Foreign investment in Portugal: Porto and Northern Portugal are the most attractive areas

Over the last decade, Porto and the Northern region of Portugal have attracted diverse and high-value investment, ultimately attracting talent, concludes a study by Predibisa.

Predibisa
Predibisa
22 December 2020, Redaction

Portuguese real estate is proving increasingly attractive for foreign investors, who have their sights set on several areas of the country. Porto and the Northern region of Portugal, however, are the most attractive areas for foreign investors in 2020 and 2021, compared to the centre and the south of the country, where interest remains focused in the area of expat buyers rather than big money investors. This is one of the conclusions of a study prepared by Predibisa.

According to the real estate consultancy firm, in the last decade, Porto and the Northern region have "managed to attract diversified and high value investment, eventually attracting talent" and that "this investment is notorious in traditional sectors with innovation components, which differentiate Porto from other cities, with real estate demand leveraged on four indicators: macroeconomics, talent and skills (know-how), good infrastructure and quality of life", the company said in a statement

According to the study, Porto has lower property prices, having registered variations in terms of values, numbers of operations, foreign investment and job creation in recent years with figures "well above the national average and particularly those registered in Lisbon". 

"In a comparison of the cities of Porto and Lisbon, the reference value per square metre (m2) of new constructions is 3,500 euros in Porto, and in Lisbon it is fixed at 5,800 euros. The average gross yield is 5.9% in Porto and 4.6% in Lisbon. As for jobs generated by foreign investment projects, in Porto the average is 115 jobs and 47 in the capital", reads the document.

A more stable and resilient residential segment in Portugal

The data from the study also allow us to conclude that, when analysing the evolution of yield in the Portuguese real estate market over the last decade, there is stability and resilience of the residential sector compared to other sectors.

However, with the coronavirus crisis sweeping the world, the prospects outlined for 2020 in Portugal, predicting "high growth rates", were not confirmed. Therefore, the study concludes that "current estimates point to a year below forecasts, with a slowdown in housing sales" but that "experts in the sector predict that the consequences of the pandemic in the housng market in Portugal will be overtaken by the pace and trend of growth recorded in recent years," the paper reads.

For João Nuno Magalhães, general director of Predibisa, in recent years Porto has become "a point of attraction for international investment". It is "a region increasingly known as a destination for the establishment of companies with added value services, since its arguments are very strong for this type of occupant", he says, quoted in a press release.

"In addition to the competitive costs of real estate, there is also a highly qualified workforce, a very strong academic and Research & Development (R&D) ecosystem, a Mediterranean climate and an affordable cost of living, all in a country that is considered to be one of the safest in the world. It has been perceptible in the last decade that this reality of the Greater Porto region is much more appealing to most companies than in other competing European destinations", he adds.

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