A plan that offers residence permits to property buyers in Portugal has cashed in over €1 bn since its introduction in October 2012 and continues to fuel foreign investment – largely Chinese - into the country’s battered real estate market.
A plan that offers residence permits to property buyers in Portugal has cashed in over €1 bn since its introduction in October 2012 and continues to fuel foreign investment – largely Chinese - into the country’s battered real estate market.
Under the programme, foreigners who invest over €500,000 in Portuguese real estate are offered residence in the country as well as foreigners who transfer €1 mln or more in capital or create at least 10 jobs. This has resulted in nearly 2,000 so-called ‘golden visas’ being issued following property acquisitions over the past two years, nearly 1,500 of which have gone to Chinese investors, according to government data.
In total, the move has also spurred €1.17 bn of capital inflows since October 2012, largely directed at the local real estate market which accounts for €1.06 bn, according to data from CBRE.
'A number of private Chinese investors have bought residential buildings and we’ve also seen some activity in the commercial property sector,’ commented Francisco Horta e Costa, managing director at CBRE in Portugal.
Most recently, larger Chinese investors and developers including Dalian Wanda, Fossun, Country Garden and Poly Group have also been scouting the market for development opportunities, added Horta e Costa.
‘The most interesting movement of the past 12 months is a rise in interest among Chinese developers which are looking to take advantage of the new regulation. They are interested in the development or redevelopment of residential projects in Lisbon, with the aim of marketing these projects among fellow citizens in their domestic market. Although they have not made a move yet, they are visiting several potential projects, and I truly believe something big will happen in the near future,' he said.
Dalian Wanda in particular has already been active in the Iberian peninsula. Earlier this year, the property and entertainment conglomerate run by China's richest man bought one of Madrid's highest towers from lender Banco Santander for around €265 mln.
Located at Plaza de España, one of Madrid's main squares, the 117-metre high scheme was bought by Santander in 2005 for €389 mln from listed property firm Metrovacesa. The 67,400 m2 building, which formerly housed a Crowne Plaza Hotel, a shopping centre, apartments, and offices, has since been vacant awaiting renovation into luxury residences. Dalian Wanda Group is redeveloping the 25-storey scheme into a shopping centre, luxury hotel and 300 luxury apartments according to a design by Norman Foster and Carlos Lamela. The group is also rumoured to have acquired a site to the southeast of the Spanish capital to develop a multi-billion euro project.