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Article Jornal de Negócios | 31 December 2020

JLL: Real estate investment falls in 2020 but is expected to be the third best year ever

Real estate investment in 2020 is expected to exceed 26 billion euros, according to JLL estimates. Values ​​representing a 20% drop compared to the 2019 record.

JLL estimates that by 2020 2.6 billion euros will have been invested in commercial real estate and another 24 billion euros in housing purchases in Portugal, which should be the third best year for this market.

The real estate firm considers that this was “a very resilient sector in the context of the pandemic crisis”, pointing to price and income stability in most segments, as well as a high volume of transactions.

“The year started at full speed in the different market segments and, had it not been for the proliferation of covid-19, 2020 would have been the best year ever for this sector, breaking new records”, says JLL general director, Pedro Lancastre . “After a 2nd quarter of panic in a context of absolute ignorance, the 3rd quarter was bringing normality to the sector, with transactions taking place, and the 4th quarter was already marked by greater confidence and the return of many investors to assets, also because the vaccine stopped being a mirage to become a reality “, he adds.

The head of Capital Markets at JLL, Fernando Ferreira, points out that the local capital, coming from open real estate investment funds and pension funds, “was much more active” and points out that the offices were one of the most desirable assets “. The retail segment “underwent greater scrutiny” by investors, due to the impact of the pandemic on the free movement of consumers, which caused a drop in the performance of many assets in this segment, especially with regard to shopping centers. statement sent to newsrooms.

With regard to the residential market and also to the industry and logistics market, there is “strong demand”, which is accompanied by a “lack of product”.

In 2019, 3.240 billion euros were traded in commercial real estate and 25.1 billion euros in residential, which means that in 2020 a drop of about 20% is expected compared to the previous year. In 2018, 3.356 billion euros were traded in commercial real estate and 24.1 billion euros in residential real estate.

Portugal stands out in 2021

The same real estate company is optimistic about the performance of the Portuguese market next year, stating that the country keeps “its attractions intact”, after leaving “well positioned” in the pandemic compared to other European counterparts.

Even so, JLL takes the opportunity to point out some growth brakes that already inhabited this market before the pandemic invaded it. The real estate firm argues that it is necessary to resolve the delays in the licensing processes and review the strategy for Gold Visas, “which can again be an important catalyst for the country’s economic recovery”.

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