New build or regenerate? That is the question!
NEW BUILD OR REGENERATE? THAT IS THE QUESTION!
After a long wilderness, throughout the last decade regeneration finally took off in Portugal and, at the height of the crisis, it was the driving force of Portuguese real estate. However, now that the sector is in one of the best phases ever and the need for new supply is severe, where do the best opportunities lie?
A key question in the property development agenda, and for which we present the opinions of the APPII associates below:
ANDRÉ JORDAN GROUP – CEO
Urban Regeneration is without doubt a great opportunity to revive cities, especially city centres, which are generally historic and have particularly interesting characteristics. In the absence of an intelligent economic, tourism, residential and tax structure, and in the face of a misconceived defence of electoral – and therefore short term – values, the result is frequently degradation and lack of interest in the building stock from a wide range of potentially interested parties. The example of Lisbon in the past half century (or even more), is undeniable proof of this.
Urban Regeneration enables the identity of cities to be innovated or maintained, updating properties to meet the demands of today’s clients, whether corporate, private or tourist. However, it’s important not to confuse profound regeneration with mere renovation, even if it is undertaken with great aesthetic quality. In serious regeneration, the complexity and cost structure are extremely demanding and works carried out in the past cannot be considered in the same light. The product currently offered to buyers, investors or residents is of superior quality. Indeed, there is no comparison. The only thing we can criticise is the laxness in the requirements of certain technical characteristics such as energy, electrical, mechanical certification and the capacity for anti-seismic resistance.
New build – with quality – has always been particularly interesting because, aside from focusing on innovation, design, architectural creativity, driving new residential, corporate, retail and even logistics and industrial solutions, it is also in high demand due to the strong quality demands on every level. This is the case with Lisbon Green Valley, a case-study in innovation and sustainable construction, certified and considered by the LiderA System as the most sustainable homes in Portugal, with various distinctions and almost achieving NZEB (Nearly Zero Energy Buildings) – a requirement included in new construction as of 2021 – and whose widely certified and award-winning products are a differentiating factor valued by an increasingly demanding clientele. Everyone would gain if regulations and taxes on urban regeneration developments were equally demanding.
We can confirm that there are opportunities in both fields. If on the one hand, in historic centres where the highest values are practised per square metre, this is a limited product where construction costs are higher, new build may include different types of products for various market segments in multiple locations, offering investors a wider range of opportunities. In any case, the expertise, experience and reputation of all players in the value chain is the key factor.
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