PORTUGAL - Real Estate & Construction
Head of Portugal, Cushman & Wakefield
Eric van Leuven is Executive Partner and the Head of Cushman & Wakefield in Portugal, leading a team of 85 professionals in consultancy and real estate brokerage, as well as participating more directly in investment services and promotion of shopping centers. He is a Dutch national but has lived and worked in Portugal since 1982. In 1987, he set up George Knight Estate Agents in Lisbon. In 1991, Cushman & Wakefield (then Healey & Baker) acquired the commercial property division of George Knight and he became Managing Director. In 1992 he became an Equity Partner in the European business. As a member of C&W’s EMEA Board from 2007 to 2012 he chaired the local boards of the firm’s offices in Poland, Hungary, Czech Republic, Slovakia, Romania, and Greece. He is currently member of the firm’s European Executive Council. In 2000 he was elected a Fellow of the RICS (Royal Institution of Chartered Surveyors) as an “eminent professional” in recognition of his role in the development of the commercial property market in Portugal. He is the immediate past President of RICS in Portugal, and currently Vice-President of ACAI (the Portuguese Association of Property Consultants and Valuers) and of the Dutch-Portuguese Chamber of Commerce.
I set up my own business with the help of an experienced estate agent in 1987. We were mainly a residential estate agency, and it was the first foreign business in Portugal catering mainly to Anglo Saxon buyers who wanted to buy real estate in Portugal. When multinational Healey & Baker made an offer to buy the business, I initially declined as I was satisfied with my independence and things were going well. Around the same time, other multinationals set up in Portugal, and I saw the power of the name and the support of the back office in terms of marketing and HR. I realized I would not be able to compete by myself, and thus changed my mind in 1991. Since then, Healey & Baker (which in turn was later acquired by Cushman & Wakefield) has been extremely helpful, particularly to our business and clients. We became a more professional organization, with many international clients. The whole reason behind setting up a business in Portugal was to service international clients of Healey & Baker with an interest in Portugal for retailers, corporates, industrial players, developers, investors, and so on. We became a completely different business with a high focus on professional services such as valuation, property management, and more, though with a continued focus on transactional business. The support of an international organization and everything that comes with it—the brand, recognition, and client list—is incomparable.
I was pleased with that award, as it is a form of recognition by clients and peers. There are two things that I try to instill in the almost one hundred people in this office. The first is “clients first.“ We look at the long term, and if there is a quick deal that is not in the best interests of our clients, we will not do it. The other guiding principle in this business is collaboration, because the world is increasingly more complex and large deals will always involve more than one person, department, or skill. One of the other dogmas in this business is to cooperate and seek the opinion of others. We will sort out the fees, and that is never a problem between people or departments. It is about giving clients the best service available by drawing upon the expertise of individual people and departments.
The CGD building in Baixa is one of our flagship instructions, though it is a bigger portfolio with land in Porto, the Algarve, Palmela, and Lisbon, so there is more than just selling the headquarters building. We do a great deal of office leasing work; one of our biggest ever transactions was the forward sale in early 2018 of a building that has yet to be built in Expo for Ageas, the insurance company. We are active everywhere, including industrial and retail, especially stores on the high street. We are extremely active in Porto as well. One area that we specialize in is the sale of supermarkets, which is a popular investment medium because they offer usually long leases and attractive returns. It is also not a sector of retail that is under threat. At the moment, we are selling a dozen supermarkets or hypermarkets for Sonae.
We must look at that according to the sector, because it is not the same for stores as it is for warehouses. There is a real boom in shopping centers in Portugal, which has some of the best malls in Europe. Another trend is that the high street has become extremely active. The lease legislation that changed in 2012 significantly contributed to this, as did tourism and the arrival of luxury retail. We have a database of all retail deals for the last few years, and 60% of retail transactions are in the food and beverage sector. It is a truly active sector. In terms of investment, we see a completely different set of buyers when compared to the previous peak in 2007. The two main classes of players then would be Portuguese and German property funds, plus the odd UK, Dutch, and German non-fund player. Today, we see a wide range of nationalities buying all different asset classes – from extremely opportunistic hedge funds from the US to core players and German funds that will pay high prices if they can buy something which is secure, newly built, on a long lease, and so on. In between, there is a whole spectrum of risk premiums. They are many opportunities for the more adventurous investors and those looking for scale.
Portugal did a great deal of work on the fundamentals as a result of the structural reforms imposed on it. This was to get public finances in order and reduce the deficit; however, in the longer term it has made Portugal more competitive and stable; removed the privileges of certain classes and professions; made the labor law more flexible, the state smaller, and the judicial system faster; and improved the lease law, which is extremely important for our industry. The structure of the real estate market is much healthier, as it is less dependent on bank finance. There will be a crisis, though no one knows when it will hit; however, Portugal is much better prepared today than it was 10 years ago.
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