Our member MVGM reports about the impact of the Pandemic on the Real Estate market
The Covid-19 pandemic caused an unprecedented crisis with profound effects on the European property market. MVGM, the European leader in the real estate management sector with a presence in 10 countries, has produced a report that gathers insights into the main effects of the pandemic in the various sectors of the real estate market in Europe.
According to MVGM, the Portuguese residential market was able to resist the pandemic and the rental market gained ground, putting some pressure on the value of rents. In the two large metropolitan cities - Lisbon and Porto - around 15% of houses migrated to the traditional rental market and, nationally, there was a 67% increase in the residential market, which represents approximately 43,000 available houses to rent. Despite the fact that the value of rents has been reduced, the purchase price of properties has risen slightly during the year 2020.
“The results of this report reinforce our belief that this is the ideal time to revitalize the rental market in Portugal from the perspective of “Build to Rent”. A more dynamic rental market could, in the long run, make cities more populated and expanded. With more projects in this rental mindset, MVGM is committed to ensuring strict and professional management in this new dynamic that is beginning to emerge in the Portuguese residential market”, reports Miguel Kreiseler, Managing Director of MVGM Portugal.
Regarding to offices, 2020 was a difficult year for investors and for companies that occupied these spaces. Teleworking accelerated the eviction of buildings and led landlords to accept price adjustments to support tenants. In this segment, it is expected that, as the rental periods expire, tenants will try to reduce the areas occupied in these buildings or to transform them into spaces more suited to the current needs of their companies.
The logistics sector, on the other hand, contradicts trends and, according to MVGM, was the one that best managed to overcome the crisis, as it constitutes a fundamental business for the adaptation of companies during confinement, thanks to the growing importance of online commerce.
Shopping centers with more challenges in 2021
MVGM reveals that, on average, circulation in shopping centers dropped by around 30% and sales by 25% in 2020, which reinforces the need to increase the resilience of these spaces that, since the beginning of the pandemic, had to find solutions to maintain sales and preserve jobs.
For Miguel Kreiseler, "the pandemic has brought unprecedented challenges for shopping centers and for the companies responsible for their management". “Rethinking the nature of their function and the purpose of these spaces will be essential to keep them attractive for visitors and profitable for owners, through new occupation models. What if shopping centers were given a new purpose? It is necessary to increase resilience so that these spaces are able to react and accompany a change in imposed situations, as happened with Covid-19 ”, concludes the Managing Director of MVGM in Portugal.
To read the article of Expresso, please click here.