Vic Properties is in discussions with a number of investment banks to advise on an initial public offering planned for early next year, according to Chief Executive Officer João Cabaça.
‘This is an important strategic decision,’ Cabaça tells PropertyEU. ‘At the moment there is not a single development company active in Portugal which is listed. If you are an investor or asset manager and you want to get exposure to the Portuguese market you have to buy a property directly. I think today especially, at a time when many investors are discovering Portugal, a listing can provide an interesting proposition for clients such as pension funds and asset managers.’
The company, a major residential developer in Portugal with a pipeline reflecting a gross development value of €1.3 bn, is deciding on the right venue for the operation which Cabaça says will also be conditional on market conditions. ‘We are currently discussing the amount to be raised. We don’t want to do something too small but nothing too large as well. We want to get enough liquidity to finance a number of pipeline projects that we are currently looking at.’
In May of this year, the company was the first Portuguese development company ever to issue a €250 mln bond. The senior secured convertible facility with a maturity of six years was subscribed by investors in the US, Asian and the UK. ‘I think this also gives an idea of the geographies of investors that could participate in our listing,’ adds Cabaça, who previously worked for HSBC, specialising in M&A and in high-yield credit trading.
The company is owned by its management and focuses on delivering primary residences to the Portuguese market. Current projects include Prata Riverside Village, a 128,000 m2 residential project that is under construction in Lisbon, alongside the Matinha Project, a 250,000 m2 brownfield site also in Lisbon. ‘However,’ adds Cabaça , ‘We are now looking at Porto and the Algarve. Porto is clearly attracting quite a bit of investment and particularly foreign capital, so it is definitely an interesting market.’
Construction of new residential units remains close to a 15-year low in Portugal largely owing to under-capitalised local developers. As a result, demand has outstripped supply for the past years and house prices have steadily increased. ‘We aim to achieve large development projects addressing local needs,’ Cabaça says. ‘If we look at the market right now, there are mostly very small, family-run developers. The few international developers active in the country are largely focused on the high end spectrum of the market. Our target is to fill the gap that exists in the market by offering primary residences of institutional quality.’