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EN_Investors briefing_Affordable Housing for Rent_SIL_LISBOA_20161005
- 2. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 2 • 7,000 housing units • 107 buildings • 621,000 m2 of gross construcSon area (mixed uses) • 867,000 m2 of land • 708 M€ of total private investment, operaSons from 3 to 300M€ • LocaSons can be subdivided into operaSons (or aggregated) to match investor requirements for scale. OperaSons can be sized from 3M€ to 300M€ • Pilot operaSons are expected to start in the last quarter of 2016 (announcement of public tenders), depending on potenSal tenders interest demonstraSon Program stats
- 4. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 4 Lisbon Metropolitan Area Decades of growth: Households, populaSon and housing units 1 005 671 Families - Lisbon Metropolitan Area, 1 147 775 1 281 891 Housing units Lisbon Metropolitan Area, 1 483 717 2 661 850 Population Lisbon Metropolitan Area, 2 821 876 0 500 000 1000 000 1500 000 2000 000 2500 000 3000 000 1960 1981 2001 2011 Sources: INE, CENSOS, in PORDATA
- 5. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 5 Lisbon stabilizaSon: populaSon and households in the recent CENSOS Housing units growing along the last decades 245 537 234 451 Families Lisbon , 243 892 200 449 288 481 Housing units Lisbon, 322 865 802 230 564 657 Population Lisbon, 547 733 0 100 000 200 000 300 000 400 000 500 000 600 000 700 000 800 000 900 000 1960 1981 2001 2011 Sources: INE, CENSOS, in PORDATA
- 6. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 6 Lisbon total available housing stock to rent decreased 60% since 2013 Avg. absorpSon Sme by the market: 4 months 91 903 2280 1965 4.52 0 1 2 3 4 5 6 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2010 2011 2012 2013 2014 2015 2016 Stock - New dwelings Closed contracts - new dwelings Stock - Used dwelings Closed contracts - used dwelings Take up time (months) Sources: Confidencial Imobiliário, SIR (2016)
- 9. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 9 • Designs the buildings and local ameniSes (projects) • Builds/rehabilitates according to the approved projects • Manages operaSons, maintenance and regular conservaSon works • Manages the relaSonship with the tenants • Collects the rents The private partner
- 10. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 10 • Provides municipal land/buildings for construcSon/rehabilitaSon • Finances the structural urbanizaSon works • Promotes the required public tenders to select the private partners • Promotes risk minimizaSon (eliminates uncertainty and spending Sme on obtaining construcSon permits, providing alternaSve means of dispute resoluSon with tenants, ajracSve locaSons,…) • Ongoing partnership contract control/audit The public partner (Lisbon Municipality)
- 12. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 12 • No land investment required • Higher profitability when compared with similar low risk and long-term stable income operaSons • A share of the gross construcSon area of each operaSon becomes the property of the private partner to ensure the required economic feasibility of each operaSon and the contracted IRR The ownership of autonomous plot(s) should be transferred to the private partner at an early stage of the operaSon • Long term contracts: 35 to 50 years • The private partner can trade his contract posiSon during the respecSve term Value proposiSon 1/3
- 13. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 13 • The plots/buildings for affordable housing will return to the Municipality at the end of the partnership contract • Rents annually updated by the Portuguese Consumer Price Index (ICP), without housing, published by EUROSTAT • The affordable housing operaSons are at 15 locaSons in Lisbon, well served by public transport, local commerce, public faciliSes and green areas. LocaSons can be subdivided (or aggregated) in operaSons to match investors demand requirements • Mix of rent prices: market prices for non-residenSal units and mix of housing affordable rents Value proposiSon 2/3
- 14. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 14 • PotenSal demand for affordable housing in Lisbon (esSmated >25.000 households for 2016-2019) i.e. about 5 Smes the present Program supply • Demand from tenants with middle-income thresholds, mixed age pornolio. • The private partner is responsible for the usual business risks (construcSon, infrastructure availability and demand) • Building permits or the respecSve preliminary feasibility agreement, are issued to the private partner/successful bidder at the same Sme as the adjudicaSon of the partnership contract. • Municipal tax exempSons to be approved by the City Assembly. • The VAT at 6% is applicable under certain condiSons. Value proposiSon 3/3
- 16. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 16 • Standard legal contract, regulated by Public Procurement Laws. • The land and buildings involved in the operaSon are owned by the Municipality during the partnership, although the investment in the respecSve works is private • VAT at 6% • No permits required for the construcSon works • A9er the construcSon works are completed the Municipality will transfer the ownership of a share of the plots to the Private Partner, to ensure the economic feasibility of the operaSon Concession of public works
- 17. Briefing on the Lisbon Affordable Rent Program, Dra9 version 2016-10-03, SIL 2016, Lisboa, Public Hearings to Real Estate Sector 17 Surface rights / lease model • Right to use the land with a contract that regulates the partnership, equivalent condiSons to those of the Concession of Public Works model • Buildings are financed and owned by the private partner, while the land is owned by the Municipality. • By the end of the partnership contract the buildings become the property of the Municipality • Default VAT at 23%; under certain condiSons VAT is at 6%. • Permits are required for the construcSon works besides compliance with regulaSons. • A9er the construcSon works are completed, the Municipality will transfer the property of some plots to the private partner, to ensure the economic feasibility of the operaSon