Portuguese Real Estate Investment Survey Outlook 2017 A turnaround for Portuguese real estate

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1 Portuguese Real Estate Investment Survey Outlook 2017 A turnaround for Portuguese real estate

2 Outlook 2017 Preface The Portuguese Real Estate Investment Survey is a quarterly tool that analyses the perception of a selected panel of participants who work daily in the Portuguese real estate sector. With the launch of the Outlook 2017 edition we aim to compile and evaluate the evolution of this perception throughout the year 2017, allowing the players of the sector to have a systematized picture of this period, which has demonstrated a huge positivism for our country. We look forward to continuing to contribute with useful and up-to-date tools that enhance a better understanding of the real estate industry nationwide. We are at your entire disposal to discuss any relevant question. Carefully, Jorge Sousa Marrão Partner Real Estate Leader Jorge Marrão Portuguese Real Estate Investment Survey Outlook 2017

3 2017 Outlook 3

4 2017 Outlook KEY MESSAGES REAL ESTATE STRATEGY FOR 2017 INVESTMENT STRATEGY DIVESTMENT STRATEGY The investment strategy has increased its representativeness throughout the year. The portfolio management strategy, although representative, presented a downward trend in the players' strategic options, together with the divestment strategy Para informações, contacte Deloitte Consultores Throughout 2017, the Value Added demonstrated to be the type of assets with the greatest potential for investment. Core assets came next, although with a decreasing trend. Banks stood out as the main business feeders in the acquisitions of real estate assets. The origin of the capital was mainly European. Greater easiness of fundraising and a shorter duration of asset acquisition processes were perceived. Core assets were and will be the target of further divestment by industry players. Throughout the year, the importance of Funds of Funds as the main real estate investors in Portugal was highlighted, as well as the growth of the Insurance Companies. The origin of the investors was mainly European. A stabilization in fundraising and a reduction in the length of asset disposal processes were perceived. During 2017, there was an increase in volume and sales prices, mainly in the residential, retail / services and hotel sectors. After a take-off with decreasing profitability rates, a later stabilization were perceived in the four sectors under analysis (residential, retail / services, industrial and hotel). Portuguese Real Estate Investment Survey Outlook

5 2017 Outlook REAL ESTATE STRATEGY FOR st QUARTER 2 nd QUARTER 3 rd QUARTER 4 th QUARTER 33% 32% 28% 38% 41% 31% 27% 44% Divestment Divestment Divestment Divestment Portfolio management Portfolio management Portfolio management Portfolio management Investment Investment Investment Investment For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey Outlook

6 Investment strategy 6

7 2017 Outlook Investment strategy [1/3] INVESTMENT STRATEGY CURRENT INVESTMENT STRATEGY FUTURE INVESTMENT STRATEGY FUNDERS/ BUSINESS FEEDERS 69% 62% 52% 52% 41% 32% 32% 44% 31% 31% 31% 52% 41% 32% 19% 27% 38% 44% 52% 52% 38% 14% 41% 38% 27% 31% 14% 9% 13% 6% 1º T 2º T 3º T 4º T 1º T 2º T 3º T 4º T 1º T 2º T 3º T 4º T Value added Value added Banks Insurance companies Opportunistic deals Opportunistic deals Fund of funds Sovereign funds Core Core Pension funds For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey Outlook

8 2017 Outlook Investment strategy [2/3] INVESTMENT STRATEGY ORIGIN OF CAPITAL North America Europe 48% 27% 63% 19% 81% 73% 75% 69% 1 st Q 2 nd Q 3 RD q 4 th Q 1 st Q 2 nd Q 3 rd Q 4 th Q Asia South America 31% 5% 14% 6% 13% Middle East 14% 18% 6% 1 st Q 2 nd Q 3 rd Q 4 th Q For more information, contact Deloitte Consultores, S.A. 1 st Q 2 nd Q 3 rd Q 4 th Portuguese Real Estate Investment Survey Outlook 2017 Q 5

9 2017 Outlook Investment strategy [3/3] INVESTMENT STRATEGY FUNDRAISING APPROACH IN THE LAST 12 MONTHS FUNDRAISING APPROACH FOR THE NEXT 12 MONTHS LENGHT OF AQUISITION PROCESS 91% 64% 43% 45% 44% 52% 44% 55% 57% 55% 56% 33% 31% 27% 34% 35% 38% 24% 31% 24% 9% Difficult Neutral Easy For more information, contact Deloitte Consultores, S.A. 13% 10% 9% 9% 14% 14% 18% 15% 5% 5% 0% 0% 0% Up to 3 months Difficult Between 3 to 6 months Neutral Between 6 to 12 months Easy More than 12 months Portuguese Real Estate Investment Survey Outlook

10 Divestment strategy 10

11 2017 Outlook Divestment strategy [1/3] DIVESTMENT STRATEGY CURRENT DIVESTMENT STRATEGY FUTURE DIVESTMENT STRATEGY MAIN REAL ESTATE INVESTORS 60% 52% 52% 43% 38% 41% 23% 32% 33% 27% 32% 38% 19% 19% 27% 18% 18% 40% 43% 40% 40% 21% 21% 10% 10% 9% 14% 0% Value added Value added Sovereign Funds Insurance Companies Opportunistic deals Opportunistic deals Funds of Funds Banks Core Core Pension Funds For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey Outlook

12 2017 Outlook Divestment strategy [2/3] DIVESTMENT STRATEGY ORIGIN OF INVESTORS North America Europe 52% 23% 57% 40% 71% 77% 86% 80% 1 st Q 2 nd Q 3 rd Q 4 th Q Asia South America 33% 45% 70% 10% 18% 7% Middle East 19% 23% 21% 1 st Q 2 nd Q 3 rd Q 4 th Q For more information, contact Deloitte Consultores, S.A. 1 st Q 2 nd Q 3 rd Q 4 th Portuguese Real Estate Investment Survey Outlook 2017 Q 9

13 2017 Outlook Divestment strategy [3/3] DIVESTMENT STRATEGY FUNDRAISING APPROACH LAST 12 MONTHS FUNDRAISING APPROACH NEXT 12 MONTHS LENGHT OF SELLING PROCESS 58% 60% 68% 70% 40% 26% 28% 21% 40% 35% 37% 31% 16% 43% 16% 11% 21% 10% 5% 16% 7% 0% 0% 0% Difficult Neutral Easy Difficult Neutral Easy Up to 3 months Between 3 to 6 months Between 6 to 12 months More than 12 months For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey Outlook

14 Real Estate market in Portugal 14

15 2017 Outlook Real Estate market in Portugal [1/2] VOLUME AND SALES PRICE FOR THE NEXT 3 MONTHS BY SECTOR OF ACTIVITY 45% 55% 61% 64% 70% RESIDENTIAL 33% 34% 15% 33% 28% 10% Decrease Similar Increase Slightly decrease Slightly increase RETAIL/ SERVICES 33% 22% 6% 14% 0% Decrease Similar Increase Slightly decrease Slightly increase INDUSTRIAL For more information, contact Deloitte Consultores, S.A. 65% 64% 40% 40% 38% 5% 6% 7% 6% Decrease Similar Increase Slightly decrease Slightly increase HOTELS 60% 55% 56% 22% 14% 10% 22% s 7% Decrease Slightly decrease Similar Slightly increase Increase Portuguese Real Estate Investment Survey Outlook

16 2017 Outlook Real Estate market in Portugal [2/2] PROFITABILITY RATES FOR THE NEXT 3 MONTHS BY SECTOR OF ACTIVITY 70% 58% RESIDENTIAL 45% 44% 40% 33% 35% 21% 40% 10% 11% 8% 10% 6% 6% Decrease Similar Increase Slightly decrease Slightly increase RETAIL/ SERVICES 44% 35% 28% 21% 28% 5% 21% 10% Decrease Similar Increase Slightly decrease Slightly increase 61% 79% 60% 45% 33% 5% 6% 14% 7% 10% 35% 35% 22% 22% 5% 11% 21% 7% INDUSTRIAL Decrease Similar Increase Slightly decrease Slightly increase For more information, contact Deloitte Consultores, S.A. HOTELS Decrease Similar Slightly decrease Slightly increase Portuguese Real Estate Investment Survey Outlook

17 Contacts Jorge Sousa Marrão Partner Real Estate Leader Deloitte Portugal Mob. +(351) Tel. +(351) Ricardo Reis Partner Real Estate - Tax Deloitte Portugal Mob. +(351) Tel. +(351) rreis@deloitte.pt Inês Cintra Costa Manager Real Estate Financial Advisory Deloitte Portugal Mob. +(351) Tel. +(351) incosta@deloitte.pt Diogo Pires Senior Manager Real Estate - Tax Deloitte Portugal Mob. +(351) Tel. +(351) dpires@deloitte.pt Miguel Paiva Couceiro Manager Real Estate Financial Advisory Deloitte Portugal Mob. +(351) Tel. +(351) micouceiro@deloitte.pt For more information, contact Deloitte Consultores, S.A. Portuguese Real Estate Investment Survey Outlook

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