Bondstone Aims to Establish Itself as a Leading Investment Platform in Portugal

Paulo Loureiro, CEO of the real estate investment and asset management company Bondstone, spoke with Público Imobiliário:

How is Bondstone positioned in the Portuguese real estate market?

Bondstone is a private equity firm specializing in the development and management of real estate projects in Portugal across various segments. We attract international investment (primarily from the USA and Europe) that is entirely channeled into the development of our cities, particularly for residential projects aimed at Portuguese families and support infrastructure for the economy. We aim to position ourselves internationally as the go-to investment platform in Portugal for investors who believe in the potential of our real estate market and country. We have a flexible investment approach, a fast and efficient decision-making process, and a dynamic team supported by an investment committee with extensive international experience.

How did the acquisition of Louvre Properties’ structure and team come about?

Louvre Properties has developed several notable residential projects over the past few years and formed a solid management team that I had the opportunity to coordinate. It made perfect sense to integrate Louvre Properties’ team and structure into Bondstone due to the synergies we can achieve together. Louvre Properties remains the Bondstone group’s brand for smaller urban rehabilitation projects targeting a more international clientele. However, our future will primarily lie in other segments and types of projects more geared towards Portuguese families and businesses.

What sets you apart from the competition?

We have a local team but take a very international approach. Our financial and operational partner is a Belgian group (Universtone) with over 25 years of experience in various countries, including France, Belgium, and South Korea. We aim to bring the expertise gained in these countries to Portugal, especially in creating new projects for the middle class. For example, in South Korea, Universtone develops operations with an average construction area of 150,000 m², having developed over 4,000 apartments for the middle class. It’s a completely different reality.

What investments does Bondstone have in perspective? How has the pandemic affected your investment plan?

Before the pandemic, we aimed to invest around €400 million by the end of 2021 in various segments, with a primary focus on residential projects for the middle class (both for sale and rent) and segments supporting economic activity and our country’s competitiveness, including offices and “alternatives” (student residences, coworking, and senior living, for example). Despite the current situation, we still believe in the ongoing shortage of new housing for the middle class and maintain our investment plan in this segment. For other segments, we will need to carefully assess demand and adjust our investment plan based on market evolution. We are also exploring new segments that were not priorities before the crisis. To date, all our investors have reiterated their desire to continue investing in Portugal, which is a very positive sign for the future.

Are you considering participating in the “Lisboa Renda Acessível” program recently announced by the Lisbon City Council?

Absolutely. I firmly believe that the sustainable development of our cities will only be possible through close cooperation between public and private entities. From what I’ve seen, both the Lisbon and Porto City Councils are very committed to establishing these cooperation channels, and we are fully available to collaborate in this process, both in terms of investment and participating in think tanks on what we want for our cities. We need to bring Portuguese families back to the city centers and develop internationally renowned economic infrastructure to increase our competitiveness. Together, we are stronger, without a doubt.

How have you been dealing with the pandemic? Is this a good time to invest?

Initially, our priority was to monitor the nine residential projects we have underway, seven of which are concentrated in Lisbon. Regarding new investments, before the pandemic, we were analyzing a set of projects for the middle class representing an investment of over €150 million (of which €100 million in Lisbon), from our international financial partners. Over the past three months, we were forced to temporarily postpone these transactions. However, given the positive developments, we decided to resume the analysis of these processes and expect to make investment decisions soon.

What are your expectations for economic recovery and the real estate market?

The recovery of the real estate market depends on the economic recovery and vice versa. Without a functioning economy, there is no real estate market: families cannot buy homes, and companies delay new investments. On the other hand, the real estate market was undoubtedly one of the main drivers of the country’s economic recovery post-Troika, and I am sure it will be again post-pandemic, especially through attracting international investment, which is crucial for leveraging our economic recovery. We must promote Portugal as a post-Covid “safe haven” to continue attracting foreign investment across various industries and to recover the tourism sector, which significantly impacts our economy. We want to be an active part of this mission to promote Portugal as an investment destination, continuing the renewal of our cities and increasing the country’s economic and technological competitiveness.

What role can public entities, particularly City Councils, play in this recovery?

City Councils play a crucial role in promoting our cities as “investment-friendly” destinations. On one hand, through simplifying, streamlining, and debureaucratizing licensing processes, and on the other, through promoting investment incentive programs. The measures recently announced by the Lisbon City Council are going in the right direction: the creation of the Digital Urbanism platform, team reorganization, and simplification of project analysis are concrete measures that could positively impact in the short term. Additionally, programs like “Lisboa Renda Acessível” and “Lisboa Empreende+” are essential for exploiting the city’s strategic potential through collaboration between public and private entities.

And the Government?

There are several possible measures, from resuming the Golden Visa program in its original format to reducing the VAT rate (from 23% to 6%) on new construction for the middle class, whether for sale or rent. The APPII, through Dr. Hugo Santos Ferreira, has done an extraordinary job in preparing various measures and coordinating between public and private entities. The recently announced “Relançar” program is an excellent initiative by APPII to propose mechanisms that facilitate our economy’s recovery.

Do you plan to launch new projects soon?

Yes, we plan to launch the pre-sales of two new projects in Porto and Cascais during the second half of this year. We are also negotiating the acquisition of two substantial new projects in Lisbon, aimed at local families.

It is often said that crises bring good opportunities. Do you agree?

I completely agree. I am sure there will be excellent medium-term investment opportunities in different segments, which could reward the best-prepared companies with investment capacity and adaptability to a new context. We will continue to analyze new projects constantly. As a sign of our commitment, we hired a CFO (António Dias) with experience in the private equity industry during the pandemic to support the execution of our investment plan.

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