VG Visie Daily #39: Front row in the Portuguese high-end real estate market with Marinha Real Estate

Anyone looking for a property in the most beautiful locations in Portugal cannot overlook João Guerra. With his Marinha Real Estate, he has access to the entire high-end market. Moreover, he also develops exclusive villas along the Portuguese coast. “Due to the scarce supply, prices will continue to rise in the coming years.”

The Netherlands is never far away for João Guerra. He worked at Heineken and Unilever, gave football clinics with Edgar Davids, and has been long-time friends with the Van Veggel family, known for Multi and Timeless Investments. Nowadays, he guides many Dutch people to their dream Portuguese home. He owes his entry into the real estate market to the Dutch, he says. “In 2009, I founded the Football Dream Factory company with Luís Figo’s football schools and a scouting and sports marketing company named Dream Football also with the former portuguese Captain of the National Team. By coincidence, we did football clinics and scouting events in Multi’s shopping centers with famous players like Ronaldinho and Edgar Davids. In 2015, I randomly met with Benno Van Veggel in Quinta da Marinha, the prime location in Portugal and where Marinha Real Estate’s office is now located”

“We became very good friends, and Benno – a very gifted tennis player – became my partner in my football businesses in 2016. At that time, during our tennis sessions, Benno would share with me very inspiring stories about his Portuguese real estate adventures when he started developing offices and shopping centers in Lisbon for Multi from the late eighties. That’s how I got fascinated by the real estate world and started helping friends and acquaintances in their search for their ideal home in Portugal. It turned out I had a knack for it, which led me to establish Marinha Real Estate in 2016. I consider Benno as my mentor in real estate. More from a distance, I believe I also learned a lot from his brother Hans, from the stories Benno used to share with me and later when I got to know him Benno could be a perfect role-model for his perfect balance of doing business and having fun while Hans for his deal focus.”

Marinha Real Estate is a boutique broker in the high-end segment, he continues. “Our base is the coastal town of Cascais in the Quinta da Marinha district. This area, between the capital Lisbon, beautiful natural areas, and the Atlantic Ocean, is one of the most beloved residential areas. With Marinha, we offer clients a one-stop shop; we deliver the properties ready to move in and, if necessary, we also take care of financing or co-investors. Moreover, we are independent advisors. We have our own property offer but also give our clients insight into the rest of the market offer. Thus, we also work together with Sotheby’s, JLL, and regional brokers. We work together with our clients on a very detailed briefing and then we deliver to them a property shortlist of all the existing properties that best suit them.”

‘PORTUGAL OFFERS THE PLEASURES OF A SOUTH AMERICAN COUNTRY AND THE AMENITIES OF A WESTERN EUROPEAN COUNTRY’

The real estate advisor is transparent about his costs. “The real estate commission in Portugal is 5 percent in general, always paid by the owner of the property. If I sell a property from a colleague broker, we neatly split the commission in half. My clients often have the same background as me; either from the corporate side or on the self-made people looking for the best life. I can empathize well with them and have a personal approach. As a real estate advisor, I am 100 percent committed to my clients. Recently, I viewed 42 villas with a Danish client. Eventually, he chose the first one we visited. That’s okay because I want them to make the best choice.”

Just as the housing market began to recover, Guerra made his entry into the real estate market. “Portugal was first hit by the financial crisis in 2008 and then by the euro crisis from 2012. The European Commission demanded that Portugal make severe cuts. In those years, many construction companies went bankrupt, and all property values plummeted. However, from 2014, housing prices began to rise. Since then, property prices have doubled. What also boosted the housing market after 2012 was the golden visa program, which gave non-EU residents with an investment between 280,000 euros and 500,000 euros, five years’ access to the entire Schengen area. The non-habitual resident program, which gives foreigners the right to ten years of low taxes, also attracted many people. Both have led to billion-euro investments in the higher housing segment.”

Post-COVID Influx

In recent years, the rest of the world has discovered the unique qualities of Portugal. “This country represents the best of both worlds. We have a great climate, beautiful landscapes, the best food, a rich culture, and warm people like those of a South American country. But we also have the infrastructure, quality education and healthcare, and modern facilities of a Northwest European country. Above all, Portugal is a very safe country. I’m 51 and have never been threatened or robbed in my life. Partly for this reason, there has been a huge influx of wealthy expats from the United States and Brazil, where violence and shootings have reached epidemic proportions. For many, the American dream starts in Portugal. Many Scandinavians and Dutch come to Portugal for the sun.”

End of the Golden Visa

From this year, both programs have been discontinued. Without much consequence, declares the founder of Marinha RE. “The reason given by the government is the lack of housing for the local population. However, that’s nonsense. Almost all foreigners buy properties in the higher segment starting from 500,000 euros. The real problem is the shortage of social and mid-priced houses; the expats can’t do anything about that. The prediction that the housing market would cool off with the end of the programs has not come true. There might be a dip in the middle segment from 200,000 to 500,000. But above that, the prices continue to rise. The share of non-Portuguese on the buying and rental market has only dropped from 24 percent to 22 percent.”

‘THIS YEAR AND IN THE MEDIUM TERM, PORTUGUESE PROPERTY PRICES WILL CONTINUE TO RISE’

Positive Outlook

He sees the demand in the high-end market actually exploding. “In the first two months of 2024, I’ve closed as many deals as in the second half of 2023. I’ve just sold a villa for 8 million euros. We can’t keep up with the demand. Another problem is that it takes a lot of time to develop new construction. The advantage is that this makes it a safe investment. The annual price growth is 10 percent. In Cascais, prices rose by 10.8 percent in 2023. Along the most beautiful beaches and cliffs, the growth was even 22.8 percent last year. This is also because there is almost no more room to build in those areas. Most experts expect a decrease in the number of housing transactions this year due to the scarce supply. However, both ECO and JLL and APPII – the Portuguese association of real estate developers and investors – expect house prices to continue rising in 2024. ECO even anticipates growth in the medium term.”

Scarce New Construction

Especially new construction is in demand, he explains. “The market price of luxurious new apartment buildings along the coast is now 10,000 euros per square meter. Near my home, Hilton is developing a serviced apartment project; 40,000 square meters of apartments with hotel service. In the pre-sale that just started, a third has already been sold. Benno and Hans are developing Bay View at one of the most beautiful locations, with indeed a view of the Cascais bay. The complex of 25,000 square meters with four floors in a green setting costs more than 10,000 euros per square meter. The penthouses even cost 20,000 euros per meter. Yet, the apartments are selling like hotcakes even before construction begins.”

Along the coast in Alentejo, south west of Portugal, I am developing a villa project with private pools where residents can make their own medronho liqueur

Mount of Medronho

Recently, the real estate advisor founded his own development company. “Together with Benno, I am currently developing a small-scale touristic-housing project along the coast in Alentejo with twelve villas with private pools and a restaurant. It is surrounded by nature and medronho trees, our national fruit. Hence, the project is named Mount of Medronho, and the future residents will be able to make their own medronho liqueur. A website to test interest has already generated ninety leads. As soon as we contract a builder, construction will begin. We are keeping this pilot project in our own portfolio to rent out. I am already negotiating the purchase of other land positions at the most beautiful coastal locations in Portugal, where I want to realize larger projects.”

Student Projects

With another partner – Eduard Fonseca – he is developing student housing near the University of Santarém. “Fonseca has a long track record in this field. Our first project includes 45 apartments. Investors can acquire a stake for 250.000€. 24 of these “slots” will be sold to investors and 20 percent will be kept by ourselves. The risk for investors is minimal, with a guaranteed annual yield of 6 percent and a guaranteed profit on sale within ten years. If that profit falls short, we will make up the difference ourselves. Moreover, the occupancy rate will always be nearly 100 percent; if there are too few interested students, we are allowed to rent it out to other housing seekers. Over the next five years, we aim to undertake five such student housing projects.”

He does not think about retiring in his own coastal villa in Cascais for now. “I enjoy my work too much. I can also conduct business while walking along the beach. My three children, aged 10, 14, and 17, share my great enthusiasm for real estate. I seriously asked them which of my five companies they would like to take over if I were to stop. I was convinced they would choose my sports companies, especially my 17-year-old son who is a basketball player and sports enthusiast in general. But no, all three want to be in real estate. They find the properties beautiful, the deal process exciting, and of course, the money appealing. So now I know my business will be in good hands in the future.”

Personal questions João Guerra, C.E.O. / Founding Partner Marinha Real Estate

https://www.marinharealestate.com/
joao.guerra@marinharealestate.com