2018 Q3
MARKET Pulse
Growth trend maintained through third quarter ● The third quarter had the best performance of the year, with a take-up of 57,454 sq m, reaching a total of 144,273 sq m YTD, 27% above the same period in 2017. This continued growth that has been felt in the last years is supported not only by the expansion of already established companies, but also by the growing perception of Portugal as a viable destination by several multinationals. ● The strong demand that is faced today is mainly towards high quality buildings with large areas, justifying the increase of the average occupied area to 902 sq m in the first 9 months of the year, compared with the 830 sq m registered at the end of 2017. The growing trend of coworking is also an important factor boosting demand in this type of spaces. ● The current vacancy rate is 8%. Vacancy is low and mainly of low quality. However, we see a robust pipeline taking shape, with over 690,000 sq m being added to the market in the next few years, 78,000 sq m of which will come in 2019.
Quarter Analysis Take-up
No of Operations
Average GLA
52
1,105 sq m
No of Operations
Average GLA
160
902 sq m
57,454 sq m Y-o-Y Growth: 62%
YTD Analysis Take-up
144,273 sq m Y-o-Y Growth: 27%
Main Transactions Building
Tenant
Zone
GLA (sq m)
Office Park Carnaxide
Coriant Portugal
6
8,487
Open
Teleperformance
3
7,779
António Pedro, 111
MMC
7
4,897
Torre Zenith
Mapfre
6
3,150
Barata Salgueiro 33
Willis Towers Watson
1
2,785
Source: JLL / LPI
Market Pulse Q3 2018 | 2
Take-up by Zone
Q1-Q3 2018 9%
Zone 1 - Prime CBD
16%
Zone 2 - CBD Zone 3 - New Offices Area 30%
12% Zone 4 - Historic & Riverside Zone
144,273 sq m
Zone 5 - Parque das Nações Zone 6 - Western Corridor 20% 10%
Zone 7 - Other Zones
3%
Vacancy Rate
Q2 2018
Zone 1
4.5%
Zone 2
7.0%
Zone 3
8.1%
6.1%
Zone 4
5.1%
Zone 5
2.4%
Zone 6
19.0%
Prime Rents
Q3 2018
25 21.0 20 € / sq m / month
17.0
17.5 16.0
16.0 14.0
15
10
5
0 Zone 1
Zone 2 Q3 2017
Source: JLL / LPI
Zone 3
Zone 4 Q2 2018
Zone 5
Zone 6
Q3 2018
Market Pulse Q3 2018 | 3
Lisbon Office Zones
Zone 1 - Prime CBD
Zone 2 - CBD
Zone 3 - New Offices Area
Zone 4 - Historic & Riverside Zone
Zone 5 - Parque das Nações
Zona 6 - Western Corridor
New Supply Q1 - Q3 2018
Source: JLL
Total GLA
No. of Buildings
34,193 sq m
8 Market Pulse Q3 2018 | 4
Total Pipeline
691,452 sq m
99,063 sq m
76%
Under Construction
Speculative
Buildings under construction Twin Towers Zone 3 Speculative
10,000 sq m Concl. Year: 2019
Quinta da Alagoa Zone 6 Speculative
6,525 sq m Concl. Year: 2019
Defensores de Chaves, 4 Zone 2 Speculative
4,000 sq m Concl. Year: 2019
Hub Creativo do Beato Zone 7 Speculative
30,000 sq m Concl. Year: 2019
FPM 41 Zone 1 Pre-let: PLMJ; KPMG
18,538 sq m Concl. Year: 2019
Exeo I Zone 5 Speculative
30,000 sq m Concl. Year: 2021
Source: JLL
Market Pulse Q3 2018 | 5
2018 Q3
MARKET Pulse
New experiences for a new consumer ● The existing pipeline of shopping centres maintains the focus on expansions, which often lead to remodelling and renovations of the interior spaces, seeking to increase the variety and quality of supply and revealing the fundamental need to keep up with current trends to provide better experiences to visitors. ● High street retail keeps reflecting a very high demand. Tourism continues to be the great drive, but the new Portuguese lifestyle is taking the locals further and further into the "street", where they can find a different offer from the one they traditionally find in shopping centres. ● Restaurants still dominate the openings in the prime zones, which is in line with the global trend.
Source: JLL
Chiado
Av. da Liberdade
Baixa
Príncipe Real
Cais do Sodré
Castilho Market Pulse Q3 2018 | 6
Prime Rents
Q3 2018
160 135
140
130
125
€ / sq m / month
120 100
85
80 60
45
40
45
30
20
11
0 Shopping Centres
Retail Parks
Chiado
Av. Rua Castilho Liberdade
Q3 2017
Q2 2018
Baixa
Principe Real
Cais do Sodré
Q3 2018
Shopping Centres
Q3 2018
Pipeline 2018 - 2019
Shopping Centres Stock
50,000 sq m
3,743,502 sq m
Main openings
Q3 2018
High Street Retail - Lisbon
Chiado Mano a Mano Degrau Carte d'Or H3 Go Natural Paleteria
Source: JLL
Cais do Sodré Sala de Corte Cantina Peruana
Principe Real Clube Lisboeta Steve Madden Sumaya
Baixa L'Eclair
Market Pulse Q3 2018 | 7
2018 T3
MARKET Pulse
Commercial real estate consolidation ● The investment in commercial real estate continues to register record levels having exceeded € 2.5Bn at the end of the 3rd Quarter, contributing to a y-o-y growth over 80%. The retail sector remains the most important sector of investment, followed by office and mixed-use developments. ● The investment volume has been driven by a diverse and increasing number of investors of different nationalities and profiles. During this year we have witnessed a market transition, which started at the end of the crisis with a more opportunistic profile and now takes a core and value-add profile. This trend comes from the consolidation of the market and the consequent perception of lower risk. ● Real estate investment is also more diversified, with more opportunities to invest in alternative sectors such as senior and student housing, hospitals, clinics, PRS and logistics. Parallel to the volume of commercial real estate investment, with strong dynamism, are the transactions of large real estate and NPL portfolios held by banks that have to comply with the European guidelines for reducing the ratio of these assets in their balance sheets.
Investment Volume Evolution 3,000 2,538 2,500 1,905
€M
2,000
1,764
1,500
1,305 927
845
1,000 704 393
500
318 188
127
2011
2012
0 2008
2009
2010
National
Source: JLL
2013
2014
2015
2016
2017
Q1 - Q3 2018
International
Market Pulse Q3 2018 | 8
Q3 2018
Top 3 Transactions Fidelidade Portfolio
Almada Forum
Quinta da Fonte
Buyer: Apollo Price: > € 410 M GLA: 255,000 sq m Sector: Office, Retail, Residential
Buyer: Merlin Properties Price: € 407 M GLA: 60,000 sq m Sector: Retail
Buyer: Signal Capital Price: € 50 M GLA: n.d. Sector: Office
Investment Volume by Sector
Q1 - Q3 2018
22%
24%
Office
Retail 4% I&L
Others 50%
Prime Yields Evolution 9.50 9.00 8.00
8.00
%
7.50
6.25
6.00
6.50
6.75 6.25
5.50 4.50
Office
5.00 4.75 4.25
Shopping Centres
2007 - Min
Source: JLL
Retail Parks
2012 - Max
High Street Retail Lisbon
Industrial & Logistics
Q3 2018
Market Pulse Q3 2018 | 9
2018 Q3
MARKET Pulse
Another quarter with growth activity ● In the 3rd quarter the residential market kept the growth trend with very positive numbers and new projects coming to the market, with the pipeline showing no sign of slowing down. Despite the new supply, the house prices in the 3rd quarter continued to grow in Lisbon with emphasis in the prime zones of Avenida da Liberdade, Riverside and Campo de Ourique. ● Some developments should be highlighted, such as The Bivart Residences, which has recently sold the last unit with all apartments sold in just 7 months, and the new launch of D.Luís Praça, in the Riverside Zone which will have 37 apartments. ● Once again, the quarter registered further diversification of nationalities buying home in Lisbon, such as Turkey and Switzerland. Brazilian, English and French buyers remain the main buyers.
TOP 3 Foreign Buyers
1º Brazil (25%) 2º United Kingdom (15%) 57% International
3º France (13%)
39 Nationalities
Evolution of Apartments Sold Lisbon Metropolitan Area 53,662 44,311
42,751 37,679
35,317 30,879 27,546 21,352
2009
2010
2011
2012
24,251
2013 Used
Source: JLL
26,938
2014
2015
2016
2017
S1 2018
New Market Pulse Q3 2018 | 10
TOP 3 Developments
Q3 2018
POP Saldanha
The Bivart Residences
Douradores 168
Zone: Avenidas Novas Developer: OISE - Civilria 64 Apartments 98% sold in 6 Months
Zone: Avenidas Novas Developer: OISE - Invest. e Gestão 31 Apartments 100% sold in 7 Months
Zone: Baixa Developer: Cais d'Espirais 12 Apartments 92% sold in 7 Months
Prime Residential Zones in Lisbon
Q3 2018
Prime Value
Source: JLL
Chiado
€ 6,500 - 9,500
Avenida da Liberdade
€ 7,500 - 10,000
Príncipe Real
€ 6,500 - 8,000
Historic Zone
€ 5,000 - 7,000
Lapa / Estrela
€ 5,000 - 6,500
Riverside Zone
€ 5,000 - 6,500
C. Ourique / Amoreiras
€ 4,500 - 6,000
Avenidas Novas
€ 5,000 - 6,500
Colina de Santana
€ 4,000 - 5,500
Restelo / Belém
€ 4,500 - 6,000
Parque das Nações
€ 3,500 - 5,500
Estoril / Cascais
€ 5,000 - 12,000 Market Pulse Q3 2018 | 11