Portugal is becoming the main market for Krest, where it aims to invest in the construction of affordable and sustainable housing, following the “Environment, Social, and Governance” model. Reinforcing its growing commitment to Portugal, Belgian company Krest Real Estate Investments plans to invest a total of €150 to €200 million over the next four years, adding to its current portfolio of €350 million. In an interview with Vida Imobiliária, Claude Kandiyoti, CEO of the real estate developer, states that the company intends to “create sustainable projects for the Portuguese market, following the ‘Environment, Social, and Governance’ trio. We want to create a new way of living.”

Portugal is increasingly becoming the primary market for Krest, which is already downsizing its operations in Belgium, a more mature market with fewer opportunities than Portugal. The CEO considers this a “hot” market, still in growth, with “many opportunities.” He expresses confidence regarding the pandemic but warns that “we need much faster licensing processes to address the current housing and office shortage we have,” he emphasizes.

Among Krest’s recent projects is Jardim Miraores, a residential complex of 120 apartments and three buildings, two of which are already under construction, with over 80% of units sold in pre-sales, mostly to Portuguese buyers. Claude Kandiyoti highlights that this is “a very sustainable project, with many terraces,” which led to “many more inquiries during confinement than in a normal situation.” He assures that the project “is working well, in line with our objectives.”

On the other hand, the new Moxy hotel in Parque das Nações, Lisbon, has already been completed and is set to open in June. The hotel will be part of a mixed-use real estate complex, which also includes the K Tower office tower, construction of which began two weeks ago. With an investment of €55 million, the complex is expected to be fully completed by April 2023. In addition to offices and the hotel, it will include green and public spaces, or a street art component. The goal is “for people to live both outside and inside the buildings. Initially, the gardens were more decorative, but that changed with the pandemic,” explains the CEO.

Further south, in the Algarve, the Lakes 24 leisure project in Vilamoura is under construction, featuring a set of 25 apartments near the marina, 70% of which are already sold. Representing an investment of €10 million. Additionally, the Horizon project, a €52 million development with 129 apartments near Forte Novo beach in Quarteira, is in the licensing process. Kandiyoti emphasizes that this “is a very sustainable and low-density project. It will be NZEB (Near Zero Energy Building), and we are receiving many inquiries, mostly from Portuguese, and we haven’t started sales yet. We expect to receive licensing within a few months.”

In Porto, one of the group’s most recent developments is located. Still unnamed, the project planned for the Campanhã area is designed by Eduardo Souto Moura and will cost a total of €20 million. The development will feature around 4,000 square meters of offices, 7,500 square meters of housing, and 3,000 square meters of hotel (“short/medium stay”), including restaurants. This project will also follow the “live, work, play” concept. It will be “100% sustainable, also NZEB. We believe a lot in this area of the city and the need for affordable housing,” says Kandiyoti. The licensing request should be submitted to the Porto City Council within a few months. “We plan to start construction within a year and a half. We want good projects, more than fast projects, to meet market needs,” he explains.

Also in the plans is a “major project” of this kind, a mix of housing and offices, for the Greater Lisbon area, to be developed over the next 5 to 6 years. Still, the CEO says it’s too early to reveal more details to the market.

Affordable housing is possible without public programs

Claude Kandiyoti highlights the need for housing for the middle segment in Portugal and believes it is possible to create this supply even without participating in existing programs, whether from the government or municipalities. “We can create this offer, namely by reducing the area of the apartments and working on construction costs while maintaining quality.” He believes that “the available affordable housing programs are not attractive to our business model, despite being distinct. In the areas where we are interested in investing, in Porto, for example, similar tax benefits already exist to those promised by municipal programs, as it is located in ARU, for example. We only pay 6% VAT on construction and do not have other restrictions,” he explains.

Sustainability is a priority

Krest does not give up sustainability and wants all its projects to be NZEB. “It is one of the challenges we immediately pose to architects; the project must be sustainable from the start, and the energy footprint must be zero.” Partner architects must be able to find these solutions; “it is a criterion for working with us.” Krest is developing over 6,000 housing units and over 85,000 square meters of offices throughout Europe, and in its experience, “it costs us an additional €100 per square meter if we follow these sustainability principles. It is not normal for them to tell us that the cost will be 40% higher; we have to make it sustainable without a significant cost increase.” But, for that, “we need municipalities to be clear and understand what sustainability is. If we submit projects with new techniques that are not then approved, we are stuck, so we need to maintain that dialogue.” On the other hand, “we need to understand how we will help clients understand their role in more sustainable housing: fewer square meters, larger terraces, fewer cars, more public transportation. It’s a long-term process.”

“Being a real estate developer today is complicated all over Europe”

In Claude Kandiyoti’s experience, “being a real estate developer today is complicated all over Europe. Licensing processes are complicated everywhere, and that’s why we have so many housing shortages. In Portugal, the process is slightly slower compared to Belgium, for example, but there the problems are more political, and here it has more to do with bureaucracy,” he explains. The Krest leader ensures that “we want to convey the message that we are here to stay, and we work on serious communication between authorities and real estate developers. We need quick answers.” On the other hand, he emphasizes the need “for a clear procedure to understand what is needed to move the project forward,” and the definition of timelines because “it is impossible to work on projects worth tens of millions of euros without knowing when we will have answers, licensing, etc.” And he specifies that currently, “on average, we have our licensing in 20 months, it is

a long time, it is almost as long for the license as for the project itself. And that costs a lot of money.”