Made of Portugal
Made of Portugal
If we think briefly about Portugal and our people, we become aware of a country that is constantly and globally mentioned; full of entrepreneurial stories, irreverence, and ambition. No wonder, therefore, that more and more companies, investors and people look at our country in a different light; that the Portugal of today is increasingly a country to work, to invest and to live. If Portuguese were the ones who discovered the world in the fifteenth century, today it is Portugal that is being discovered by many other nationalities.
Portugal is a truly global destination, considered one of the best in the world. The last few years have been exceptional, full of business, awards and recognitions that led us even further.
Portugal is fashionable! And at JLL we like to follow trends, to be at the forefront of our sector because we know that we can positively impact Portugal’s perception and projection around the world.
#MadeOfPortugal is a reflection of our professionals which was put together to mark this turning point and emphasize the importance that our country currently shows. It also tells us about the contribution made by real estate industry to the global brand that Portugal is today. It is also a campaign that reflects a new attitude of our brand: a JLL with the ambition to be an inspiring brand, close to people, who makes history and communicates through stories. With the brand of ambition that always defines us.
It’s a project made of people, for people and shows the essence and privilege it is to live in Portugal and what we are made of. This passion we share for all that entails Portugal is something that unites us and, therefore, this campaign is ours, it’s everyone’s.
We chose three people to tell us their stories and explain, each in their own way, what Portugal is made of. But we want to celebrate so many other stories that had a happy ending in our country: companies that just got here, investors who believe in our potential and so many others who have been enchanted by the life we lead.
And for you, what is Portugal made of?
Pedro Lancastre
Portugal Managing Director
Portugal has established itself as a consolidated and very sought after destination by investors from the entire world.
Some of the key factors placing Portugal on the investors’ radar are: a favourable economic cycle and policy, security, solid real estate indicators, namely the gradual increase in rents and sale prices, the
Invest
performance of the tourism market and higher profitability levels than most similar markets.
Simultaneously, Portugal has presented in these years of recovery different opportunities for different investment profiles.
Liquidity in the financial markets at a global level
The implementation of expansionary policies such as quantitative easing has substantially increased liquidity in the financial markets and contributed to very low interest rates.
In parallel, we are witnessing asset allocation strategies with greater geographic diversification, including less core countries like Portugal.
Returning to Portugal, to Lisbon, makes so much sense.
Joana Astolfi
Gradual transfer to alternative asset classes, with real estate holding the largest share
The volatility and risk of the capital markets (Equity), whilst interest rates are at historically low levels making low risk assets unattractive (Bonds) have steered many investors towards the real estate sector, which share represents 9% of total investments.
Economic, Political and Social stability
The political and governmental stability has allowed Portugal to comply with its international commitments.
The country’s credibility is reflected in the return of sovereign bonds that is currently below 2%.
The rating agencies are also more confident on the positive evolution of portuguese sovereign debt. All the main agencies have already placed Portugal in the quality investment level
Portugal’s potential towards the level of main european countries
The economic growth registered in Portugal and the increase in employment placed the country on a converging path with the European Union, which together with the deficit reduction will allow for a decrease of the weight of public debt in GDP. Source: Eurostat
vs. 2013
Country in the world with
Best destination in Europe
Portugal is undoubtedly going through a very positive time.
Last year tourism was responsible for creating more than 50,000 jobs, a result of strong growth in the sector, which contributes greatly to the country’s economic growth.
Key tourism performance indicators have increased sustainably and the tourism market continues it’s diversification. Tourism indicators hit record highs year after year.
Rising rents in the occupational markets
Rents*
38,500
Companies founded in 2017 – twice the number that closed
Source: Statistics Portugal
Source: JLL, SIR
Due to the significant increase in demand, rents have been progressively increasing in the office, retail and residential occupational markets.
In the office sector, Portugal has established itself as a destination for the settlement of several large multinational services and startups, which is reflected in the increase of
coworking spaces. With the increase in tourism and the improvement in Portuguese living conditions, the retail market has also gained a remarkable dynamism.
In the residential sector, the short-term rental market continues to be very dynamic given the increase in tourism while the supply for long-term rental is still scarce.
The imbalance between supply and demand is significant which is explaining the prices being so high. This situation, coupled with the generalized increase in housing prices and the different lifestyle of the new generations, suggests that this market will effectively start to emerge in the medium term.
Good performance of national real estate comparing to other major asset classes
2.7%
Long-term performance of different asset classes in Portugal
Highest GDP growth in the last decade Portugal’s global competitiveness Source: Banco de Portugal,
29th
In the long-term investment, the real estate sector demonstrates a higher return and lower volatility when compared to other traditional asset classes.
Portugal with competitive yields
Despite the Yields in Portugal hitting minimums that have been reached before, the levels of return are higher than in the main European markets.
Prime yields in Europe
S1 2018
Residential values increasing with less mortgage loans than in the past
The housing prices in Lisbon and Porto city centres have skyrocketed over the past few years with the development of new homes mainly focused on the high-end market, and the short-term rental market. However, there is an existing national middle class demand yet to be fulfilled.
+ 24,000
No. of non-habitual residents in 2018
Source: Ministry of Finance, SEF
€ 3,921,500,000
Investment through Golden Visa 2012 – Q1 2018 90% in real estate assets
Continuity of foreign investment incentive programs, namely the Golden Visa and the Non-Habitual Residen status Source: Statistics Portugal
The continuity of foreign investment incentive programs in Portugal is expected. Both programs, the Golden Visa and the Non-Habitual Resident, have shown tremendous success in recent years, with a direct impact on the performance of the housing market.
Mortgage loans have become increasingly accessible. However the volume is still much lower than the previous peak (2007), which reflects a much less leveraged market than in the past.
Source: Banco de Portugal
Business
Factors such as the quality of life, highly skilled task forces and cities like Lisbon and Porto being increasingly more cosmopolitan, combined with very competitive operating costs when compared to European peers, have placed Portugal within the main options for the setup of companies from around the world. The ease of doing business, the existing
support for investment and the potential for growth in terms of competitiveness, complete the list which makes the country increasingly attractive.
An increasingly competitive country
Competitiveness Ranking
Labour
force, quality at competitive costs
Portugal’s position in the ranking of global competitiveness
In the pre-crisis period, high investments were made in public works, namely in the refurbishment and modernization of schools, hospitals and motorways, enabling the country with the best infrastructures.
Portugal stands out on 34th position in the ranking carried out by the World Economic Forum, which compares 140 countries, emphasizing the quality of infrastructures, education, health and technological development.
14th Country with less bureaucracy.
Portugal is an excellent option for the expansion of multinationals and creation of new businesses given its low costs with taxes, labour and occupation. The level of competitiveness, the quality of infrastructures and the capacity to attract talent are also crucial to our country’s competitive advantages.
Portugal has one of the lowest labour costs in Europe, while at the same time it is recognized for the qualification of its human resources.
€9,071 Annual net average income per person
19th Infrastructure Quality. Portuguese roads are in 6th place in the ranking of the 140 countries.
12th Country with less organized crime. 17th Country with the latest technology available. 22nd Country with the longest life expectancy.
23rd Quality of the Education System: quality of future workforce.
26th Country with most transparency in instituitions.
“BNP Paribas, which underscores a labour cost in Portugal three times lower than in France, will occupy more than 70,000 sq m in Lisbon and Porto by the end of 2018 and we know they have ambitious expansion objectives.”
Human Resources are a factor of paramount importance in Portugal’s attractiveness.
“We compared Portugal and countries such as Romania, Poland and Spain.
We verified that Portugal boasts a unique combination of quality resources, available young graduates, hardworking people. People who work, but who ask questions” commented one of the respondents of the survey
“Produce in Portugal: The case of the French Companies”, conducted by Nova SBE.
72%
People between 18 and 64 years old that know at least two languages: english (59.6%), french (21.5%) and spanish (14.8%)
Source: Statistics Portugal, 2017
Source: Eurostat
Source: Eurostat
Workforce costs in Europe
Safety, a key factor of Portugal
Safety is nowadays fundamental for corporate decision-making when analyzing new destinations for internationalization, being a critical factor in attracting and retaining talent.
1st 4th
Best country in Europe for expats to live
Source: Expat Insider 2018, Internations
Most peaceful country in the World
Source: Global Peace Index, 2018
I think Porto is still an oasis… With a lifestyle that few cities can afford the luxury of having.
José Abreu
4. A high tech country
Portugal is a top country in the supply of technological services.
“The giant tech Google considers Portugal to be a leading country in Europe for the digital app economy.”
Portugal is the 8th country in the EU-28 with the highest number of high-speed broadband subscriptions per capita.
29th Country in the world with the quickest internet.
Portugal is a leading country in the execution of operations through the ATM network.
Via Verde, the electronic toll network is portuguese and groundbreaking on a global level in toll management .
Source: AICEP, Estatísticas da Banda Larga da OCDE, Eurostat, Anacom, Statistics Portugal, DGEEC, Nações Unidas, Ookla ranking 2017
Despite the ongoing increase in office and retail rents, values are still far from rents charged in the rest of Europe.
Other upsides include low condominium costs, contractual incentive conditions, and benefits of some real estate and transaction taxes.
Innovation hub
This program was implemented in early 2018 and consists of a residence visa for entrepreneurs from all over the world that want to create a startup in Portugal. 6. Wide range of incentives for investment, attraction and retention of companies
The government is focused on attracting and fostering startups, international events, investors and incubators, such as the case of the Web Summit, Beato Creative Hub and the development of several incubators integrated in universities with access to state funds. The goal is to create diverse hubs of entrepreneurship and creativity.
For example, in Lisbon:
Of new office space expected in the next few years in order to tackle the current lack of supply
Portugal has won several competitions for the settlement of back office services of international companies and is increasingly sought after by technology companies.
6,400 companies founded in 2017
70 incubators, accelerators, fablabs, creative hubs
+50 coworking spaces
+5,000 jobs created in the last 3 years
EU funding programmes, lines of credit and fiscal incentives that instigates investment in Portugal 7.
€400M
Amount available to support startups. Of these, 200 million euros will be made available by the Government through a credit line
€25Bn
Amount of european funds made available to Portugal in the period 2014-2020 in order to stimulate growth and job creation
€24Bn
Estimate of the amount of european funds to be received between 2021 and 2027 under the agreement of the partnership between Portugal and the European Comission
Portugal has been affirming itself in recent years as an increasingly cosmopolitan, competitive, innovative and creative country. It’s the result of a global strategy that has placed the country on a trajectory of growth and innovation never seen before. Portugal has known how
Liveto reinvent itself, staying true to its authenticity.
All of these factors are supplemented with the quality of life and safety with unique and indisputable characteristics in the world.
Quality and lifestyle
Portugal is a small country with a great landscape diversity and low population density. The quality of services and infrastructures and safety are essential requirements for a good quality of life.
2.
Quality health care and education services
In Portugal all citizens have the right and free acess to the public institutions and education.
Similar to the private health services, the public health services have great infrastructures and highly qualified professionals.
The quality of educational institutions and the diversity of international schools present a wide choice in which residents can trust. Portuguese universities have had an excellent international performance, attracting students and teachers from all over the world due to the improvement in the quality of teaching.
20th
Country with best quality of life in the world in 2018
4th
Most peaceful country in the world
Best country in Europe for the expats to live in 73%
1st
Source: Expat Insider 2018, Global Peace Index 2018, Internations, US News Quality of Life Ranking 2018 worldwide
Satisfaction of the portuguese people with the living conditions
12th 1st
Nova IMS: Best Masters degree in the world in Information Management.
Source: EDUniversal
Best health system in the world
Source: OMS
Lagos is my home. I can’t imagine myself living anywhere else. It is the most unique place in the world.
Marlon Lipke
Job and new business opportunities
38,500 8.9% 5 years Unemployment Rate in 2017 Residency Authorization
Companies founded in 2017 – double the number that closed
Source: Statistics Portugal
Post crisis, many investors and companies have been attracted to Portugal due to the excellent conditions and potential they find in our country. On a national level, there is an increasing diversity of business and concepts emerging.
Free circulation in the Schengen Space countries
Residency Visas and Fiscal Benefits
The Golden Visa program is seen as one of the most interesting of Europe. The Golden Visas are destined to non-european citizens and their families, and can be obtained through a variety of investment options, which real estate investment is highlighted:
Minimum € 500,000 in the acquisition of a property
Minimum € 350,000 in the acquisition of a property for rehabilitation
Golden Visa
Tax benefits for Non-Habitual Residents
The program consists of a favourable tax regime for citizens who decide to establish their fiscal residency in Portugal and who have not earned income in Portugal in the last 5 years. The benefits can vary between total exemption and the application of a single 20% rate on income.
Startup Visa
This program was implemented in early 2018 and grants a residence visa to foreign entrepreneurs who want to found or install a startup in Portugal.
Low housing prices when compared to Europe
Despite the ongoing increase in housing prices, the values practiced in Lisbon remain below main european capitals.
Low interest rates on mortgage loans
Banks have been granting mortgage loans with increasingly low interest rates, luring the buyer to the purchase rather than the lease, where rents continue to increase.
