How does Portugal fit into Ageas’ extensive portfolio across Europe and Asia, and what led to your role here?

Arriving in Portugal three years ago, my primary goal was to establish a robust team and bolster our real estate portfolio. By the close of 2021, we’ll have over ten core properties in our portfolio, including two headquarters in Lisbon and Porto. We plan to amplify our real estate allocation within our insurance companies’ investment portfolios in 2022. Part of this strategy involves reallocating our portfolio by divesting legacy assets, such as a building in Porto.

Why is rotating your portfolio essential, and how does Ageas approach this compared to traditional investment strategies?

Portfolio rotation holds significance; we’ve moved away from the traditional approach of acquiring assets indefinitely. Our strategy emphasizes a dynamic approach—open to both acquisitions and divestitures. This allows us to adapt swiftly to market conditions and capitalize on emerging opportunities.

Grupo Ageas Portugal initiated a EUR 150 million expansion in 2019. What asset classes are you prioritizing, and why?

Our focus since entering Portugal three years ago has been twofold. Primarily, we’re prioritizing office spaces due to the scarcity of modern structures. Following the 2010 financial crisis, there was limited development, leading to a shortage of quality office spaces. Simultaneously, Portugal’s growing economy attracts international firms struggling to secure suitable premises.

Additionally, we’re venturing into operational assets—long-term lease properties crucial to tenants’ core operations, including nursing homes, clinics, and student accommodations. This diversification provides stable revenue streams and balances the dynamic nature of office investments.

How did the global pandemic impact Ageas’ operations in Portugal?

The pandemic prompted experimentation with the work-from-home model, fortuitously aligning with our move to a new office building. While our office assets adapted well to changing norms, challenges arose due to limited international travel impacting investment inflow. Local teams mitigated this challenge, providing crucial support. However, shopping centers suffered greatly during the pandemic, exacerbated by governmental interventions affecting landlord-tenant relationships. Fortunately, recent figures show signs of improvement.

What are the primary challenges an investor faces when navigating Portugal’s market?

Construction costs and lengthy permit timelines, notably in Lisbon, present significant challenges. These factors impede steady pipeline development for developers and hinder tenants in finding suitable office spaces. Despite progress, bureaucracy and prolonged licensing processes remain cumbersome.

What message would you offer to investors eyeing the Portuguese market?

Portugal boasts tremendous potential, with the capacity to become Europe’s IT hub, akin to California. The quality of life here is exceptional, and the real estate market presents numerous untapped opportunities, making it an attractive investment landscape.