of optimism continues to prevail among investors, it is a clear proof of Portugal's attractiveness as an investment destination, which is especially important at a time when the pandemic imposed a global brake on markets and where investors' liquidity levels remain high. In the context of returning to normality, all markets will want to go to the game to capture a slice of that liquidity and I believe that Portugal will be extremely well-positioned”.

Even so, the uncertainty brought about by the current pandemic associated with an expectation of downward adjustment in incomes anticipates an increase in yields in both segments. 73% of investors believe that office yields will increase in the short term, while in retail this is the opinion of 69% of respondents. It is recalled that in the 1st quarter of 2020, the offices raised around 247 million euros of investment (17% of the total) and the retail 798 million euros (55% of the total).

In terms of occupation, investors expect the return to normality to happen as early as 2021, with most believing it will take more than 12 months. Porto will continue to receive investor confidence, 89% indicating they intend to invest in this market.

Fernando Ferreira argues that "despite the undeniable impacts on the operation and the returns generated by investment assets, the estimated losses are not very significant and are a reality that cuts across all markets in Europe. In addition, Portugal is seen as having political, social, and economic stability, increased security even in public health, in addition to returning more stable returns. Therefore, not only do we not see investors changing their investment strategies for our market, choosing to wait for the Covid-19's impact to soften, but I even believe that the national market may be strengthened as a safe destination for international investors”.