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 rightfully come to expect from us over the many years we have been in the property development business.”
The mixed-use development, named LX Living, will comprise 151 apartments, 1341m² of retail space with shops and restaurants, seven above-ground residential floors and 187 underground parking spaces. It will be situated in one of the most sought-after and convenient locations in Europe’s sunniest capital.
Neworld’s partner GMG Real Estate, has an impressive 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 €2 billion. The opportunity to joint venture with GMG Real Estate was the important trigger for establishing Neworld.
Says Rabie “we have always understood the importance of identifying the right partners to work with in a project of this nature. We feel honoured to have been invited to team up with GMG on this first project. They are like minded people with a great reputation and excellent track record.”
And Newman Leach, the head of GMG Real Estate comments “we are thrilled to be developing this project with John Rabie and his Neworld team. LX Living is set to become the premier residential development in Lisbon.”
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 and unique 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 select 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 number of 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 all of Europe for investment in residential Real Estate.”
The design of LX Living includes a range of apartment sizes from studios to one, two, three and four bedroomed units. The mix of units will service both the short and long term rental markets. The building includes an impressive array of amenities – a well-equipped gym, day spa, two swimming pools and ample underground parking. The street level will encompass 1400 m2 of retail space including convenience shopping and restaurants.
LX Living is well located 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 only a five-minute walk to the magnificent Avenida de Liberdade, the heart of upmarket shopping and galleries in Lisbon. It is also within walking distance of one of Lisbon’s prime office markets, the Amoreiras shopping centre, Lisbon’s premier French school and a number of five-star hotels. To top it all, 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 smaller units (a total of 88 apartments) with a price range of €270 000 to €650 000. A significant opportunity for South African investors is the fact 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 leveraged yields of well over 8% can be achieved by apartment buyers.
“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 best of breed service providers in the areas of end user finance, golden visa application and tax/accounting services. We will connect our clients with these professionals as and when requested. 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 cherry on the top however is the fact that an investment of €500 000 and above will mean that the investor’s family will qualify for obtaining a Golden Visa and the achievement of permanent residency and citizenship for the family 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 comments “early signs strongly indicate that many of our investors want the visa. We are delighted that a senior partner from Edge International Lawyers in Lisbon will be at our launches in Cape Town (30 April) and Johannesburg (6 May). Edge are experts in this area and will be providing a customised service to any investors seeking their advice and support during the 5year Golden Visa process.”