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Real estate investment triples in the first quarter

Real estate investment triples in the first quarter
Vida Imobiliária · 30 Apr 2020

Investment in commercial real estate practically tripled in the first quarter of the year compared to the same period last year, in a total of 1,470 million euros.

This is what highlights the JLL Market Pulse, now released, according to which the arrival of the Covid-19 pandemic in March did not affect the figures for the quarter.

During this period, several operations were completed, which were already in an advanced stage of completion when the virus appeared in Europe, at the end of February. Retail accounted for 55% of the total volume invested, and hospitality for 26%, with emphasis on the sale of 50% in the Sierra Prime position in a portfolio of 6 shopping centers, or the sale of the Real Hotels portfolio.

The office segment accounted for a 17% share, with an emphasis on the sale of the PREOF portfolio, with 52,000 sq. mt.

Pedro Lancastre, general director of JLL Portugal, explains that "the real estate market started the year with such robustness that the slowdown in activity in the last 15 days of March due to the pandemic, did not impact the positive performance of the quarter. This is already a positive starting point for the post-Covid-19 recovery, which we believe will begin to take shape from the third or, at the limit, the fourth quarter” of this year.

On the other hand, he warns that "we must be aware that the consequences of the current situation are yet to be felt. It is undeniable that the coming months will have significant slowdowns both in terms of investment and occupancy levels, as well as in the times of doing business. At the same time, the sector will have to deal with new challenges that will require the market to adapt. This is the case with teleworking, which imposed itself in a disruptive way due to the pandemic, but which is certainly a trend that will affect the future of real estate. The greater use of technology and digital channels in the sale of real estate also came to impose itself in this context and will continue”.

In this period, office occupation increased by 7%. The note is also positive with regard to housing. Considering the universe of sales made by JLL, the trend is for robust growth, according to the consultant. Retail also recorded good levels of activity in the quarter's aggregate.

Pedro Lancastre concludes that "even in these adverse times of global strike, we have feedback that investors and buyers, both domestic and foreign, maintain a high interest in Portugal. They are aware that we are going through a complex situation, but they see it as temporary, and that it is an evil that affects everyone on a global scale. It is not exclusive to our country”.

He is convinced that "investment will return and business will resume in the second half of the year. Portugal has made a very solid path of international positioning in the last decade, which will not be canceled by this virus”.