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235 M€ to manage Oporto’s historic centre

In this month’s issue of Vida Imobiliária

The Oporto municipality has completed a management plan for the city’s historic centre. The plan includes ten different initiatives involving 83 city blocks and will cost an estimated 235 million euros (M€). The plan was disclosed on 5 December, on the 12th anniversay of the declaration of Oporto’s historic centre as world heritage. Speaking at the ceremony, Oporto’s mayor Rui Rio invited private operators to get involved in the endeavour, explaining that «there isn’t enough money in the municipal budget to pay for the rehabilitation of Oporto’s Baixa». According to information supplied by Rui Loza, an architect and member of the Board of Directors of Porto Vivo, SRU, «there are currently 1,796 buildings in Oporto’s historic centre, of which 433 are in good condition,

At the end of 2008, Vida Imobiliária presents for the first time a series of articles on sustainability in the property market. The newsletter reports on several national and international case studies, discussing innovation and best practices in companies and developments across a range of market sectors including retail, offices, industrial, logistics, housing and residential tourism. On the eve of the entry into force of the first and last stage of the legislation on energy certification, Vida Imobiliária interviewed officials at ADENE who provided additional clarification on what will change in January. The newsletter will also features a survey of some of the major companies operating in the field of energy certification in Portugal. Bio-climatic architectural design, microgeneration, rational use of water, indoor air quality, recyclable materials, etc. are some of the major trends in the property market discussed in a special article on the topic. The newsletter also carries interviews with representatives from Tirone Nunes, Home Energy and DeViris, three Portuguese companies operating in this market that have played an important role in the implementation of energy-saving, sustainable solutions in various developments. The December issue of Vida Imobiliária also covers IPD’s new environmental code that was officially disclosed in Portugal at a conference jointly organised by Imométrica and ADENE. In this month’s Forum section, we ask professionals whether the Portuguese market is ready for the entry into force of the latest energy certification legislation. Other topics of interest in December’s Vida Imobiliária are a two-page report on sustainability in the VI News section. The section Beyond the Property Market carries an interview with the director of d Reynaers and in Services there are several brief news on related topics. The new director-geral of Aguirre Newman in Portugal, Paulo Silva, writes about the market in Point of View. The Events section covers the 20th anniversary of Fórum Confidencial, which coincided with the presentation of the new ICI index for the Lisbon commune. As usual, statistical information drawn from LPI and Confidencial Imobiliária sources and legal tips by Úria Menendez complete this edition.

649 are in a resonable state of conservation, 575 are decaying, 51 are undergoing rehabilitation and redevelopment works and 78 are in ruins». A major concern for the municipal authorities, according to Loza, «is the fact that most of these buildings are private property». Oporto’s mayor did not set any

specific time schedule for a full rehabilitation of the city’s historic centre, explaining that «this is a project for a generation» and adding that «within 5 to 6 years we should have been able to rehabilitate and redevelop a significant part of Oporto’s Baixa and to attract more people to come and live in it».

Real Vila Formosa should be launched in 2011 The new development being planned by the Bernardino Gomes group and Real hotels for Vila Nova de Mil Fontes, on the Alentejo coast, should begin to take form in 2011. Celestino Morgado, one of the group’s directors, explained that «the project is currently in its approval and prior information stage. We are confident that



we will get the necessary permits next year and we look forward to start building within two and one half years». According to the group’s director «the development will be the first luxury resort to be built in the area» and will cost an estimated 200 M€. The reort will be located to the south of Vila Nova de Mil Fontes and will feature a 3 km-long

sea front as well as a 6 km river front. The total area of the development is 708 ha but the resort will display «a low construction density of about 100,000 m²». It will include «several units including a 5-star hotel (200 rooms), a country-style hotel (50 rooms), villas and apartments», as well as «several leisure facilities, including a golf course».




Global Shopping does business in the Ukraine The Portuguese company Global Shopping is internationalising its activities and has recently entered the Ukrainian property market where it has identified investment options in the country’s major cities as well as established contacts with key players. Global Shopping provides services in the area of procurement to national and international groups and investment funds operating in the property industry and seeking to purchase land or developing projects for the residential, retail, office, logistics, hotel and mixused markets.

Imoholding has projects worth 300 million euros Developers Imoholding have currently more than 30 developments to place on the market. Together, they represent a portfolio of about 300 million euros accross all sectors of the property market. The company plans to sell these assets to other developments and investment funds, whther Portuguese or international. Imoholding’s core business is the purchase of land, the establishment of plots, their licensing and carrying out infra-structural work thereon with a view to selling such properties. «It is not our policy to hold on to such assets. We want to sell our projects and generate capital», said Joel Santos, one of the company’s directors.

Manuel Aires Mateus will rehabilitate Parque Mayer Architect Manuel Aires Mateus has won the competition for the rehabilitation of Parque Mayer. The competition had been launched by the Lisbon municipality to select the best conceptual project for one of Lisbon’s most famous sites requiring rehabilitation. Aires Mateus’s project is aimed at giving a new lease on life to Parque Mayer. The project will feature a total built area of 32,000 m² and is expected to extend the Botanical Gardens to the former enclosure of Lisbon’s vaudeville theatres (revista à portuguesa). Mateus’s project will also include a hotel, several restaurants and two theatres, one of which will result from the rehabilitation and redevelopment of the well-known Teatro Capitólio, as well as other infrastructures and amenities. Aires Mateus plans to link the city to Parque Mayer by building a square around the Capitólio theatre , as well as designing several new streets. «The whole area will be for pedestrians only», he said, adding that because the area lies on a slope, a modicum of mechanical means, such as escalators and lifts, will be used to help pedestrians circulate between Rua da Alegria and Rua da Escola Politécnica.

PÁG. 2

Retail Rents grow in global strategic high street retail destinations According to CB Richard Ellis’ (CBRE) latest Global Retail Rents Survey, retailers are focusing on some of the major global fashion capitals, pushing rents in the world’s most expensive high street retail locations even higher. Some smaller and secondary retail cities continue to see strong levels of growth, however global fashion capitals such as Hong Kong, London and Los Angeles now sit alongside these markets, whilst simultaneously claiming some of the most expensive retail rents in the world. Despite deteriorating economic conditions, the retail sector has to date continued to perform relatively well. Half of the markets surveyed saw retail rental growth in the past year (ending Q3 2008), with 65% of those seeing increases over the last six months. New York’s 5th Avenue remains the world’s most expensive high street retail destination, followed by Hong Kong, the second most expensive location. Also making the top five are Moscow, London and Tokyo. Demand is coming from retailers that are performing well in the current market – such as luxury brands – but also from retailers who are reining in wider expansion plans in response to weakening consumer spending and focusing on longer-term strategic locations as opposed to new destinations. Although rents have risen in many key cities, the slowdown in consumer demand has inevitably struck some retail markets around the world resulting in falling rents. In cities such as Tokyo and Madrid, where rents fell by 5% in the past six months, retailers are now beginning to take advantage of their covenant strength and landlords are becoming more open to rental negotiations. In Portugal, high street retail has experienced some difficulties to establish as a major successful retail format, in a market where shopping centres are clearly prominent. Indeed, an inefficient lease law, the scarcity of good and well dimensioned supply in prime locations, as well as the lack of common policies of management and marketing, are some factors that have been limiting its performance. However, demand has been growing, with new retailers entering the Portuguese market, especially in well established high street retail zones, such as Avenida da Liberdade and Chiado. The maturity of other retail formats in Portugal has been contribuiting to the resurgence of high street retail, even though no Portuguese city ranks in the Top 50 most expensive high street retail destinations. Prime rental values in Lisbon stand at 960 €/sq m/annum, particularly in Chiado and Avenida da Liberdade, placing in the 71st position and with a fall of five places considering the last classification (six months ago). Despite the fact that prime rents in Lisbon have been stable over the last six months, prime rental values in other competitors cities registered slight increases, overcoming Lisbon, namely Zagreb, Warsaw, Dubai and Abu Dhabi. Porto, in turn, jumped three places in the ranking, rising to the 82nd position, with a prime rent of 480 €/ sq m/annum in Boavista. Still, from the total of the European markets surveyed, Porto is the cheapest high street retail destination in Europe. TABLE 1 – TOP 10 MOST EXPENSIVE RETAIL DESTINATIONS Ranking



€/sq m/ annum


New York




Hong Kong

Asia Pacific












Asia Pacific








Asia Pacific





4,759 4,688





Los Angeles


4,586 Source: CB Richard Ellis


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Cais Office shold be ready in Parque das Nações early in 2009 Parque das Nações, in Lisbon, will soon feature a new office complex. To be known as Cais Office, the new development will be located between Oceanário de Lisboa and Pavilhão do Conhecimento and is scheduled to be ready by the end of the first quarter of 2009. The building was designed by architectual consultants Broadway Malyan and designers have adhered to very strict environment and energy-saving criteria. According to Margarida Caldeira, head of Broadway Malyan Portugal, «our aim was to design a building that would stand out for its intrinsic architectural and design qualities». In the view of Jorge Godinho, one of the company’s shareholders, it is indeed

a «rather elaborate» architectural piece «with glass facades, an extraordinarily wide entrance hall; the very transparent nature of the building conveys a kind of exuberance, but designers have not overlooked the surrounding landscape and the building’s integration into it without negative impacts». Broadway Malyan Portugal explained that the building’s thermal and acoustic performance was a major concern of the design team and that «state-of-the-art materials and technical solutions were used in to ensure an adequate thremal and acoustic performance». The building displays a high level of transparency, especially in office areas, and daylight and

heat are carefully controlled and monitored by means of an array of especially-treated glass panes and grids that run the whole facade of the building (in excess of 100 m). Visually, the Cais Office building suggests a glass box encased in a white concrete frame supported by a black stone base. The building, with a gross built area of 4,400 m², is being developed by a partnership between engineer Jorge Godinho and Arménio Leal dos Santos, shareholders of Cais Office. It represents an investment of about 15 milhões de euros. Cais Office features three floors above street level and an underground car park on two levels for 118 vehicles.

Residential market value growth in 2008 with irregular performance


In 2008, value growth in the Portuguese residential market was characterized by an irregular performance. In October, the Confidencial Imobiliário index (Índice Confidencial Imobiliário, ICI) for mainland Portugal recorded a negative variation of -0.1%, confirming the very irregular trend of previous months. In January, the ICI index had a -0.3% negative variation, followed by positive growth until June, when it displayed again a negative value growth rate of -0.1%. During the months of July, August and September, the index had a positive performance scoring a monthly value growth rate of 1.6 % at the end of 3rd quarter.

The ICI index displayed a drop in the monthly growth rates both in the new homes and used homes market segments. In the latter case, the rate was negative (-0.2%) and below the average performance of the market as a whole. Despite the irregular monthly performance of the ICI index, its average annual growth rate (which compares the index performance over the last 12 months with its performance over the previous 12-month period) displayed a positive behaviour, albeit marked by a slowdown. In October, the average annual growth rate was 3.5% and this indicator has been growing steadly throughout the

year, starting at 1.3%. On a yearon-year basis, the variation rate for October was 5.4% for the residential market in mainland Portugal, slightly below the 5.8% recorded in September. In geographical terms, the ICI index indicates that the metropolitan areas of Lisbon and Oporto, as well as the Algarve region, followed closely the market’s general trend, displaying a drop in their monthly value growth rates of about -0.2%. The Northern and Central regions, on the other hand, had an improved performance with respect to the previous month, with monthly value growth rates of 1.0% and 0.2%, respectively.


PÁG. 3

Lisbon Industrial & Retail Market BY:

RETAIL & INDUSTRIAL – 3rd Quarter 2008 Prime Rental Value / month (€/sq m/ month)

Prime Yield (%)

Retail (100 sq m)

€ 80


Shopping Centres (100 sq m)

€ 80


Retail Parks (1,000 sq m)

€ 13


Warehouse & Logistic


1,000 sq m

€ 6.00

5,000 sq m

€ 5.50

10,000 sq m

€ 4.50



Area (sq m)

Palácio do Gelo *



Alegro Castelo Branco*

Castelo Branco


Fórum Barreiro* Barreiro


Vivaci Guarda*



Vivaci Caldas da Rainha*

Caldas da Rainha

14 200

Mar Shopping*


TOTAL * Already opened

67,000 238,200

Alegro Castelo Branco has opened to the public The new Alegro shopping centre developed by Immochan has opened to the public. The second such shopping centre in Portugal was officially opened on 3 December. The retail scheme results from an expansion of the Jumbo hypermarket in Castelo Branco, which had been in operation since 1991. Alegro Castelo Branco involved an investment of 40 million euros. The shopping is being marketed by Jones Lang LaSalle and its occupancy rate was at 91% by the time it opened to the public. The scheme has a Gross Lettable Area (GLA) of 19,000 m². Its anchor shops include the preexisting Jumbo hypermarket, as well a a Box outlet also from the Immochan group that will take up 12,171 m². There is also a shopping mall with 7,300 m² of GLA over 56 shops, of which seven are restaurants and cafeterias. The Alegro Castelo Branco will also feature a Page One clothing shop, a toys shop of the Brinca chain, a Catherine Lansfield textiles and equipment outlet and a bowling alley of the Crazy Bowling brand with 905 m². Other outlets include Mr Mint, a 112 PC, Vodafone, Goya (a local retailer), Mac Vest and Egoísta. One of the competitive advantages of the new retail scheme is its ease of access, as it is located between the A23 and IP2 motorways. The scheme features a car park for 1,250 vehicles, of which 600 in covered areas. The company’s next project will be in the town of Maia and will involve an investment of 35 million euros. The Immochan group currently has a portfolio of 85 million euros. According to Mário Costa, Immochan’s director-general, funding has not been a major problem for the group so far and there are plans to continue investing in Portugal. It should be noted that the group owns all the assets included in its portfolio. Immochan’s investment plans for the country mean that the group «may buy new shopping centres, whether fully licensed or seeking the necessary licences that their respective developers are unable to finance», said Mário Costa, adding that the group will look for good market opportunities, because «the current crisis is creating growth opportunities for those that are able to do so». Despite the crisis, Immochan has no plans to review its investment strategy. «Of the 260 million euros available, a significant port [185 million euros] has not been ear-marked for anything specific.


PÁG. 4

Events 4 February 2009 13TH ULI EUROPE ANNUAL CONFERENCE Venue: The Westin, Paris, France Info: 10 – 13 March 2009 MIPIM – THE WORLD PROPERTY MARKET Venue: Palais des Festivals. Cannes, France Info: 21 - 29 March 2009 INHOUSE Venue: Exponor. Matosinhos, Portugal Info: 26 - 29 de Março de 2009 IMOBITUR Venue: Exponor. Matosinhos, Portugal Info:

This give us a lot of leeway to seek and make the most of emerging market opportunities», explained Mário Costa at a meeting with the press. In the wake of the opening of first shopping centre of the Auchan group in Portugal - Alegro Alfragide – the company has announced that it had 260 million euros to invest in Portugal until 2010.

KEY FACTS AND FIGURES: Name: Alegro Castelo Branco Developer: Immochan Investment: 40 million euros GLA: 19,500 m² Location: Castelo Branco


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The new development being planned by the Bernardino Gomes group and Real hotels for Vila Nova de Mil Fontes, on the Alentejo coast, should b...