Cape developer launches European development company with R1,4b Lisbon project

Cape developer launches European development company with R1,4b Lisbon project

Artist’s rendering of LX Living in Lisbon, Portugal.

John Rabie, one of South Africa’s most successful property developers, has recently embarked on a substantial new venture in Portugal.

In a joint venture with Geneva-based GMG Real Estate, Europe-domiciled Neworld (the new operational body that will spearhead Rabie’s residential and mixed-use developments beyond South Africa) is leveraging homegrown expertise to create a brand-new, €90 million (over R1,4 billion) residential and retail development in the historic heart of Lisbon, Portugal.

Says Rabie: “Lisbon has so much to offer. An enchanting city with a wonderful climate, zero crime and plenty available for the growing tourist market. We feel very confident that we are at the right place at the right time and that we will be able to offer our investors the capital growth and returns that they have come to expect from us over the many years we have been in the property development business.”

The mixed-use LX Living development will comprise 151 apartments, 1 341m² of retail space with shops and restaurants, seven above-ground residential floors and 187 underground parking spaces.

Neworld’s partner GMG Real Estate, has a track record of investment and value creation in urban mixed-use real estate in the UK, Switzerland, Germany and Portugal. Since inception, GMG and its partners have transacted on 29 successful developments representing a market value of approximately €2bn. Rabie says the opportunity to joint venture with GMG Real Estate was the important trigger for establishing Neworld.

GMG Real Estate has enjoyed excellent support over the years from its strategic financial partner Skybound Capital – a global wealth management business, providing a diverse range of investment products for family offices, private clients, advisors and institutions.

In London and Lisbon, GMG Real Estate has developed a large and experienced operations team, focused on construction, project development and turnkey rental management services.

Rabie has assembled a team of people who have relocated to Lisbon and are now working side by side with their GMG Real Estate counterparts.

Says Rabie: “We have spent the last few months getting to grips with the market in Lisbon. Our research has confirmed the opinion of reputable experts regarding the strong fundamentals that are driving the shortage of residential accommodation in Lisbon. We now understand why these experts have rated Lisbon as the number one city in Europe for investment in residential property.”

The design of LX Living includes a range of apartment sizes from studios to units with one, two, three and four bedrooms. The mix of units will service the short and long term rental markets. Building amenities include a gym, a day spa, two swimming pools and ample underground parking. The street level will consist of 1 400 m2 of retail space including convenience shopping and restaurants.

LX Living is in the suburb of Amoireras. It enjoys excellent public transport links, is close to the major coastal roads to the north and south and is a five-minute walk to the Avenida de Liberdade, the heart of shopping and galleries in Lisbon. It is also within walking distance of one of Lisbon’s prime office markets, the Amoireiras shopping centre, Lisbon’s premier French school and a number of five-star hotels. Rabie says plans are well advanced for the construction of a new metro station right alongside LX Living which will link the property with the well-established underground rail system that services the city.

LX Living Investors will receive a 4% rental guarantee on the purchase price of their apartment for the first two years. This guarantee will be available on the 88 smaller units priced from €270 000 to €650 000.

Rabie says a significant opportunity for South African investors is that they will be able to access end user finance at an interest rate of below 2% and loan-to-value of up to 75%. This will mean that buyers can achieve leveraged yields of well over 8%.

“We want to make it as easy as possible for our investors from South Africa to enter the Portuguese market. We have therefore identified three service providers in the areas of end user finance, golden visa application and tax/accounting services. We will connect our clients with these professionals when needed. A good example is the relationship that we have established with executives of Novo Banco. Our investors will be able to engage directly with Novo Banco executives and negotiate the appropriate end user finance solutions that meet their specific needs.

“The big drawcard is that an investment of €500 000 and above will mean that investors and their families will qualify for Golden Visas and achieve permanent residency and citizenship at the end of a five-year period. The quality of life in Portugal together with the tax incentives on offer are two reasons why the Portuguese Golden Visa offer has been receiving so much interest from all parts of the world since its implementation in 2012.”

Rabie says early signs strongly indicate that many of investors want the visa.

“A senior partner from Edge International Lawyers in Lisbon will be at our launches in Cape Town on April 30 and Johannesburg on May 6. Edge are experts in this area and will be providing a customised service to any investors seeking their advice and support during the five year Golden Visa process.”

LX Living has been designed by leading Lisbon-based, global architectural firm Saraiva and Associates. The new development will feature clean, modern lines, incorporating expansive balconies and roof gardens, and relaxing and efficient living spaces.

Call Anton McElhone on 083 506 7829 and Michael McElhone on 064 756 4960 or email anton@signatura.biz or michael@signatura.biz.