Turn to the East! | Article published in Vida Imobiliária, November 26, 2015.

Turn to the East!

We wrote this article on November 26, 2015, also for Vida Imobiliária, but it is curious to see that it could have been written today:

“The history of the last Week of Urban Rehabilitation in the city of Porto is still made, an event very well led by Vida Imobiliária.

It was, in fact, the right time to make a point of view on the panorama of urban rehabilitation of the city, what happened well, what is going less well and what is the prospect of future development, in fact, the title of this article.

It is an evidence that tourism has been the forerunner of urban rehabilitation in the city, where the demand for buildings for the hotel industry is constant, both for tourist units of some size and for local accommodation.

The street commerce has benefited from this reality, and the axis Rua das Carmelitas, Rua dos Clérigos, Rua 31 de Janeiro, Rua de Santa Catarina and Rua Sá da Bandeira has been thriving. It will soon be improved with the rehabilitation of Mercado do Bolhão and also the Quarteirão da Casa Forte, two structuring projects.

However, news of new hotel developments appears every day. On the day this article is written, for example, the appearance of thirty new hotels is reported in the media!

The traditional hotel investor seeks buildings of some size, has investment capacity and knowledge. He knows how to buy, particularly in view of the required profitability and the necessary economy of scale, even though in some circumstances they have acquired spaces with slightly exaggerated prices.

You are an informed investor!

The same cannot be said about investors in local accommodation, despite one or two good exceptions, such as that which occurred at the Palácio dos Condes de Azevedo.

Any type of property is serving this function and any investor profile has served to leverage this type of business. It has emerged as a “golden goose” that is attracting all kinds of investors.

What concerns us is not institutional investors, who know how to enter and exit the market, but investors who are less aware and economically less strong and more leveraged.

It is not being warned that a crisis in tourism can happen.

In this scenario, there is a risk that the city center will return to the old days, to the void, and many investors are in precarious conditions, with debts to banks or builders and property developers.

What is happening is not necessarily bad, but it is exponentially increasing the price of properties to be rehabilitated, which threatens to make rehabilitation less attractive.

It also diverts properties from an important market, which is the housing market.

We are effectively running the risk of killing the “golden goose” and losing the opportunity to attract residents to the city!

Therefore, there is an urgent need to start changing the urban rehabilitation paradigm.

The city must start to attract other users of urban space.

It is crucial that the habitual inhabitants of the city are not removed, with a tripeiro accent, and that conditions are created for people to inhabit the center.

A firm bet on the housing sector must be made and attract companies to turn Porto into a business platform, where it can assert itself as an interface between Europe, South America and Africa.

In support of the truth, we must say that this executive from the Porto City Council has made a notorious effort to attract new audiences to the city.

You are doing it intelligently by relocating the focus to the eastern zone.

This area has enormous potential, both in buildings that can be restored for housing, and in old warehouses that can be exploited again.

Clearly, it is an area that can again become industrial and services, taking advantage of the accessibility that is planned and the Campanhã intermodal terminal.

We know that large investments in the country’s capital are scarce and that large investors are keeping an eye on the city.

It is necessary to turn to the East!”

PS: It is curious that “Turn to the East” pursues real estate office.

“We turn to the East” when:

  • We did EXPO98. We turned East in the rehabilitation of Lisbon.
  • We did the “Gold Visa”. We turned the Orient in real estate investment.
  • Porto is developing the eastern part of the city!