The city of Porto, Portugal, is emerging as a hub for the build-to-rent (BTR) model, with 463 affordable rental homes currently in development through public-private partnerships. This model aims to provide affordable housing options while attracting private investment. The BTR model has gained significant attention in recent years, particularly in Portugal, where there is a shortage of affordable housing. The Porto Vivo, SRU, a municipal company, has been instrumental in promoting this model, partnering with investors to develop new rental properties.
The lack of affordable housing for rent remains a significant challenge in Portugal, with demand outpacing supply. Despite growing interest from national and international investors, new housing production remains focused on the sales market, leaving the potential for long-term rental segments largely untapped. The BTR model seeks to bridge this gap by encouraging private investment in affordable rental housing. According to Andreia Júnior, Vice-President of the Porto Vivo, SRU, the municipality has made housing a priority, with the "Porto com Sentido" program aimed at providing affordable housing options for families with limited incomes.
Pedro Baganha, Cities & Investment Director at Dils, notes that there is a structural imbalance between housing needs and market response. With nearly 75% of Portuguese homeowners, a significant portion of the population struggles to access housing. Demographic changes and shifting family structures have exacerbated this pressure, with limited new housing supply. Investment has recovered but remains largely focused on the build-to-sell (BTS) market. Baganha estimates that Portugal needs around 300,000 new homes, representing a potential investment of €45 billion.
The Porto Vivo, SRU has demonstrated success in mobilizing private investment and reducing risks associated with BTR development. Luís Archer, Administrator of Porto Vivo, SRU, explains that the model offers benefits such as tax exemptions and reduced municipal fees. The contractual model allows for rent anticipation for up to two years, ensuring full occupancy and maintenance of properties. Archer emphasizes that this offering is not for social housing but rather for quality, durable homes that facilitate maintenance and prolong lifespan.
The BTR model has attracted institutional investors, including Ageas Group Portugal, which is channeling funds into affordable rental housing. Sylvie Vanhoenackere, Head of Real Estate at Ageas Group Portugal, highlights the importance of stable policies and long-term guarantees for investors. The discussion on the BTR model, moderated by Ricardo Guimarães, Director of Confidencial Imobiliário, brought together representatives from Porto Vivo, SRU, Sonae Sierra, Grupo GFH, and Ageas Group Portugal.
The experience of Porto Vivo, SRU demonstrates that stable public policies and private investment can yield concrete results. The company aims to continue developing BTR projects and attracting larger-scale operations. With several projects underway, including a 124-unit development in partnership with Ageas and a 331-unit project in Campanhã, Porto Vivo, SRU is confident in the potential for growth.
As the BTR model gains momentum in Porto, investors and developers emphasize the need for stability and predictability in policies and regulations. With the right framework in place, the BTR model could be replicated in other cities, addressing Portugal's affordable housing shortage. Key players in the sector will continue to monitor the market and advocate for policies that support the growth of the BTR model.
Key points
- The Porto Vivo, SRU has 463 affordable rental homes in development through public-private partnerships.
- The BTR model aims to provide affordable housing options while attracting private investment.
- Stable policies and long-term guarantees are crucial for attracting institutional investors to the BTR model.
