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Real Estate Investments

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Presentation made in the Family Office Conference held in Lisbon in 24th September

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Real Estate Investments

  1. 1. Gonçalo Nascimento Rodrigues goncalonr@gmail.com www.outofthebox.com.pt out-of-the-boxthinking.blogspot.com Family Office in Portugal CONFERENCE Real Estate Investments
  2. 2. 2 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Security Real Assets Increasing value Ability to leverage Real Estate Investments Stability over the long term
  3. 3. 3 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Real Estate Investments
  4. 4. 4 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Real Estate Investments
  5. 5. 5 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Real Estate Investments Portugal House Price Index
  6. 6. 6 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Presentation Framework 1 2 3 How/Why invest in Real Estate? The Real Estate Market in Portugal Invest in Portugal?
  7. 7. 7 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments How/Why invest in Real Estate?  Drivers:  Diversification;  Tax Efficiency;  Hedging;  Risk / Return optimization. 1
  8. 8. 8 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments How/Why invest in Real Estate?  Direct investments – commercial real estate, development;  Indirect investments – acquiring units from investment vehicles. 1
  9. 9. 9 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments How/Why invest in Real Estate?  Investment Vehicles  Real Estate Funds;  Real Estate Investment Trusts;  Sicav, Sicaf;  Other type of vehicles, more complex structures. 1
  10. 10. 10 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments How/Why invest in Real Estate?  Family Offices tend to invest:  Directly;  In income producing properties;  Core and opportunistic investments;  Low leverage;  Long term positions;  Focus on fundamentals:  Eye on location;  “Quality” of the tenant;  Rental contract length.  Properties with higher yields. 1
  11. 11. 11 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Commercial Real Estate Investment near all-time high  Investments, nowadays, are financially driven;  Lack of attention to fundamentals. 2
  12. 12. 12 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Residential prices and sales climbing  ARI gave an important boost to the market;  Credit still scarce and expensive. 2
  13. 13. 13 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Commercial Real Estate Investment growing Source: C&W 2
  14. 14. 14 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Office rents at all-time low Source: Workx 2
  15. 15. 15 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Prime Yields at all-time low 4,00% 5,00% 6,00% 7,00% 8,00% 9,00% 10,00% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H1 2015 Offices Logistics Shopping Centre Retail Hihgstreet Source: B. Prime, CBRE 2
  16. 16. 16 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal Source: Out of the Box 0,00 0,50 1,00 1,50 2,00 2,50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Rents vs. Investment* Average Rents Index CommercialREInvestment Index *Regards to the Lisbon office market  Disruption between rents and investment, or, fundamentals and financial drivers 2
  17. 17. 17 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal -4,0% -3,0% -2,0% -1,0% 0,0% 1,0% 2,0% 3,0% 4,0% 0 200 400 600 800 1 000 1 200 1 400 1 600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Commercial RE Investment and yield spread vs. OT Investment Spread  How yields affect real estate investments 2 Source: Out of the Box
  18. 18. 18 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Potential upside through rental growth 2
  19. 19. 19 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Effects on prime rent through yield variation 18,0 19,5 21,0 22,5 24,0 14,0 16,0 18,0 20,0 22,0 24,0 26,0 6% 6,50% 7% 7,50% 8% €/sq.mt. Prime Yield 2
  20. 20. 20 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Residential prices and sales recovering 2 Source: Statistics Portugal 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000 75,00 80,00 85,00 90,00 95,00 100,00 105,00 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014 2Q2014 3Q2014 4Q2014 1Q2015 Portugal Residential Index Prices Sales
  21. 21. 21 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Golden Visas (ARI’s) gave an important boost 2 494 1 526 443 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2012 2013 2014 2015 Nº of Golden Visas Granted Source: SEF 2
  22. 22. 22 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Golden Visas (ARI’s) on a slow move Source: SEF 1,154 1,208 1,253 1,301 1,305 1,325 1,33 1,35 1,05 1,1 1,15 1,2 1,25 1,3 1,35 1,4 Jan Feb Mar Apr May Jun Jul Aug Amount invested in RE through ARI's (€ Bll) 2
  23. 23. 23 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Housing loans still scarce and expensive Source: Bank of Portugal 2 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 jan/04 jun/04 nov/04 abr/05 set/05 fev/06 jul/06 dez/06 mai/07 out/07 mar/08 ago/08 jan/09 jun/09 nov/09 abr/10 set/10 fev/11 jul/11 dez/11 mai/12 out/12 mar/13 ago/13 jan/14 jun/14 nov/14 abr/15 Montlhy housing loans (€ Million)
  24. 24. 24 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments The Real Estate Market in Portugal  Housing loans still scarce and expensive Source: Statistics Portugal 2 0 50 100 150 200 250 300 350 mar/08 jul/08 nov/08 mar/09 jul/09 nov/09 mar/10 jul/10 nov/10 mar/11 jul/11 nov/11 mar/12 jul/12 nov/12 mar/13 jul/13 nov/13 mar/14 jul/14 nov/14 mar/15 BasisPoins Average Spread Housing Loans
  25. 25. 25 Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal Family Offices Real Estate Investments Invest in Portugal?3 Commercial Real Estate Residential Hotels / Tourism “Alternative” Investments • Offices / High street retail; • Some logistic operations; • Corporate Sale & Leaseback; • Focus on fundamentals; • Eye on rents; • Prime locations. • Buy-to-let Lisbon outskirts; • High-yield. • 4 and 5 star Hotels in Lisbon and Oporto. • Student Accommodation; • Senior Living.
  26. 26. Thank You! Family Office in Portugal CONFERENCE Gonçalo Nascimento Rodrigues goncalonr@gmail.com www.outofthebox.com.pt out-of-the-boxthinking.blogspot.com

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