Castro Group has expertise in real estate development, asset management and construction in various sectors of the market, such as offices, retail, residential and logistics.
Castro Group has an impressively long history on the market, how did you manage to maintain this strong position after taking over?
Following in my father's footsteps, in 1968 founded his first company dedicated to construction and real estate development. In 2001 I launched, together with my father and my brother, a new company, José Castro & Filhos, specialised in luxury residential development and, in 2003, the company Mercado da Pedra. In 2004, I created Primegest Brasil, a real estate development company based in Rio de Janeiro, with several successful residential real estate projects over 15 years. In 2010, during the financial crisis, we had to adapt our activity according to the market, and, at that stage, we started to work in the retail segment since the residential segment was utterly stagnant.
Those trying times did our search for innovative ideas that are crisis-proof and can make a statement on the market, and this is how in 2018 we reshaped the company into Castro Group consisting of five companies: ICON SICAFI - an investment society of fixed capital; Castro Red - Real Estate Development, Castro Build - Construction, Castro Capital - asset management and Castro Properties (part of Castro Capital).
You mentioned two construction companies in the group, how are they influencing the dynamics of the projects you're developing?
The two different construction companies in the group are the safety net that helps us build all the projects that we envision because the most challenging stage of development is often the construction. The relationship between developers and constructors is, at times, frail because adjustments need to be done, and flexibility is somehow found. We are finishing the projects before the deadline is vital for reputation building. Thus, driven by the experience and trust of the market, we segmented our service areas and created Castro Build as an integral part of the Castro Group.
To what extent does each of the companies in the group contribute to the overall business?
Icon SICAFI has the most substantial turnover because it deals with massive projects. However, the various companies of the group actively contribute to the success of each other. In addition to Castro Build, we highlight the crucial role of Castro Red, the company responsible for the Group's 'Real Estate Development'. Here we develop the process of real estate development, both for our projects and for other developers who hire us. At Castro Red, we define objectives for real estate investment, plan each stage and integrate information from different stakeholders and the market in a go/no go analysis of the investment.
Looking at the various segments you're active in, where would you say most opportunity lies in nowadays in Portugal and what project excites you the most?
Residential projects in the outskirts of Lisbon seem to have traction today, as well as logistics parks in the North - where there are only old warehouses and operational centres built by companies for their use. Algarve also needs industrial development and navigates the EUR 250 price per square metre. We have focused on developing residential projects outside Porto and Lisbon, aimed at the medium and medium-high market segments in cities such as Braga, Aveiro and Algarve. The "build to rent" is a new trend taking its first steps in Portugal. We believe it will grow in the coming years due to increased profitability and people's need for mobility.
In the office segment, our conviction is that the North will establish itself, nationally and internationally, as a place to attract companies, such as Farfetch, IBM, Fujitsu, Siemens, among others. Factors such as talent, safety, health, mobility, visibility, among others, are part of the “attractive package” of this region, compared to other areas of Europe, which guarantees that this segment will continue to attract investment. In this area, we are most excited about our FUSE VALLEY project, which we first envisioned five years ago, at a time when foreign investors were coming back to Portugal.
Motivated by the expectation of growth, Farfetch challenged the Castro Group to develop a revolutionary space jointly. This development, a project by the Bjarke Ingels Group, will have 140,000 square metres of construction above the ground, of which 60,000 square metres will correspond to the FF offices, and the remaining program promoted under our responsibility will have an additional 62,800 square of offices, a hotel with 75 rooms, 42 apartments, 5,000 square of spaces for trade and business support services.
Finally, we want to highlight the opportunities that exist in the logistics and retail sector, essentially in the North and Algarve, since the Lisbon region has a much higher offer than the rest of the country. At Castro Group, we are currently working with Panattoni in the largest logistics park in the North of the country.
Portugal was never known as a logistics hub historically, do you have faith in its future given your recent involvement?
E-commerce is creating demand for it in the region. National and international logistics operators have intensified the search for new spaces, but the supply is limited, especially in the North region. More than ever, new, more modern, technological, and well-structured logistics centres are being sought to better respond to new consumer behaviours. The vulnerabilities of the supply chains that we are currently witnessing are overcome. These factors have caught the attention of investors, namely institutional ones.
What are the key objectives you want to achieve with priority in the next two to three years?
Castro Group's mission is to innovate and prosper in the real estate business. Based on the new paradigm of the real estate market that guides the Group – location, innovation, sustainability, and technology – we have invested in adopting digital solutions that aim to facilitate the visualisation and management of projects and buildings.Technology, innovation, and sustainability are our main bets for the next few years because it will become impossible to sell buildings without green certificates. FUSE VALLEY and SPARK Matosinhos are two excellent examples, which include these same concerns.
Projects wise, we want to turn all the blueprints into reality, and there are quite a few. Cascais, Algarve, Braga, and Porto are the regions where we will concentrate our efforts in the next period. The market will turn active in the following years we plan on maintaining our uniqueness with every new project we take on.
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