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Aniceto Viegas

17 March 2022

Avenue is developing and managing residential and office real estate developments in the prime zones of Lisbon and Porto, focusing on urban rehabilitation and urban land regeneration. 

What did the beginnings of Avenue look like and what is the current footprint you have in Portugal?

In 2015, in the aftermath of the newly changed lease law and several structural country changes, we started Avenue with the goal to refurbish seven projects: high-end residential and high street retail units in premium locations. Six of them were completed in Lisbon and one in Porto. Portugal now has a mature l market, with high quality developments and Avenue established with a well balanced portfolio. Starting with 2017, we decided to include office developments in our portfolio, with “the bigger the better” view in mind. Our flagship project is EXEO Office Campus, with its 70,000 square meters. 

Since almost 90% of the total market demand (and 2/3 of the residential demand) is concentrated in Lisbon and Porto, we plan to continue the same strategy and develop relevant office and residential projects in these two cities. At the moment, we have secured 15 developments: seven are completed, six are under construction and development and are working on the conception and licensing of two new projects, one of which is taking the idea of scale at the next level.

How do Lisbon and Porto compare in terms of scale of opportunity and ease of doing business?

The major difference between them is that Lisbon has a bigger and more developed market, but on the flip side presents stronger competition and a more cumbersome licensing process. Porto profits from the notoriety of the homonymous wine brand, is less competitive but has a smaller scale (which has an encouraging growth pattern, though). Residential clients usually weigh both cities seriously.

Before 2017, Porto wasn't on the map of international buyers and the offices sector was virtually non-existent, but the municipality and Invest Porto are doing a great job in changing that.


Ten years ago, Porto had an office market of maximum 15,000 square meters and nowadays it grew to nearly 80,000 square meters, around 40% to 50% of Lisbon's market.


Offices are still in short supply and in need of revamping in Portugal – what are the dominant features tenants are seeking and how did these guide you in your approach with EXEO?

Indeed residential has been so lucrative in Portugal that it naturally drew investors and developers, to the detriment of offices and industrial. Nowadays, this is changing with rising rent and other benefits. Generally, clients are interested in flexible spaces situated in sustainable buildings that are close to public transportation routes. 

EXEO is the perfect example that brings together all these desirable features and we're very proud that we had the chance to deliver such an amazing project. The buildings are high tech and stand as a reference point in terms of ESG, with rainwater recovery systems, production of energy on-site, high energy efficiency, lush green areas and suitable work spaces both inside and outside of the building. It is very close to the main train station in Lisbon, a vital aspect since most employees use public transport.

Is ESG a driving factor for Avenue as a response to market demand, or rather as a means to preserve the buildings’ value?

Big companies are interested in complying with ESG requirements, most do in fact care about protecting the environment and all want to offer the best working conditions to their employees. Although private clients in the residential sector don't have the same approach (yet), they are still interested in making a positive difference. We, as developers, must better explain these concepts to our clients, emphasizing advantages like lower utilities bills in the long run.

How welcoming are you finding Portugal in terms of investment climate and access to capital?

Ever since the former financial crisis local banks remained cautious when it comes to real estate. They don't offer loans for lands and acquisitions, but they do finance construction costs. However, Portugal has become very attractive for private equities and other types of lenders, having successfully mitigated the damage done by the crisis and reaching a stable point.

Are there any other challenges that foreign investors should we aware of, specific to Portugal?

Construction costs are the main problem all over Europe and Portugal is no exception, being also faced with a low supply of materials and workforce. Land prices will probably decrease in the coming months in order to balance the high construction costs and the long licensing process. The Government debt level in Portugal is higher compared to other European countries, this should be balanced out with the growing GDP. Things are moving in the right direction, and a good example is the rising rate of exports, standing at more than 40% compared to 30% two decades ago of the GDP. 

What are the key objectives you want to achieve at Avenue in the next two to three years?

We have three main objectives: continue to be a relevant player on the residential market in Lisbon and Porto; invest further in offices and potentially expand into Porto; and introduce logistics in our portfolio since we see great potential  in this sector, sparked by the rise of e-commerce.

Do you have a final message about the real estate market in Portugal?

International investors are highly important to Portugal's economic growth and are made to feel welcome. The EU is offering substantial financial incentives which are bound to push the economy further. Now is a good timing to come and take advantage of the momentum in place. 

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