Portugal will be the next port of call for international real estate investors seeking opportunities in undervalued markets, according to Jan Willem Bastijn, head of EMEA capital markets at Cushman & Wakefield.

Portugal will be the next port of call for international real estate investors seeking opportunities in undervalued markets, according to Jan Willem Bastijn, head of EMEA capital markets at Cushman & Wakefield.

‘Opportunistic buyers are looking at markets that have seen a downturn and where value can be found,’ Bastijn said in an interview with PropertyEU. ‘Most of the international money is looking for opportunities in gateway cities like London, Paris, Frankfurt and Berlin. But opportunistic buyers are looking at the Iberian peninsula and we’re seeing more and more deals in Spain, and not just the prime stuff. In some deals like Castellana (a prime mixed-use asset in Madrid ed.) we’ve seen 20 offers, all of them international. Opportunistic buyers are all looking at Spain, Ireland and the Netherlands. Portugal will follow.’

BRAZILIAN WAVE
According to Celina Antunes, CEO South America at Cushman & Wakefield, some Brazilian institutional investors and pension funds are looking to invest in Europe, in addition to wealthy families. Given the cultural and linguistic ties, Portugal would be a logical first port of call, she added. However, some investors are looking into more mature markets such as London. ‘Relationships with Europe are very strong. There are a lot of wealthy families and Brazilian institutional investors with a lot of money to spend. Often they start by acquiring one important property and later they can go for more. And not just in Portugal, but also in Spain, Italy or London.’

Southern European countries are, however, in quite a different league to London, due to a marked difference in potential yields. ‘Returns in London are not as high,’ she conceded. ‘But London is London. A lot of investors want to be there, particularly in residential and offices.’

SHOPPING IN PARIS
Following the outbreak of the financial crisis, wealthy Brazilian families converged on residential properties in Miami and have accounted for the bulk - or 80% - of sales in recent years as house prices plunged and mortgages became super cheap when compared with Brazil, Antunes said. The wave of Brazilian investment in the US city follows a wave of Cuban, Columbian and Puerto Rican investment, she added. ‘The cost of living has become so expensive in Brazil,’ she explained. ‘Brazilians were the first buyers in the US after the crisis and now they’re coming to Europe to the established countries in Western Europe. They are already coming to Paris, for example, for shopping. But there are some places in Western Europe where they won’t go. They won’t go either to Central and Eastern Europe or Russia.’

In recent years, Brazil was one of the brightest stars in the firmament of emerging markets but its shine has started to fade as economic growth has failed to meet expectations. In the year that Brazil is hosting the World Cup and with presidential elections on the agenda, local investors are looking beyond their own national boundaries, Antunes said. ‘There’s a window of opportunity for Brazilian investors to look at other markets. That may be reduced in 2015.’

Antunes also expects to see more outbound investment from Brazilian pension funds in the course of the year. Europe will get a bigger share than the US, she predicted, but added that institutional investors in Brazil are not fast movers. ‘Brazilian pension funds may need more than seven months to take a decision. That’s a huge disadvantage.’