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
Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal
Real Estate Investments
4. 4
Family Office in Portugal Conference 24ᵗʰ September 2015 Four Seasons Hotel Ritz , Lisbon, Portugal
Real Estate Investments
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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. Thank You!
Family Office in Portugal
CONFERENCE
Gonçalo Nascimento Rodrigues
goncalonr@gmail.com
www.outofthebox.com.pt
out-of-the-boxthinking.blogspot.com