International real estate investment manager Savills Investment Management (Savills IM) has acquired two urban supermarket properties in Portugal for its European Food Retail strategy. The strategy has further equity available for additional purchases and is searching for suitable properties throughout Europe. The focus is primarily on Spain, Italy, the Netherlands, France, Ireland, Sweden and Finland.
The newly acquired supermarket properties are located in Vila Verde in northern Portugal and Montemor-o-Novo east of Lisbon, and are characterised by highly visible, strategically favourable locations with good accessibility. They were completed in December 2020 and March 2021, respectively, and are leased on a long-term basis to Continente, the market leader in Portuguese food retail. Both locations are operated under the urban convenience format “Continente Bom Dia”. The properties have BREEAM Very Good In-Use certifications.. The tenant also installed photovoltaic systems on the roofs after completion.
Kathrin Michalzik, Head of Fund Management Germany at Savills IM, said: “We have once again invested in Portugal for our European Food Retail strategy, and with good reason. The properties are an ideal fit with our strategy of investing in high-quality, sustainable local retail locations that offer clear added value for both tenants and the local population. Furthermore, Portugal and Spain have been among the fastest-growing economies in the eurozone since the coronavirus pandemic. Moderate inflation, positive momentum in the labour market, rising real wages and a booming tourism sector are driving growth in retail sales on the Iberian Peninsula. Strong fundamentals in Spain and Portugal, combined with attractive price levels, are opening up exciting investment opportunities with an attractive risk/return profile.”
The strategy currently holds 67 properties. It has already acquired supermarket portfolios in Portugal and Spain in 2024 and 2023. Overall, the portfolio is diversified across seven European countries.
Ian Jones, Director of Investment, Savills Investment Management, said: “This is another excellent addition to our country-diversified portfolio of core European Food Retail, a sector which has proven its resilience through the pandemic, adapting to higher inflation and the evolution of consumer shopping habits. The opportunity in the sector is particularly compelling in the current environment, providing access to essential real estate with defensive inflation-linked income, high covenant strength, and where tenant demand continues to evolve and strengthen in the supermarket sector.”
Morais Leitão (MLGTS) acted as Legal Advisor, Arcadis served as Technical Advisor, PwC was the Tax and Financial Advisor, and C&W acted as Commercial Advisor.
