The stock market is "virtual" and only those who invest in the real economy will be able to resist the new global financial crisis. The warning is from many Investment Gurus, who manage funds worth billions of euros worldwide. These Gurus warn that the environment of huge flows of available money will change. "There will be far less money and investors will look for safe assets".
I think a good situation right now is not to have debt and invest in the real economy. Of course we're all going to feel the impact, but there's going to be a restart.
It is not yet in 2020 that the market will slow down
There is a sustained and healthy demand from investors, which is transversal to the different sectors, allowing various projects to be developed and transacted, from offices to housing, hotel and new concepts of 'living'. It will be a positive year for investment in hotels, which "could reach millions of euros". As many consultants say, "if everything in the pipeline were already closed, we would have achieved millions of euros in business today". The office segment will continue to be characterized by shortages. "There are 300,000 square meters of demand that will not be fulfilled in 2020. There's a lot of speculative office promotion missing. There will be a challenge to the creativity of the portuguese to find part of this demand.
Until the construction of the projects starts and the promoters are able to take on dates to complete the projects, it's very difficult to enter into leasing contracts. It is necessary to give "guarantees to the companies". I give you the case of an American multinational that had a project to employ a thousand people in Portugal and has the process standstill for lack of adequate spaces. By 2020, and after this epidemic is over, prices are expected to rise in Lisbon, especially in the riverfront area.
One of the segments with the greatest potential for growth will be student and senior residences. It is expected that in 2020, Portugal will have more than 60 thousand foreigners studying, with 15 thousand beds in pipeline in projects and approvals, but another 20 thousand will still be lacking, between Lisbon and Porto.
In retail, luxury stores and shopping centres will be the protagonists of the year 2021.
In Lisbon, the market is expected to be stirred up by the redevelopment of the Swiss pastry shop block in Rossio, which will impact the adjacent Praça da Figueira, "two squares in need of dynamism".
In Porto, "Av. dos Aliados will finally establish itself as a luxury brand destination".
The shopping centre market will see the inauguration of new retail parks by the end of 2020.
In housing, the great trend of the year will match the needs of the market. Homes for the Portuguese middle class will start to emerge more strongly. "The market is essentially local. Foreigners account for less than 10% of sales in Lisbon and Porto, and the Algarve will have a greater trend".
The Golden Visa is not the "bad wolf" of housing for Lisbon and Porto, despite what the government says. In Lisbon they represent less than 5% of homes sold and in Porto, until 2018, there were 37 Golden Visa. The Government and the City Council do not have a housing policy and therefore blame the Gold Visas. Of course it will have an impact on investors' perception of security, to conclude that there is a "high desire on the part of investors, both national and foreign, for alternative housing products, namely rental housing, senior residences and student residences, both in a development phase and as income assets".
Let's not be afraid, but optimistic.
Text: José Costa
- APFIPP - Associação Portuguesa de Fundos de Investimento, Pensões e Patrimónios;
- RANKIA – www.rankia.pt
- Jornal de Negocios
Image of Nattanan Kanchanaprat by Pixabay