The European real estate sector is currently navigating a dynamic period,characterized by cautious optimism and shifting investment strategies. While abroad recovery is underway, driven by stabilizing interest rates and resilient demand in certain segments, Portugal presents a unique case study, where a ongoing housing crisis is paradoxically creating opportunities for strategic real-estate projects and investors, particularly those considering the Business partnership visa pathway.

European Real Estate: A Sector in Recovery and Rebalancing

After a period of adjustments, the European real estate market is showing signs of renewed Vigor. Forecasts for 2025 and beyond point to a gradual improvement in total returns. Several key trends are shaping this recovery:

• Yield Stabilization  and Improving Returns: Following a significant revaluation of yields, the market is nearing its bottom. Investment liquidity is increasing, and direct real estate is expected to draw capital back in during 2026.
• Sectoral Divergence: The recovery is not uniform across all property types. For a broader perspective on the market. According to the  Houlihan Lokey: European Real Estate Market Update following conclusions can be drawn.
   
  • Residential  (Living): This sector continues to demonstrate robust fundamentals, with low vacancy rates across Europe's top 30 cities driving double-digit rental growth in some areas. Rental growth is projected to outpace inflation, making it a highly attractive segment for investors.
   
  • Logistics: While take-up has slightly moderated, logistics vacancies remain low in prime European locations. Strong rental growth, driven by limited supply and increasing  competition for prime assets, continues to make this sector a favored investment.
   
  • Offices: The office market is experiencing a significant shift, with a growing gap between high-quality, amenity-rich spaces and older, less adaptable buildings. Prime office rents are rising due to shortages, particularly in cities like London, Amsterdam, Lisbon, and Paris, drawing investors back.
   
  • Retail: After being out of favor, the retail sector is showing signs of recovery, boosted by increased consumer spending and rising real wages. Investment in retail properties, particularly in prime locations and specific formats like retail warehouses and supermarkets, is gaining traction.
 
• Supply Constraints: A persistent challenge across much of Europe is the limited supply of new housing and high-quality commercial spaces. High construction costs, development finance rates, and bureaucratic hurdles continue to impede new     development, supporting rental growth and property values in undersupplied markets. For a global real estate outlook, including Europe, consider the CBRE: Real Estate Outlook Global - CBRE Investment Management.

Portugal's Housing Crisis: A Problem and a Peculiar Opportunity

Portugal's real estate market has been a standout performer in recent years, with property prices nearly doubling over the past decade. However, this growth has beenaccompanied by a significant housing crisis, particularly in urban centers like Lisbon and Porto. This crisis is rooted in:

• Insufficient Housing  Stock: A chronic shortage of new builds, coupled with booming tourism and a focus on high-end developments, has led to a severe supply-demand imbalance.
• Bureaucracy and High  Costs: Complex licensing procedures, excessive taxes, and rising construction costs make it difficult and time-consuming to build new homes, further exacerbating the supply issue.
• Historical Policies: Previous attempts to address the crisis through tight regulation and rent controls often deterred investment, shrinking the supply of available rentals.

However, this very crisis is now creating an intriguing opportunity for strategic real-estate projects. The Portuguese government, recognizing the urgency, has launched the "Construir Portugal – New Strategy for Housing." This ambitious program, with a substantial budget, aims to significantly increase housing supply by 2030, particularly in major urban and coastal regions. Key aspects of this strategy that benefit investors include:

• Increased Public  Housing Investment: A significant ramp-up in public housing investment signals a commitment to increasing supply.
• Restoring Confidence in the Rental Market: The new strategy reverses controversial policies like forced leasing of vacant homes, signaling greater respect for property rights and aiming to attract landlords and private developers back to the     rental market.
• Incentives for Construction: The promise of a reduced VAT rate (6%) for construction and rehabilitation, if swiftly implemented, could significantly lower building costs and stimulate development.

For investors, this translates to a shift from speculative growth towards income-orientedstrategies, such as rental investments and public-private housing partnerships. Off-plan developments, especially in areas with persistent housing deficits like Lisbon, offer strategic investment opportunities for both rental income and future resale values. These projects often incorporate modern amenities and sustainable designs, appealing to contemporary buyers and renters. For further details on investment opportunities in development, referto Portugal Homes: Housing Crisis in Portugal - Why invest in Development Opportunities.

The Business Partnership visa (D2 Visa) : A Gateway for Entrepreneurial Real Estate Investment

While the popular Golden Visa program has seen significant changes, particularly the discontinuation of direct real estate purchases as a qualifying investment route (as of October 2023), Portugal still offers attractive pathways forinternational investors. The D2 Visa, also known as the Entrepreneur Visa,presents a compelling alternative for those looking to leverage Portugal's realestate opportunities.

The D2 Visa is designed for individuals who intend to start a new business or invest in an existing one in Portugal. Crucially, there is no definedminimum investment amount for the business itself, making it more flexible than previous real estate-focused visa programs. While the investment amount is not fixed, applicants must demonstrate:

A viable business plan: This plan should detail the type, worth, and timeframe of the intended investment, showcasing its economic, social, scientific, technological, or cultural relevance to Portugal,and ideally, its potential for job creation.

Sufficient financial means: Applicants must prove they have adequate funds to sustain themselves in Portugal for a year(currently around €10,640 for the main applicant, with additional funds fordependents).

Proof of accommodation: This can be a rentalagreement or proof of property ownership in Portugal.

How the Business Partnership Visa (D2 Visa)  connects to real estate opportunities:

Investing in real estate-related businesses: Instead of directly purchasing residential property for the Golden Visa,investors can establish businesses that address the housing crisis. This couldinvolve:

Property development companies: Focusing on new construction, particularly affordable or mid-market housing.

Property management companies: Capitalizing on the growing rental market and the need for professional management.

Urban regeneration projects: Investing in there habilitation of older buildings, aligning with government initiatives.

Co-living or co-working spaces: Meeting the evolving needs of the modern workforce and digital nomads.

a personal residence: While the D2 visa doesn't require a real estate investment for the visa itself, owning or renting a property for personal accommodation is a prerequisite. This allows investors tointegrate into the local market while pursuing their business ventures.

Long-term residency and citizenship: After five years of legal residency under the D2 visa, individuals can apply for Portuguese citizenship or permanent residency, offering long-term stability and access to the Schengen Area.

Meer Group trough its real estate partnership programme, is offering you an unparalleled opportunity for investors/entrepreneurs to become a legal partner in our real estate development company established in Portugal. We will help you In preparing robust business plan, getting you NIF, in opening bank account for you. We will also apply for the business partnership visa. This will eventually get youpermanent residency of Schengen countries, and later on you can become a citizen of Portugal.

Our expert’s team is all set to talk to you and clear any doubts regarding investments and returns structures andalso the exit plan.  Compressive guide is available on ‍.

In conclusion, the European real estate market is on an upward trajectory,with residential and logistics sectors leading the way. Portugal, despite its well-documented housing challenges, is actively working to address these issues, creating a fertile ground for strategic real estate investments. The D2 visa, by focusing on entrepreneurial ventures, offers a viable and attractive pathway for investors to not only capitalize on these opportunities but also contribute to the long-term sustainable growth of Portugal's real estate sector. The key for investors lies in understanding the evolving regulatory landscape, identifying unmet market needs, and aligning their projects with Portugal's national housing objectives. Meer group can be your friend,philosopher and guide in this journey.