Federico Rosales, managing director of Príme Portugal Investment, tells idealista/news about the real estate developer’s plans.
If there is one segment in real estate that has proven to be resilient to crises, it is luxury residential. And neither the pandemic nor the effects of the war in Ukraine – a brutal increase in energy costs and the inflation rate that forced the European Central Bank (ECB) to raise key interest rates – seem to be leaving their mark on this niche market in Portugal. On the contrary. “We will have an ultra, ultra-luxury project, not just ultra-luxury (…). It is a market that has demand in Portugal. Always maintaining quality, we want to demonstrate that we can do something ultra, ultra-luxury and 100% Portuguese product”, says in an interview with idealista/news Federico Rosales, managing director of Príme Portugal Investment (Príme), promising to reveal more news about this venture soon.
This will be the seventh project of the real estate developer in Portugal, which joins five other residential, all in Lisbon – Santo António, Liberdade 49, Azure, BOW 123 and NAU 30 – and an office, St. Léger, also in the capital. But there are more investments in the pipeline, namely in Melides, reveals Federico Rosales, adding that Príme has already invested around 160 million euros in the country. “I would say that we could invest another €100 million in the coming years, with the projects we have in the pipeline,” he adds.
According to him, Portugal remains on the radar of international investors, and there are also many Portuguese clients buying luxury homes in the country. Federico Rosales, who was born in Venezuela and as a partner in Príme has the Italian Filippo Buffa, ensures that the real estate developer is “always looking for unique assets, in unique places, also making unique projects” and leaves a guarantee: ” Príme ‘s bet is Portugal, and now we are only investing in Portugal and in the long term”.
How and when did Príme enter Portugal? It was in 2016, right?
Yes. My partner, Filippo Buffa, started coming to Portugal because he had connections with the country, he had Portuguese friends and as I knew him and we knew there were opportunities, because there was a change in Portugal, we gathered a group of friends and we realized it was a good time to invest. It’s a very interesting country. I knew Portugal, but I hadn’t seen it from an investment point of view. Filippo got an opportunity, the Santo António building in Lisbon [it’s finished and sold], which belonged to the Ministry of Defense and was being sold at auction.
We bought the building, looked for an architecture studio and realized it was a good time to have a small team in Portugal. And we started to see that there were more opportunities. We were already investing in Spain, since 2012, we already knew the European real estate market and we started to look more at Portugal, because the market was more depressed, so there were more things to do.
And then they continued to invest in Portugal….
Yes, our second project was Liberdade 49, and then we decided to take a risk and look for more opportunities. On the investment side, both the family office and the other investors we have, when they realized that we had a Portuguese team, they realized that we have analytical skills and that we know the market well.
“What we always want is to make a quality product (…). The Portuguese product is impeccable. All the materials we use are 100% Portuguese. We try to make the most of Portuguese quality and local products”
Interior lobby of the BOW 123 developmentCredits: Príme Portugal Investment[/caption]
Príme is a real estate developer, but it brings together a group of investors, is that it?
Yes, family and friends, as we say, and we stick to this idea. This way we are more agile, also because there is a lot of competition. We know what our limit is, how much we can spend/invest. That has always been our idea. What we always want is to make a quality product. Liberdade 49, for example, was an office building, but in that location [Avenida da Liberdade, in Lisbon] what made more sense was a luxury residential development.
Is this the idea you carry over to other projects, such as BOW 123 and NAU 30, for example?
Absolutely. And we used Portuguese architects, namely Ana Costa, who is a spectacular architect and a wonderful person. And we realized something else, which is that there are quality materials in Portugal: Portuguese stone, for example, is at the level of Italian ones. The windows and frames are the same. The Portuguese product is impeccable. All the materials we use are 100% Portuguese. We try to make the most of Portuguese quality and local products.
And what was the third project?
We bought the 24 de Julho 70 building [on Avenida 24 de Julho in Lisbon] and realized that there were archaeological remains and contamination in the soil. It is a rehabilitation project [called Azure and signed by Frederico Valsassina] that we are approaching more calmly. It is a residential development and is under construction, but has suffered some delays.
“We are always looking for unique assets, in unique locations, also doing unique projects”
We are always looking for unique assets, in unique locations, also doing unique projects. Then [the fourth project] we invested in Avenida Duque de Loulé 123, which is BOW 123, also with Ana Costa. There we will have a penthouse with 1,356 square meters (m2), which is distributed over the top three floors of the building [it is a triplex with five suites, two kitchens and five parking spaces. The terrace, which is divided between the three floors, has a total area of 612 m2, with two panoramic swimming pools and views over the São Jorge Castle and the Tagus River].
Is this the most expensive apartment sold in Portugal, after the penthouse bought by Cristiano Ronaldo on Castilho street?
We don’t often talk about it, but the truth is that we sold the penthouse at Liberdade 49 for more than Ronaldo paid for it: we sold it for €16,800 per m2. And we sold it by video call. It also has a swimming pool, fantastic views…
Did this penthouse in the BOW 123 building exceed those values?
Yes, it was around €11 million. The owner is a foreigner and bought the property in pre-sale even before the pandemic. At the moment, there are only four apartments for sale.
Are there Portuguese among the buyers? In this and other Príme projects?
We have about 30% Portuguese buyers on average in all projects. In BOW 123 there are three Portuguese investors [in a total of 17 apartments].
There is an important luxury market for the Portuguese, they are people who like top, top, top products.
“We don’t usually talk about it, but the truth is that we sold the penthouse in Liberdade 49 for more than Ronaldo paid for it: we sold it for €16,800 per square meter (…) [The penthouse in the BOW 123 building] was around €11 million”.
Even taking into account the current economic climate, marked by high inflation and rising interest rates, for example, are Portuguese still buying luxury homes?
Yes. And being an ultra-luxury product it is a bit “on the fringe” of the market, because it is bought by people of very high purchasing power.
Back to the Príme projects….
This was followed by the Rodrigues Sampaio 30 building [the NAU 30, in Lisbon], also designed by Ana Costa. It is a very particular project [the developer’s fifth investment in the country], because it has an entrance through Rodrigues Sampaio 30 and another through Rua de Santa Marta. All the apartments have a “double face” and generous areas of balconies and terraces. It also has a brutal penthouse, which we sold to a famous Portuguese, but I cannot say who it is. But it sold very well.
Both BOW 123 and NAU 30 will be completed in the first quarter of 2024.
Do most clients invest in these properties to live in or as an investment, and then put them on the rental market or resell?
There is a bit of everything. There are Portuguese who buy to rent, North Americans who buy for investment purposes and then bring in other North Americans. We really like North American clients because they are very honest with their prices. But we also have Portuguese families who buy to live. The French also buy a lot as an investment.
Are US citizens the main customers?
They are the best payers and they are major players, like the Brazilians. The quality of Brazilian clients has improved, they are now fairer with prices. I would say our main clients are Brazilians, North Americans, Portuguese and then Nordic investors. We have only one Asian client, from the Philippines. And no sales through Golden Visa.
Speaking of Golden Visa, do you believe that with the end of the program foreigners will stop betting/investing in Portugal?
No, I think the market always tends to get complicated in the middle markets. In our case it is a very peculiar market, there is no Local Accommodation (AL), they are luxury houses where the owners live or rent them in the traditional market. It is a very low speculative market, they are well located luxury houses that are worth what they are worth.
“We will have a project that is ultra, ultra-luxury, not just ultra-luxury. It is a project in Cascais. It is a market that has demand in Portugal. Always maintaining quality, we want to demonstrate that we can do something ultra, ultra-luxury and 100% Portuguese product ”
Do you believe, then, that the luxury segment will continue to be attractive in Portugal?
Absolutely. We will have a project, which we will announce at another time, which is ultra, ultra-luxury, not just ultra-luxury. It is a development in Cascais. It is a market that has demand in Portugal. Always maintaining quality, we want to demonstrate that we can do something ultra, ultra-luxury and 100% Portuguese product.
How much have you invested in Portugal so far in the various projects and how much do you plan to invest in the coming years?
We have already invested around €160 million. For the next few years we have two projects planned in Melides: we want to provide the experience of a Portuguese family living in Lisbon being able to have a second home in Alentejo. I would say we could invest another €100 million in the coming years, with the projects we have in the pipeline.
We are talking mainly about residential projects in Lisbon, apart from these in Melides and the ultra, ultra-luxury one in Cascais.
Yes, these projects that we have already talked about, as well as another office project[St. Léger] that is not part of our DNA, are all in Lisbon. Our DNA is luxury residential and ultra, ultra-luxury. In Portugal there is a market for all segments, I believe it is not that there is little supply, but that there is high demand.
And another important detail: we, in addition to working with architects with very good taste, work with Pedro d’Orey, founding partner of QuartoSala. We have a very good relationship and he helps us develop this luxury product. And as he has very good contacts with clients, and of different nationalities, he guides us with these more interior design themes. He knows exactly what each client likes. He has a very unique sensibility.
In asset selection, we look for depressed properties that are poorly planned/designed. Office buildings that change use, such as Freedom 49, BOW 123 and NAU 30. We know that the city needs more residential buildings and less office buildings, not least to reduce traffic.
“We have already invested around €160 million in Portugal. For the coming years we have planned two projects in Melides (…). I would say that we could invest another €100 million in the coming years, with the projects we have in the pipeline.”
Are these only rehabilitation projects?
Yes. The Melides project will be new construction, but in the area there are some abandoned houses, for example, which we will recover.
You said that before “landing” in Portugal Príme had invested in Spain. Are they still investing in the country?
In Spain we have developed 16 projects. We no longer invest, the bet is now Portugal and it is a more long-term bet. The ‘fundamentals’ of Portugal are more in line with our philosophy.
What distinguishes Príme from other real estate developers?
We don’t do “just anything”. We build/develop projects that will enhance the city, add value. Also, when you develop a quality product it is easy to sell it. A good, well thought out, well crafted product is easy to sell. Fortunately, the assets we have, we always sell them before they are completed. Freedom 49 was all sold eight months before it was finished. With BOW 123 and NAU 30 it will be the same.
Will Portugal continue to be a “fashionable” destination and attract investors?
It is no longer like in 2017, when I was developing Liberdade 49, thinking: “What if”. It is no longer like that, investors have already arrived, the Portuguese who were abroad have already returned. In other words, it is no longer thinking that Portugal can be a bet, but that Portugal is a bet.
And in the case of the ultra, ultra-luxury market segment that you talked about, is there more and more demand? Madonna has been here and several other celebrities have invested in real estate in the country. Are these factors helping to “feed” this interest?
Totally, there are many people interested. There’s a big range of “quality” people. There is not the problem that other countries have, where the focus is different, such as nightlife or parties. In Portugal, the focus is very much on sport, nature and family, family values.
It’s not Príme’s niche market, but how do you see the problem that exists in Portugal related to the need to invest more and invest in housing for the middle class?
It is an issue that has to involve the chambers and requires organization in order to develop projects at a more sustained pace. But it is clear that more needs to be done. It is also clear that more needs to be developed, because there are many areas in Lisbon where it is possible to increase the offer. Perhaps also bet on improving and increasing infrastructure, mobility.
Investing in Porto is not in Príme’s plans?
We like Porto very much. It’s a city that has a huge potential, but we are very focused on Lisbon. We have the team here, we know the city and there is still a lot to do. We believe we add more value here, not being so dispersed. And, in fact, the interior of the country is right next door.
“The message I want to leave is that real estate development in Portugal is not a doubt, but a reality. The country is growing and will continue to do so. Príme’s bet is Portugal, and we are only investing in Portugal and in the long term ”
Are there still properties in Lisbon that can be rehabilitated and have the potential to be transformed into luxury residential projects?
I wouldn’t say there are many, but there still are. As in all cities, it is not a particularity only of Lisbon, there are many properties that are abandoned and stand still for years due to inheritance issues, for example. It happens all the time. Our bet is for the long term and, as I said, we like to think more about the possibility of giving a new use to buildings, transforming them from offices into housing, for example.
Has this change of use process, due to licensing delays, affected Príme’s activity in any way?
We don’t have much reason to complain, of course if they improve the response times perfect. The rules are clear. If you interpret the rules, the laws, everything is fine. The problem is when, suddenly, you want to increase the areas, for example, when the rules do not allow you to do so. Before we buy a property, we interpret the rules and we know what we can do. Then we know that it’s just a question of time, of how long the council will take.
So, is it clear that Príme has its heart set on Portugal and will continue to invest in the real estate sector?
The message I want to leave is that real estate development in Portugal is not a doubt, but a reality. The country is growing and will continue to do so. Príme’s bet is Portugal, and we are only now investing in Portugal and, as I said, for the long term.
