Speaking to PropertyEU in an interview, CBRE’s head of Portugal Francisco Horta e Costa said that the broker itself currently €1.2 bn of assets under exclusivity or in due diligence, which gives high hopes for 2021 investment.

‘We entered 2021 with some very good dynamics and a good pipeline of investment deals, which amounts to around €2 bn,’ Horta e Costa said. ‘One of the reasons for this is that several transactions last year were put on hold because of the pandemic and instead of closing by year-end 2020 they will close in the first half of this year, but in general, we also see somewhat of a bullish market a strong interest from both national and international investors.’

Portugal closed 2020 with roughly €2.9 bn of property transactions, down 22% on the previous year. Even so, 2020 reported the third highest commercial real estate investment figure ever for the country. Offices, which last year represented roughly 37% of activity, will continue to be a major investment target this year, particularly in the case of core, well-let assets, while retail investment is expected to virtually nil this year and hotels are forecast to account for a larger share of total activity.

In terms of offices, CBRE just completed the acquisition of a €30 mln office building on Lisbon’s Avenida da República on behalf of UK investor Signal Capital Partners. The 12,000 m2 was put up for sale by Puaça - Administração e Gestão, a wholly owned subsidiary of oil and gas firm Sonangol.

In the hotel sector, the broker has been recruited to sell two hotels under development in the Portuguese capital, offering a total of over 400 rooms upon completion and is currently working on the sale of three other hotels, two of which are located in the Algarve. The sector is also expected to get a strong boost if a major hotel sale currently in the works effectively goes through. Earlier this month, PropertyEU reported that Portuguese private equity firm ECS has put a portfolio of roughly 20 Nau hotel properties in Portugal on the market for a price of over €1 bn.

Logistics however continues to be the sector with highest demand, although product remains scarce. CBRE in particular is expecting some sale and leaseback operations, as well as forward funding or forward purchase deals involving new build-to-suit developments. Logistics is also the only sector which experienced a rise in pricing last year (about 7%), versus negative movements for all other commercial property types and particularly retail, which saw prices drop by 4 to 14%.

Horta e Costa: ‘We anticipate that throughout 2021 core and core-plus investors will remain very active, although there may not be as many properties available for sale. On the contrary, with the worsening of the economic crisis and the weakening of the position of some owners, it is likely that there will be an increase in the offer of value add and opportunistic products. However, this situation will be highly dependent on the ability of the banking sector to either continue to support owners or to motivate them to sell, as well as on the willingness to finance buyers on interesting terms.’