Nov. 17, 2020

Francisco Horta e Costa


Francisco Horta e Costa

General Manager, CBRE Portugal

“The office sector is still fairly attractive despite all the noise around remote working, which no one can predict 100%.”


Francisco Horta e Costa is General Manager of CBRE Portugal.

How has CBRE evolved since 2018, and what have been the main achievements?

CBRE in Portugal has grown significantly since 2018, which was our second-best year ever. 2019 was our best year ever, and our business has grown more than 20% from 2018 to 2019. We have grown significantly in different business lines across the whole company, though mainly in our property management services, capital advisory business, and hotels business. This was a market where in those two years, a significant number of investors and developers were active, and that feeds all our business lines from valuations and project management to property management and so on.

Are there any specific areas that experienced the biggest growth?

Putting 2020 aside, we have growth across all the business lines. Capital markets had a special year in 2019, as did office leasing, valuations, consultancy, property management, industrial and logistics leasing, and retail. The only area where we would still like to grow geographically is in Porto. Our business in Porto is one of our main areas of focus.

How has COVID-19 affected CBRE, and what has been your strategy to balance the fall in real estate investments?

If not for COVID-19, I am 100% sure 2020 would have been another record year for investment purposes in Portugal. The market was put on hold for five months, and most investors put their projects on standby. However, we started bringing new deals to the market from early June, and the reaction was fairly positive and better than I expected. As of mid-October, looking at the market environment and what is happening around us, it is clear there is still a significant amount of investor appetite. Those investors go from domestic to international and from core investors to opportunistic investors. There is the general feeling that there will be more opportunities, either now or in the near future, namely in the most affected sectors. There is still a great deal of liquidity in the world to invest, and Portugal remains on the map of these investors. This is a consequence of an achievement that Portugal made prior to COVID-19. From 2014 until early 2020, Portugal grew as an economy. In terms of the real estate market, it has become extremely attractive for companies that wish to have their offices in Portugal or grow new businesses in Portugal, and that attracts investors. If your fundamentals are solid and there is potential to grow and increase in value, then investors will come naturally.

What is your vision for certain segments to grow in the medium term?

In terms of sectors, the office sector is still fairly attractive despite all the noise around remote working, which no one can predict 100%. We will all have to wait and see what will happen in the future, though we can agree that after all these months, many say they would perhaps like to spend a day or two at home but still prefer to work in an office environment. Office is a sector that is still dynamic. The beds sector, which includes residential, is a sector that investors perceive as a low-risk, low-return sector. In Portugal, there is no PRS or multi-family market, though we will have it in the near future. We now see developers and investors starting to enter this space. There are also opportunities in hotels, and there are investors that want to take advantage of those opportunities. Logistics is always on the top of the list for investors. Shopping centers are likely a no-go area right now at this specific moment in time, though I would not rule out possible opportunities that some investors might see in the shopping center area.

Can you tell us more about your recent logistics project?

We will commercialize the first 45,000sqm of this development, which will be developed by Merlin, the Spanish SOCIMI. For a long time, there was no new logistics product in Portugal, so it is extremely important that we now see this new supply coming to the market with more modern specifications that will suit modern occupiers as well. I expect this product to have a great impact in the market. Finally, some of the logistics operators or companies that need logistics operations will now have the opportunity to lease up-to-date and modern facilities with all the modern specifications found in other markets. It is great news for the market, and our expectations are high.

What additional services does CBRE plan to offer in the medium term to further diversify the company?

It has been three years, and time passes extremely quickly. We now have a strong hotels division dealing with transactions, operator selections, and doing some consultancy work that we started in September 2017, so it is fairly consolidated. We also have a capital advisors business line, which is where we have our corporate finance department and where we do equity raising and debt advisory. We also work with banks on the buy and sell side of the acquisitions of NPL portfolios or REO, so the real estate owned assets of the banks. We do a bit of M&A as well within the real estate sector, and it has been a fairly interesting journey since we opened this business line, which has been successful and well received by our clients. More recently, we opened an agribusiness department. We have a team of two in Portugal—one valuer and one person dedicated to transactions within the capital markets team. This team is led by Jack Svoronos, an Australian colleague based in Italy, and he covers Portugal, Spain, and Italy. The purpose of this business line is to deal with agricultural lands namely doing valuations and transactions as well. The agribusiness world is a fairly sophisticated one, and we realized many of our clients that we dealt with are also involved in agribusiness, namely institutional investors.

What are your key priorities for the rest of the year and 2021?

My key priority for 2021 is certainly the technology issue, because we realized we sometimes still work with old tools. We also work close with Spain in some of our areas; for example, we have an Iberian property management platform that started with shopping centers, and it then expanded to the other sectors. Bringing together some of our teams in an Iberian approach brings us synergies and more business. Those synergies are not only in terms of our business lines but also in the technology issue. Clearly, Spain being a bigger market and CBRE in Spain being a bigger business, they are more advanced than we are in technology terms, and we can benefit significantly from being closer to Spain and creating an offering to our clients that is seamless in the two countries, because most of our clients see Iberia as one market.