Nº 1 Partners in Business Magazine

| 1

• A Return to Growth • Going global • Turning the page

• The ‘S’ word • Optimistic on Investment • Internationally Successful

Issue Nº 1 :: March 2012

G l o b a l i s a t i o n

| 3 2 | Globalisation

MANAGING DIRECTOR | Luis Figueiredo Trindade • [email protected]

COMMERCIAL DIRECTOR | Emi da Silva • [email protected]

EDITOR | Chris Graeme • [email protected]

ART & VISUAL DESIGN | André Freire • [email protected]

David Martins • [email protected]

JOURNALIST | Sandy Guedes de Queiroz • [email protected]

SPECIAL CONTRIBUTOR | David Sampson • [email protected]

OPINIONS | Miguel Marques dos Santos • Valter Alcoforado Barreira • Victoria Fernandes

PHOTOGRAPHY | Chris Graeme • Jorge Correia

PRINTER | Projecção – Arte Gráfica, S.A – www.projeccao.pt – nº DL: 341143/12

DISTRIBUTION | 3,000 are distributed by hand to leading business people in the Greater Lisbon area, 1,500 copies are distributed by post internationally and 500 copes at the national and international trade fairs, events of the Chambers of Commerce.

• Globalisation | Issue Nº. 1 – March 2012

Published bi-monthly and owned by Bravespiral – Comunicação, Unip. Lda. LX Factory | Rua Rodrigues Faria, nº. 103, Ed. I 4.02.01 | 1300-501 Lisboa

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04 • Message from the director

06 • Special Feature: A Return to Growth: Positive Signs or Misplaced Optimism

10 • Going global: AICEP and economic diplomacy

16 • Partners News

22 • Getting back to normal: Eurohypo confident investment will return 27 • CBRE: Sustainability and reforming the rental market

28 • The sea that disappeared: New Roca Lisboa exhibition

31 • CUSHMAN&WAKEFIELD: Opportunities attract a new breed of investor 35 • SUA KAY Architects: Buildings that stand the test of time

41 • JONES LANG LASALLE: Picking up a bargain in a buyer’s market 42 • Opinion: Reforming the urban rental law

45 • BUREAU VERITAS: Keeping standards up at home and abroad

54 • Special Interview: The American Club’s Anne Taylor: looking to the next generation

59 • MIPIM 2012: Investment issues and innovation

INDEX

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he truth is that the troika’s austerity measures have reduced internal consumption indices to a minimum and provoked economic stagna-tion. In this sense, the internationalisation of the Portuguese economy represents a strategic vector in national economic policy. However, lack of success should never be the main reason behind internation-alisation. The solid position in the national market and Portugal’s

proven experience and know-how should be the sine quo non conditions and reasons for Portugal’s companies to look overseas. Innovation and a pioneering spirit allied to a good financial capacity and sound management are key factors. The most successful companies penetrate international markets with solid, quality business proposals, linked to innovative products and services, creating new markets and market niches. One of the most solid internationalisation strategies is via international partnerships and strategic alliances with multinationals operating in Portugal.

The expansion of Portuguese companies has widened in the international market. Financial groups and food distribution companies have expanded to Eastern Europe; banks, telecoms and energy companies have undertaken large-scale investments in Latin America; competitive firms in the footwear, software, moulds, and technology sectors have won significant market shares in the USA and EU. In Africa, successful construc-tion and real estate firms deserve to be highlighted. International expansion is a process that demands a sustained strategy, for the ramifications in terms of financial and human resources are huge.

Knowing how to marry local aims with the aspirations of consumers in international markets is one of the great challenges facing companies. In many cases, companies are forced to readjust their products and services which have been accepted nationally to the particularities of international markets, which for investors with an individual profile can prove hard, but sharing costs and forming partnerships is vital. The trend to integrate internationalisation and innovation in a policy of common competitiveness is increasingly evident. It is within this context that networks (support, cooperation and know-how) are increasingly relevant – they help to increase the efficiency and effective-ness of companies.

Finally, I would like to extend a heartfelt congratulations to an exceptional team that has joined us in a new direction for this new magazine project which aims to follow, support and promote Portuguese companies overseas, that are pursuing the ethical principles, professionalism and strategic vision in the same way that the pages of each new issue will be filled with knowledge and expertise.

Here’s to Internationalisation!

The most direct and, at the same time,

most positive consequence from

the difficult times our country is going

through has been the strengthening of

internationalisation strategies by

national companies.

LUIS FIGUEIREDO TRINDADE | Director, PARTNERS IN BUSINESS

[ E DI TOR IA L ]


This has entailed austerity measures and some economic contraction. But because more than 70% of the adjustment comes from spending cuts and the rest from the revenue side Carlos considers that “the potential disincentives for economic activity are reduced”. Meanwhile the government is doing a good job in retrenching the size of the state. Total state expenditure was 48.4% of GDP in 2010 and will be brought down to 42% in 2012. Also the privatiza-tion program has started well. In the first transaction, the sale of a further tranche of the power company EDP, the government obtained a 53% premium on the share price, and the total revenue was €2.7 billion, which represented more than half of expected revenue for the whole privatization program.

The structural reforms he lists are a new competition law, acceleration of the trans-position of the EU services directive, “which will reduce long-standing barriers to an open economy, and a new insolvency code focused on restructuring viable companies and bringing insolvent ones to a rapid end”.

In the public sector the government is restructuring its state-owned enterprises and eliminating redundant services and manage-ment positions. It has merged the different agencies in charge of tax collection to save resources and improve tax collection. It has got an agreement with the trade unions on some labor-market reform: indemnities for dismissal will be brought down and the process itself will be simplified. There will be a reduction in vacation days and holidays to help generate more competitive unit-labor costs. He claims that this agreement represents “an important milestone for our country”.

“The most salient aspect of the current difficulties is the resilience and resolve dem-onstrated daily by the Portuguese people. We are fortunate to have strong social and political consensus around the imperative of fiscal discipline and the need for change. This is why the program is working. This is why Portugal is already restoring its com-petitiveness despite all headwinds. This is why growth will return.”

Can we believe him?I want so much to believe a politician when he is positive about the improvements the government is making to the country and its economy, and this applies even more so when I know and like and trust him. I first met Carlos Moedas before he returned from his banking job in London to take on the management of Aguirre Newman in Portu-gal. He comes over as not only bright and intelligent but also as friendly and open. He has been an excellent choice to represent the government in its dealings with the Troika. Portugal has a good history of success in negotiations because its representatives are such nice people that you don’t want to say “No” to them.

So when Carlos writes that there is light at the end of the tunnel I want to agree with him, and I want to believe that the govern-ment’s reforms will make a difference. But in truth I don’t. Of course I recognise that the government is trying hard. I agree with the cancellation of some feriados and a reduction in the weight of the state sector in the economy. I want to believe that the state budget is under control and I can even accept that the country’s macro economic position is improving but will it be different this time round? Will Portugal work better in the future?

Most of the discussion about the economy in the press or the divergent opinions of famous economists about whether to in-crease borrowings do not help to answer this question. In practice it will make little or no difference whether Portugal has to have a second bail out package. This depends on circumstances outside the government’s con-trol, as does the country’s prospective return to capital markets in 2013.

The reality of doing business in Portugal Portugal has always been a wonderful place to live, to visit, to relax. Come and enjoy the country, the people, the beaches, the food. But working or doing business can be tough. Why? The devil is in the detail. It’s like an architect’s drawing of an unbroken straight wall. It looks beautiful on the drawing but when you see a building streaked by cracks and bubbling from water penetration you understand that the reality is different.

I want to see more evidence of a change in attitude, of a recognition that the customer comes first, or awareness that investment will only come when business is allowed to function economically. Too often attempts to start a new venture or just to go to work are frustrated by bureaucracy or restric-tions that make no sense. The last govern-ment made wide use of a PIN system to fast track large new projects but that fast track attitude needs to be repeated throughout the economy. There are still too many privileged party members on the boards of the state monopolies, and their lack of competence goes unchallenged as do their excessive costs and charges.

The government cannot change the situation overnight but it needs to target professional management in its own sector, it must do more to encourage investment and to target investment which will lead to more jobs. Successive governments have spoken about urban rehabilitation and a law to reform the rental law is going through Parliament but more incentives are required for small builders to enter this field.

CARLOS MOEDAS |

Secretary of State to the Prime Minister

For Carlos Moedas the crisis is an op-portunity for decisive action in addressing fiscal problems and eliminating barriers to growth. What matters are reforms that boost competitiveness. The good news for him is in the numbers. Portugal’s deficit in the cur-rent account was 8.9% of GDP in 2010 but for the first time in decades it is expected to be positive in 2013. This is being helped by the strong performance of exports, which grew by 7.3% in 2011. This growth is in his opinion a testament “to the strong adapt-ability of Portuguese companies, which, facing weaker demand in European markets, are tapping the strong potential of emerging markets with linguistic ties to Portugal, such as Brazil and Angola”. The structural deficit fell to 6.9% in 2011 from the 2010 high of 11.4% of GDP, and this year the primary balance (excluding interest payments) is expected to be a surplus of 0.3% of GDP.

David Sampson Reports

In his January article in the Wall Street Journal Carlos Moedas, the under Secretary of State responsible for coordinating the programme agreed between the government and the Troika, explained that the financial crisis has forced Portugal to confront longstanding imbalances in its economy. He listed what the government has done and is doing, and claimed that growth will return.

Why

Growth W

ill Retu

rn

sReport


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LOOKING FOR THE RIGHT RETURN?

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building a second (and quite unnecessary) motorway from Lisbon to Porto and a third bridge (to the North of Lisbon) over the River Tagus. Now it is still not clear how much of the cost of these contracts is al-lowed for in government deficit forecasts.

Managers have to cease to be satisfied with lame excuses about work not done well. They have to provide a good service and people need to be able to work without hav-ing to pay unfair rates of tax. One example I come across as a publisher is the treatment of those on green receipts: I want to use the services of one of the country’s many unemployed journalists and photographers but when I call he tells me that he can now only work off the books. He wants to work but he cannot give me an official (green) receipt, and this is not because he wants to avoid making his social security contribu-tions. Under new regulations as long as he is registered as a free lance journalist the social security system assumes that he and his (non-existent) employer are evading making social security contributions and demands that he pay per month the contributions which he and his employer would have to

Too much private debtNo steps have been taken to deal with the fundamental problem overhanging the economy: the excessive amount of debt in the private sector. In the real estate field, despite frequent protestations that Portugal has avoided a real estate bubble, properties held by the banks in their real estate invest-ment funds or by them as collateral for loans are grossly overvalued. If property values are allowed to fall, companies will go bankrupt, the banks will need more capital to cover their bad debts and the state will have to step in.

To help avoid such an outcome here and in Spain the ECB has been providing the banks with unlimited short term funds but it does not help deal with the problem in the longer term. No one wants to invest in Portugal at unsustainably high prices and it will take years for property values to catch up with the loans secured on them. In the mean-time the banks will not sell and they cannot refinance new purchasers, which leaves the markets paralysed and properties going to ruin.

Changing attitudesPerhaps the major lesson of this crisis for Portugal so far has been that there is no such thing as a free lunch and that at some points debts have to be repaid. I would be more happy that Portugal has learnt this lesson if I saw much greater transparency in the analysis of current and any possible future public private financing initiatives. It shocks me that although I followed news about Portugal closely over the years I never realised that successive governments were

David Marsh, the author of the History of the Euro, believes that the real villains of the story are not the governments or people of Greece or Portugal but the technocrats in Brussels who failed to take advantage of the early success of the Euro and the chance then to issue Euro-bonds backed by all the EU governments.

“The roots of its travails now, or at least some of them, lie outside Europe: the buildup of massive, footloose investment capital by fast-growing developing nations like China; tight-ened conditions for international borrowing and lending after the U.S. home loans crash in 2007 and the downfall of New York investment bank Lehman Brothers in 2008; and then, in 2009, the worst world recession since the 1930s. But the central reasons for the dash-ing of European dreams have been relentlessly homemade. They lie in the European Monetary Union inherent encouragement, through the “one-size-fits-all” interest rate policy, of vulner-able member states to live beyond their means, and in the extraordinary failure of Europe’s governments and financial authorities to heed the warning signs and take corrective action until it was far too late.

The Euro’s advantages were meant to be self-fulfilling; success would feed on itself. Yet as a result of the defects revealed in 2009-2010, Eu-ropean countries have had to embark, within a period of just two years, on a massive program

pay if he was employed and working for the minimum wage. And this is so whether he earns anything in that month or not. He cannot afford such payments and the only way out is to deregister. So if he does get work he has to ask to be paid off the books.

The legal system is also not effective. The laws are in place but they don’t always fit. The Mayor who took bribes and the TV star and others who abused young boys have been convicted but are still not yet serving prison sentences.

Lastly no one has confidence that the poli-cies of the current government will be main-tained by the next one. The main sharehold-ers of Jeronimo Martins, the company which owns the Pingo Doce supermarket chain, were criticised recently for moving their shareholdings into a Dutch vehicle. They replied that they were not trying to avoid tax. They were merely tired of the continual changes in Portuguese law and regulations.

So Carlos, keep on trying. I so hope that you are successful and that life for all of us improves.

The €uro: What went wrong?

of financial overhaul for which they were al-most completely unprepared and which dwarfs, in real terms, the sums of money mobilized to repair Europe after the end of the first and second world wars. The single currency bloc stands revealed as a zone of semipermanent economic divergence, corrosive political polari-sation, and built-in financial imbalances, beset by a perpetual penumbra of hope and pain.

The bitter truth is that very few of the strategic motivations for the formation of the single currency have been fulfilled. The progenitors of the Maastricht Treaty - led by France and Italy, as well as smaller countries such as Belgium and the Netherlands, but including, too, most of Germany’s leading politicians -- foresaw a variety of benefits. The four main arguments for the Euro were to promote European growth and prosperity by eliminating exchange risks and boosting trade; to complete France and Germany’s postwar political rapprochement by establishing a path toward political union; to create a rival and complementary force to the dollar; and to constrain the perceived domi-nance of newly reunited Germany. Needless to say, none of these predictions have borne out; Germany, for instance, is more dominant in Europe than ever. Never before had the creation of a new monetary device been so replete with anticipation and hype; it was al-most inevitable that, under the weight of these expectations, the Euro would buckle.”

Report


Pedro Reis has certainly got his work cut out for him fronting a government agency which arguably has now almost assumed the status of a ministry.

In an increasingly globalised world, where competitiveness and productivity are vital, and against the backdrop of the worst eco-nomic downturn in living memory, his job at the helm of AICEP (Portugal’s Foreign Commerce and Investment Agency) is perhaps the most challenging and important of them all.

Because unless Portugal’s companies suc-ceed in finding new markets abroad and shifting from the internal market and the comfort zone of the European Union, she will never catch up with her European part-ners, close her external balance of payment deficit, or generate the income and wealth to place the country on a firm economic footing.

And that’s where his agency comes in - helping companies, the vast majority Small and Medium-sized Enterprises (SMEs) network and make contacts commercially, diplomatically and politically overseas; act-ing as a facilitator in helping the country’s firms to export to new markets.

One step in this direction was placing the agency under the aegis of the Ministry of Foreign Affairs (MNE) to reflect the new direction of Portugal’s business-focused

diplomacy. “This decision was about moving from words to deeds, creating and realizing a coherent and solid strategy aimed at the globalisation of the Portuguese economy,” he explains.

Another was defining a set of priorities for the short and medium terms, which meant consolidating existing export markets while, at the same time, widening the net of coun-tries and markets for Portugal’s goods and services. That strategy is clearly beginning to work. In 2011, Portuguese trade outside the EU shot up by 26%. But it doesn’t stop there. It’s also vital for the country to attract Foreign Direct Investment and this can only be done by making Portugal an attractive relocation market for foreign companies by structurally reforming its judicial, labour, tax and bureaucracy systems. Here too Por-tugal is making strident efforts.

Pedro Reis admits that all markets are important for Portuguese companies and AICEP needs to be working on the ground alongside them wherever they are in the world. But now the focus has to be on exporting goods and services outside the European Community to other countries that already account for 27.6% of total ex-ports. Exports to non-community countries grew by 1.1% in 2011 compared to 2010, the largest yearly increase since 1996.

Looking worldwide, Portugal’s exports of goods and services grew 13.3% last year in relation to 2010 and for the first time overtook the €60 billion, benchmark, turn-ing over €61,727 billion, or €7.260 billion more than in 2010. This increase by 13.3% in the total value of exports contributed towards slashing the trade deficit (bal-ance of payments deficit) by €6.036 billion. “The positive performance in our exports of goods and services is a clear sign to the international community that the Portu-guese economy has the capacity to positively trade in foreign markets and is succeeding in confronting the current economic crisis,” he says.As to specific markets, Central and South

America represented the destination for 3.5% of trade sales in 2011, compared to 1.8% in 2007, with an average annual growth of 20.7% since then. “Peru and Co-lumbia are countries which have interesting growth rates for us, with political stability and markets that are suited to the kinds of goods and services that Portugal can offer,” says Pedro Reis, adding that Venezuela and Chile are also attractive markets, not to mention Brazil which he highlights as a “priority” market in which Portugal has the “greatest interest”.

In Africa, which represented 10.3% of Por-tuguese exports in 2011, and which enjoyed an average annual growth rate of 17.2% in the period 2007-2011 and 22.5% in 2011 compared with 2010, there are, he says, “two realities”: North Africa (Tunisia, Morocco and Algeria) with which Portugal has excel-lent relationships and will be the focus of renewed interest because of the possibilities opened up by the Arab Spring; and Sub-Sa-haran Africa with Angola and Mozambique clearly in the limelight. “The latter two are a priority for us because they share the Portuguese language and a common history spanning centuries,” explains Pedro Reis, adding that the countries where Portuguese is spoken (PALOPS) absorb around 66.9% of Portugal’s total exports to Africa. “All countries with a Portuguese background - linguistically, historically and culturally - are natural markets for us, and ones with which we want to deepen our economic and com-mercial relationships,” he adds.

However the Gulf region also has a strategic dimension for Portugal which needs to be nurtured, particularly with regards to attracting investment. “This is a key role for AICEP because foreign investment can bring value to the Portuguese economy, generate wealth and also employment”.

Asia, particularly China, too is a strate-gic market for Portugal with interesting potential from neighbouring countries. Last year, for example, exports to China grew by 67.9% while those to Japan, by 50%.

Returning to ExportsPedro Reis is the new man behind AICEP, the government agency responsible for facilitating Portuguese companies in global markets. Seeking new markets outside Portugal’s traditional EU comfort zone is a priority.

Interview | Chris Graeme

”PEDRO REIS | President, AICEP

”Looking worldwide, Portugal’s exports of goods and services grew 13.3% last year in relation to 2010 and for the first time overtook the €60 billion benchmark, turning over €61,727 billion

Business Interview


do Guedes, adding that the company has also captured new management and marketing contracts for third parties in Spain, Germany, Italy, and Romania. It also pursued a capital recycling strategy by floating Sonae Sierra Brazil on the stock market and by selling the El Rosal and Plaza Éboli shopping centres in Spain which Sonae Sierra still manages.

“The general consensus is that 2012 is going to be a difficult year in Europe and economic conditions will inevitably affect our opera-tional performance in Europe, especially in Portugal and Greece, and to a lesser extent in Italy and Spain. However, we’re confident that we will continue to show positive results since we operate in different geographical markets”, adds Fernando Guedes pointing to two shopping centre launches in Brazil this year: Uberlândia Shopping and Boule-vard Londrina Shopping while continuing to improve operational efficiency in mature markets and seeking new investment oppor-tunities, with a focus on Germany and Italy, with the opening of Le Terrazze shopping centre in March.

In Portugal real estate consultants too are weathering the downturn in property invest-ments and new projects at home by beefing up the services they offer to third parties. Not surprising when last year the markets suffered a historically low number of transac-tions. Office take-up, for example, was little more than 80,000m² (it was 105,000m² in 2010) while investment plummeted from €730 million in 2010 to €250 million in 2011 according to Cushman & Wakefield. The average level of rents, too (after dis-counting reductions and other concessions) fell substantially and yields demanded by investors rose, all contributing towards important losses in value. “Obviously our commercial departments have felt the pinch

in the market, although in the retail area we still managed to achieve a large number of transactions,” says C&W senior partner Eric van Leuven, who points to a “motoring year” in non-transactional services (property man-agement, evaluations and building project management) which enjoyed an excellent year in which the company’s market share and turnover increased so that, overall, its business turnover didn’t go down as much as had been expected. “We don’t think that the market will change much in 2012, because the main issues - financing constrictions, lack of consumer and company confidence – will remain, affecting market activity,” says Eric van Leuven who, nonetheless, expects a greater number of transactions from the banking sector and other businesses pressured into selling, while in the occupancy area, shop, office and ware-house users can take advantage of excellent commercial conditions in the market.

PEDRO SEABRA | President, CBRE

PAULO SILVA |

Managing Partner, AGUIRRE NEWMAN

“This year will be a very difficult one for the country, however, we believe the year may not be very negative for our business, since money hasn’t dried up completely,” says Pedro Sebra, President of CBRE. Real estate continues to be a refuge investment, he says, with a point of balance between the sale and purchase price getting closer. “At the moment, we’re closer to making transactions and I am convinced that in 2012 there will be more real estate transactions than in 2011. The buyers will not be the same, and the business turnover will be a lot less than we were used to seeing before the crisis,” he ex-plains, adding that events at an international level beyond Portugal’s control will influence what will happen in Portugal in a way that will be difficult to predict.

“At the moment there are some improve-ments, with a new type of investor in Portugal. The traditional investors of the past

Turning Point

or Tragedy

Record unemployment running at 14%, a paralysed banking sector suffering €1.5 bil-lion losses over Greek debt exposure, a con-struction industry at a standstill, screaming private, public and state indebtedness, and a record number of bankruptcies among Small and Medium Enterprises.

The landscape couldn’t have been bleaker, and paved the way for Portugal’s grudged admittance that it needed external help to put its house in order. That help came in the shape of a €75 billion bailout from the International Monetary Fund, the European Union’s European Financial Stability Facility, and the European Central Bank – together nicknamed the ‘troika’.

The economic downturn hit the Portuguese real estate market, the commercial and retail sectors, and even some sectors of tourism hard, pushing down property values and rents and driving away foreign direct invest-ment which fell to historic lows.

Yet despite a agonisingly difficult year and the anticipation that 2012 will hardly be a rose garden, most business leaders believe that Portugal is about to turn the page. It is dealing with its financial problems and facing its structural inadequacies head on, while companies in all sectors are cutting wastage and inefficiency and creating leaner, more competitive, efficient and productive organ-isations, better able to compete in a truly global economy.

Of course while Portugal is largely respon-sible for her own maladies, a lot of the factors determining the degree of success in the treatment lie outside, in the economies of Europe, the United States and the rest of the world.

Large Portuguese companies with an inter-national presence in the retail property and management services sectors have weathered the storm best, partly because of their exper-tise and ability to diversify within their areas,

and because they’ve focused on growth po-tential markets abroad. Take shopping centre specialists Sonae Sierra, for example. Despite the difficult European and United States economic situation, it actually enjoyed a positive year in 2011 and increased its liquid results in the first nine months of the year, from €14.9 million in 2010 to €27 million last year. “Measures which we implemented to improve our operational efficiency and create alternative sources of income contributed to these results,” explains Sonae Sierra CEO, Fernando Guedes, who points to alternative income generating measures like reinforc-ing services offered to third parties as well as improving operational efficiency.

Sonae Sierra’s main strategy stands are inter-nationalisation, capital recycling, and service provision to third parties. “We began service provision in two new markets, Morocco and Croatia as well as retail mall construction projects in Germany (Solingen) and in Brazil (Passeio das Águas Shopping),” says Fernan-

In 2011 Portuguese business suffered one of the worst economic years since the 1920s. Despite the downturn, however, there are op-portunities in the mar-ket, some modest signs of recovery and the rise of a new breed of investor.

Feature | Chris Graeme

2012

FERNANDO GUEDES DE OLIVEIRA |

CEO, SONAE SIERRA

ERIC VAN LEUVEN |

Managing Partner, CUSHMAN & WAKEFIELD

Business Feature


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will be a challenging year and doesn’t expect there will be significant improvements. “We’re going to have to be increasingly inventive in order to find different and more effective solutions for our clients in terms of office occupation, but then again our ability to do this is one of the reasons we’ve grown in the market.” Despite the difficult economic situation, Jorge Bota says this can create opportunities too which has been its main source of activity in the office market as pres-sure on companies to cut costs encourages them to find smaller and more economic spaces. All told, despite the difficult climate, Jorge Bota believes that it will be possible to get some growth and maintain that sense of positivity which B.Prime and its team has always been associated with.

According to Pedro Rutowski, CEO of Worx real estate consultants, 2012 will be similar to 2011 and not a recovery year but one of con-solidation. “The levels of activity will be fairly modest and the lack of new buildings coming onto the market will contribute towards unstable demand,” he says, adding that the company will offer consultancy and support services to third parties as well as setting up

such as German open funds have completely withdrawn from our market, but there is some activity from new sectors such as na-tional and international private investors who can take advantage of the opportunities that present themselves at the moment, because the truth is prices have dropped. So that’s the reality of the market at the moment; it’s small and it’s moving slowly, but it is moving,” adds Pedro Seabra.

Real estate consultancy Aguirre Newman enjoyed an increase in its turnover levels and results that countered an overall fall in activity indicators which affected the real estate market across the board. Transac-tional areas (investment and agency) did not manage to buck the downward trend seen in their respective markets, despite suffering, by some degrees, less of a slump in business than experienced in its markets. “We’re not expecting a change in the downward trend in activity in the segments that make up the real estate market. We hope that the low prices being applied will attract clients looking for premises and enable the expected reduction in activity resulting from the fall in GDP, which will be more than 3%, to be coun-tered,” says Paulo Silva, managing director.

Jorge Bota, managing partner of real estate consultants B Prime, also agrees that 2012

JORGE BOTA | Managing Partner, B PRIME

PEDRO RUTKOWSKI | CEO, WORX

JOSÉ FORTUNATO | CEO, MSF

consortiums and partnerships for investment operations. “The consultancy area is one that Worx has specialised in and companies are increasingly seeking out our services in this respect, from small outfits to the banking sector, in managing and applying their assets and redefining their strategies.”

The financial squeeze and lending restric-tions have impacted on the residential and tourism development sectors too in a year which was marked by great difficulties in selling property, lending restrictions to final clients and developers, higher financing costs for projects that did get the green light, the insolvency of low-quality projects and even good projects whose capital structure was not sufficiently solid. There were also reductions in prices by proprietors in order to make deals, an increase in demand for property to rent and scores of estate agents going out of business. But according to José Fortunato, chief executive of real estate developer MSF. TUR.IM, there were good opportunities to be found in 2011 which wasn’t such a bad year for the tourism sector.“Less demand in the second home segment from national and international markets and the difficulty for clients in getting credit has influenced the development of new projects and extended schedules”, he says, adding that the company remains positive about

Business Feature


tourism projects (hotels, marinas and golf) and continues to believe in high-quality residential tourism projects. “This year will be difficult, demanding great efforts from real estate developers, including recourse to their own capital,” he explains, adding that this year MSF.TUR.IM will continue to fo-cus on controlling costs while maintaining quality projects and service provision.

Another organisation investing in the refur-bishment and rehabilitation market is the real estate investment fund entity Fundbox. Joaquim Meireles, Fundbox board member, says that the difficult economic climate has demanded new ways of thinking and other, more adaptable business models, particular-ly in rehabilitation. These models, he says, should be based on long term partnerships with new and existing players in the market (clients, suppliers, investors, etc.) looking at quality and differentiation as well as finding ways around finance restrictions.

“It’s in periods of great difficulty that we discover our capacity to develop more creative and effective solutions, especially those focusing on rehabilitation and the urban rental market,” he says, pointing to the need to replicate real estate investment fund models in this area different cities and municipalities. Fundbox says it will

Business Feature

also concentrate on real estate operation structuring services with institutional inves-tors, including the acquisition of assets, the negotiation of finance conditions, and their eventual participation in the vehicles proposed.

But while urban rehabilitation and reno-vation provides good opportunities for investors within Portugal, where does that leave top architect ateliers known for their cutting-edge designs in retail, office and residential areas. One answer is, and for some time has been, expansion abroad. Take Broadway Malyan for example. It had a good year in 2011 largely because it had been busy in other countries with offices in São Paulo, Brazil, Istanbul, Turkey and Bombay, India, all emerging and expand-ing tiger economies. “Broadway Malyan has pursued internationalisation goals and has grown by successfully expanding its network of international offices in emerg-ing markets,” says Stuart Rough, chairman of Broadway Malyan who, with board direc-tor Margarida Caldeira, runs the Lisbon office and says the international company is looking to open up new offices in 2012. The company has clients in Asia and China, two booming markets. “We’re planning to increase our focus on projects in Africa, through projects in Angola and Mozam-

JOAQUIM MEIRELES |

Board Member, FUNDBOX

LURDES MARTINS |

Retail Director, NEINVER

STUART ROUGH |

Chairman, BROADWAY MALYAN

bique; as well as Russia from the Poland office, and increase our teams in India as well as widening our base in new sectors like education and health,” he says.

One segment in the retail sector that has done well in the downturn, largely because of its ability to offer premium brands at knockdown prices, is the outlet segment. Neinver, the second largest outlets operator in Europe, says it enjoyed a good year in 2011 both in Portugal and abroad, register-ing strong increases in visitor numbers and sales at all its centres. “Neinver’s strategy is to diversify and enter new markets as a strategic partners,” says Neinver com-mercial director Lurdes Martins who says that 8% of its assets are located in Portugal. “Thanks to our vast experience in different European markets, we intend to continue to consolidate our position of leadership by opening new centres in markets where we are already operating, like Portugal, as well as entering new and promising markets like France and Germany,” she says. With plans to develop 160,000m² of outlets over the next three years, Neinver hopes to expand its operations in Portugal following the success of its The Style Outlets brand and is also looking to penetrate other Portuguese-speaking markets like Brazil.


João Vasconcelos, Chief Happiness from Start Up Lisboa, aims to help new and innovative micro companies set up in the heart of Lisbon’s downtown and aim for international markets.

The president of bank Montepio, António Tomás Correia, the CEO of Portugal Telecom, Zeinal Bava, the Secretary of State for the Economy, António Almeida Henriques, and the Mayor of Lisbon Council, António Costa were present at the opening of a new business incubation project in Lisbon.

The project follows the successful blueprint for Y Combina-tor and Plug and Play (US) and Le Camping (France).

In addition to being an incubator providing office space at competitive prices, it also offers the new companies special and privileged access to consultants, accounts, legal services, public bodies, investors and financial backers.

Startup Lisboa is aimed at helping businesses with the potential to grow and export. The selection criteria for the incubator is competitive and strict but without making a distinction in business areas. The companies simply have to show they have an innovative approach, product or service, the potential to grow and export.

Located in Rua da Prata, the project has received various funds: €450,000 from Lisbon Council, which also gave it the building and paid for its refurbishment (€500,000), while IAPMEI, Montepio and Lisbon Council created a €500,000 fund to help the companies in the various phases of their ‘incubation’.

The contracts awarded to start-up companies are valid for six months and renewable for up to three years and the new companies have to find just a fraction of the rent, cleaning and utility bills.

A new company start-up premises opens in Lisbon to support innovation and internationalisation

Partners News

CBRE and C&W place Chinese bank in Office 123

CBRE and C&W are responsible for placing the Industrial & Commercial Bank of China (ICBC) in Lisbon’s city-centre Office 123 building, a property owned by the investment fund Commerz Real. In the transaction, CBRE found the build-ing for ICBC while C&W represented the building’s proprietor. “In recent years ICBC has extended its network through-out Europe and CBRE has performed an important role in this process of helping the bank to make suitable choices in each market. The ICBC, the bank which financed the purchase of the State’s share in the electric-ity company Energias de Portugal (EDP), will occupy the fourth floor of the Office 123 building which is located in Avenida Duque de Loulé Nº 123, by Marquês de Pombal, where EDP’s headquarters are located. The space is on a monthly rental contract for around 17 euros per m² in a building where each floor has a 490m² area. The ICBC will therefore be paying a rent estimated at around €8,300 per month.

Multi Mall Management, the Multi Corporation group company which manages around 50 shopping centres in Europe, has registered 2 billion visitors in Europe and 79 million in Portugal.

Present in Portugal since 1990, Multi Mall Management currently manages a portfolio of 13 shopping centres and an office park – Fo-rum Aveiro, Armazéns do Chiado, Forum Algarve, Parque Mondega, Almada Forum, Forum Montijo, Forum Madeira, Forum Viseu, Forum Coimbra, Espaço Guimarães, Braga Retail Centre, Forum Sintra, Retail Park Albufeira and Arquiparque II – in a portfolio that involves contracts with around 1,410 retailers and more than 369,000m² of GLA. The 79 million people that have now visited Multi Mall managed shopping centres in Portugal on an annual basis since 1990 have contributed towards Multi Mall Management’s success in visitor numbers at a European level.

Proposed changes in the Urban Rental Law and the government’s policy to fix VAT at 6% for property rentals have encouraged the refurbishment and renovation of the building at Rua Rosa Araújo, 49, in Lisbon. Apartments in the building, which is in the final phase of refurbishment, cost up to 2 million euros. Developer EASF, owned by José Manuel Salgado, is aiming to complete the renovation of 8 build-ings in its portfolio and will only later turn its attentions to other projects. The proposed changes to the Urban Rental Law, which are currently being discussed in Parliament, are awaiting approval.

Multi Mall Management Shopping Centres attract 79 million visitors in Portugal

New Rental Law and 6% VAT provide property renovation boost


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Personae Awards 2011

Calling on business to Make-A-Wish come true for sick children

The Make-a-Wish foundation works tire-lessly all year round to make simple wishes for sick children come true. In Portugal since 2007, it has volunteers working in Lisbon, Porto, Coimbra, Braga, Viseu, Faro and even the Azores.

“It’s surprising how modest many of these wishes are: a computer; a BMX bike; a trip to Benfica or Sporting stadium to meet a football hero; a visit to Disneyland, or even being a princess for a day,” says Make-A-Wish executive director, Mariana Tavares who, together with coordinator Inês Seco runs the Lisbon-based foundation. The wishes often don’t cost a lot, but the travel arrangements and logistics are often what increases the cost of the wish.

“Generally children, often enduring long, repeated and difficult stays in hospital, have one of four basic desires: I’d like to have; I’d like to visit; I’d like to meet; or I’d like to be,” adds Mariana Tavares who says that much of their funding and donation comes from the business community and companies who play a vital part in making dreams come true for children and their families.

There are three basic ways to help Make-A-Wish: by making a donation; organising a Make-A-Wish event; and becoming a Sponsor of Desires.

If you’d like to help make a sick child’s dreams come true, then visit www.makeawish.pt , send an e-mail to [email protected] or contact Mariana Tavares or Inês Seco on 213562082.

Marta Tavares da Silva, managing director of the Bairro Alto Hotel said she felt “proud” as it wasn’t “every day that a Portuguese hotel is considered the best in Europe.”

The International Hotel Awards 2011, a part of the In-ternational Property Awards, are recognised as a symbol of excellence in the global industry and aim to highlight the best professionals and projects worldwide in the hotel industry.

Since 2005, the Bairro Alto Hotel has received clients from all over the world both for business and leisure. Located in an 18th century building in what used to be the famous Grand Hotel de L’Europe, this hotel was the first five-star boutique hotel in Portugal and is considered one of the best hotels in Lisbon and is in the top 101 hotels in the world according to the magazine ‘Tatler’.

Partners News

This award was created to recognise the best practices from shop retailers which were best able to incorporate the health and Safety standards and procedures developed by Sonae Sierra, with the aim of protecting staff, service providers and visitors in all of the company’s shopping centres. The award also aims to encourage retailers to adopt the necessary measures with regards to accident anticipation and prevention, so as to make their shops safer places, improve the security at shopping centres and achieve a ‘zero accident’ rate which is the company’s main objective in this respect.

Sonae Sierra’s PERSONAE Awards are awarded in three categories. The winner of Category A in 2011 was RR Center at CascaiShopping, a hair and beauty product outlet. Category A units are those that have

more than 1,000m², and whose portfolio is less than 10 shops or franchises worldwide.

The Category B winner, (less than 1,000m²) was ladies fashion outlet Elena Miró at NorteShopping. The Category C prize went to the Continente hypermarket at Algarve-Shopping, and is awarded specifically for supermarkets and hypermarkets, going to just one retailer at an international level.

The choice of winners took into consid-eration the good practices implemented by shop retailers in 2011 with regards to accident prevention. In addition to fire pro-tection and warning systems such as alarms and emergency exits and signage, the staff and management training of shop retailers was also included in the evaluation as well as the number of registered.

Sonae Sierra distinguishes retailers for good Health and Safety practices Sonae Sierra, the international shopping centre specialist, recently handed out its PERSONAE Awards to retailers with the best Health and Safety practices.

Bairro Alto Hotel considered the Best Small Hotel in Europe

Lisbon’s Bairro Alto Hotel has picked up two awards for the Best Small Ho-tel in Europe and the Best Small Hotel in Portugal at the International Hotel Awards 2011 held at the Hotel Savoy in London.


Although the outlook for the Portuguese real estate market is fairly bleak for the next two to three years, there is the expectation that foreign investors will return to Portugal in the future. “Portugal will continue to experience a pronounced economic recession for the near future, a result of the troika’s programme to reduce the country’s public debt and put its finances on a sounder footing,” says Carlos Leiria Pinto, who has headed the Portugal branch since 1999, when the company was called Rheinhyp. Eurohypo was formed by merging three German commercial real estate lenders, and it is now a subsidiary of Commerzbank. “In a landscape coloured by economic contrac-tion and a very high level of uncertainty, decisions on investment are generally put on the back burner, particularly when it comes to developing new real estate prod-ucts,” he says. The fall-off in investment is, according to Carlos Leiria Pinto, due to a number of adverse factors. In addition to the economic recession there are the successive ratings agencies downgrades of Portugal’s sovereign debt to ‘junk’

status (non-investment grade country), all reasons for the reduction in investment levels and available credit on the part of financial institutions in general.

On the bright side Carlos Leiria Pinto believes that there are signs of the “begin-ning of a period of opportunity”. “Despite expectations that prices in all real estate segments will continue to fall throughout 2012, it’s beginning to be clear that there are excellent opportunities for invest-ment in the market,” he says. “It’s worth remembering that despite everything, well chosen, conceived and professionally-exe-cuted real estate projects will continue to be a safe option when compared to other types of investment,” Carlos Leiria Pinto adds, pointing out that in the short-term national investors will be more active, and only at a later date will international investors return to Portugal when levels of uncertainty have significantly diminished.

“National financial liquidity levels will start to get back to normal over the next two years, although this doesn’t mean that the banks will necessarily be available to finance the real estate sector as they had done in the golden years before the financial crisis prior to 2008,” adds Carlos Leiria Pinto. Instead the property development finance expert thinks that it’s time to “go back to basics”, in other words only good projects and investments, with adequate capital levels, pursued by credible investors and developers with the necessary know-how and a solid financial track record will be worthy of credit backing. “With respect to families and the residential housing sector, we’re going through a profound and long-lasting change in paradigm with the rental market once again gaining ascendancy to the detriment of owning one’s own prop-erty,” explains Carlos Leiria Pinto.

Carlos Leiria Pinto believes that one of Portugal’s priorities in kick-starting its economic growth should be boosting the construction and real estate sectors, and for that significant attention should be paid to urban rehabilitation, which is already taking place in many Portuguese cities. “For that to happen, it is vitally important that the rental law is reformed and brought in line with those rental laws in other European countries which work in a more efficient way,” says Carlos Leiria Pinto. Expectations are running high with regards to the proposed law that is cur-rently being debated in parliament and could come into force in the summer. “It contains the basis for a sweeping reform in this area and it remains to be seen what form the final version will take and how far the law will work well in practice without lots of cases having to go to court, a situation whereby the new reform would end up being useless,” he adds.

As to Eurohypo’s position in Portugal, Carlos Leiria Pinto points out that there is natural concern about the economic downturn in the country especially when 35% of credit was in the construction and real estate sector, but he stresses that Portugal has been the only country where Eurohypo hasn’t lost money. “That’s why we’ve survived and are still going strong when branches of the bank in other coun-tries have closed down,” he says.

One factor in the Portugal branch’s favour is that it has a strong local team which has been with the project from the start. “Whatever happens to the Portuguese property market over the next two of three years we’re confident that investment will eventually return, which is one of the rea-sons why Eurohypo has a solid and long-term commitment to Portugal and will continue to finance sound, well-thought out projects in the Portuguese economy.

Eurohypo continues to be Portugal’s biggest provider of long-term property finance. The market is difficult, but there are modest signs Portugal could be turning the page says branch director Carlos Leiria Pinto.


at the end of the tunnel

Beginning to see the light

CARLOS LEIRIA PINTO | Branch Director, EUROHYPO

Despite expectations that prices in all real estate segments will continue to fall throughout 2012, it’s beginning to be clear that there are excellent opportunities for investment in the market ”

”

Business Interview


THE UNITED ARAB EMIRATES EMBASSY

This landmark project was in a 19th century building which had been refurbished in the 1980s when it became the headquarters for a private bank. Originally built as a residence, this mansion in Praça do Principe Real, had been showing signs of being rundown while water leaks had damaged the south façade. With no serious structural problems, pro-found alterations were not needed either to the building or its accesses. It was possible to retain the original 19th century design and subsequent improvements approved by Lisbon Council. For its new purpose, the building required a new image, outside and in, using top-quality materi-als. The façade was restored and maintained while the interior floors and spaces were opened up and modernised. The restoration and improve-ment works used high-quality material coverings while the exterior was made more formal, in line with the official residence of a nation with a diplomatic presence.

PORTUGUESE INDUSTRIAL ASSOCIATION FOUNDATION

This challenging project involved restoring a mansion on the corner between Travessa da Guarda and Rua da Junqueira. On the one hand Somafre had to work on some of the more dilapidated parts of the building, reinforcing it in such a way that interfered as little as possible with its original features. The project’s main goal was to conserve this historic building while at the same time adapting it to its new use as a foundation. The main alteration on the outside involved creating two arcades within the inside court-yard, both designed for the public and vehicles. The building’s area was extended from the first floor to the second to the north and south. Despite the feeling that extensive alterations have been made, in reality changes have not affected the overall reading of the premises, since the quadrant-shaped façades continue to be emphasised, maintaining the symmetrical look. However the building’s recovery has increased the area of construction.

Business Promo

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Bringing a new lease of life to old buildings Ever since it was founded 23 years ago, Somafre has made rehabilitation and renovation one of its core strategies. The last two years have been a good example, the group’s turnover in these areas represented around 40% of its total sales, with landmark projects chosen for the Real Estate ‘Oscars’ the United Arab Emirates embassy and the headquar-ters of the Portuguese Industrial Association Foundation.

SOMAFRE GROUP

A New Lease of Life to Old Buildings

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The ‘S’ WordPedro Seabra, president of CBRE talks about sustainability in real estate

Interview | Sandy Guedes de Queiroz

How have you as a player in the real estate market felt that sustainability has impacted the sector?Sustainability is a big word and is of course a fundamental concept – fundamental for our future and the future of generations to come – but we use it in all sorts of ways to talk about a wide variety of subjects. In real estate, sustainability is usually associated with energy efficiency, but energy efficiency itself is also associated with innumerous factors that can range from sustainability in master planning and how where people live determines how they get around, to the economic and financial sustainability of projects and businesses. I say this to il-lustrate that sustainability is everywhere and can mean any numbers of things.

I have to ask where was the concern for sustainability in the last decade when people were promoting real estate projects based on excessive financing and a hope that sales would fully cover the financial flows and ensure projects reached completion. Then when a change in the economic scenario brought about a change in buyers’ desire and capacity to purchase, it revealed the gross lack of economic and financial sus-tainability of those projects and caused tur-moil in the entire market. So now we have a country riddled with half-finished projects that have been abandoned by companies that were unsustainable and many others that were forced to close.

As for energy efficiency and certification and whether that has affected the real estate market, I think it could exert more influ-ence but it is without doubt a growing concern. But again, here we have to be more specific because the importance of sustain-ability varies greatly from market to market.

Is there a demand by large national or multinational companies for sustainable office buildings or is this still a distant reality?There is definitely a growing demand among large multinational companies for buildings that are energy efficient and eco-friendly, and those investors are willing to pay the necessary price. CBRE is a carbon zero

company, and although yes, this is partly because in the long term energy efficient buildings mean a reduction in operational and maintenance costs, it is mostly due to a sense of social responsibility, and I believe this is the reality of most large multinational companies. This is undoubtedly a growing trend and many international investors do seek buildings with a high energy rating, and EU directives also play an increasingly important role in ensuring energy efficiency measures are implemented and maintained. However, I do think much more can be done to encourage greater involvement in this area, namely in terms of creating tax incentives for those who apply sustain-able measures. There’s been much talk of exemption of the IMT or IMI property taxes in these cases, but so far nothing has been done.

What about in other markets?In the residential market, although the cost of electricity is subsidised by the govern-ment, the recent increases in energy costs and the anticipation that these costs will continue to grow will most likely bring about a greater concern in energy efficiency if families believe it will make a difference in their pockets. I don’t think that up until now it has been a determining factor in real estate prices or the purchase decision, but I do think it is a growing concern that will gain importance over the next decade as en-ergy costs continue to rise. Energy efficiency is also gaining relevance in the hotel market, and it has been an extremely important factor in the retail market, namely shopping centres, for a number of years.

Do you think the revised Rental Law will bring about growth in investment in the rental market? This new law is an extremely important re-form, especially in terms of developing and improving urban rehabilitation, a topic that for the moment is still very incipient in Por-tugal but which I believe will become crucial over the next decade. At the moment it is highly unlikely that new building can take place due to the difficulties developers and contractors are facing in obtaining financ-

ing, so rehabilitation becomes not only a business alternative, but it is also a funda-mental element for a country that has such a strong tourism potential, and of course it is also crucial in terms of the sustainability of our urban centres.

I think this law is a very good start for stimulating institutional investment in resi-dential real estate, but it’s still not enough. One of the fundamental changes that must accompany the new rental law is in the ju-dicial system, and those changes have to be real and visible in order for investors to gain confidence in the market. This is crucial because, as pro-active and positive as the law may be, if landlords and tenants reach an impasse and matters have to be taken to the courts, then we fall back into the old scenario of issues taking years to be re-solved, and this makes the market look very backward and unattractive. But I reiterate, I feel very optimistic about this law because structural reform is crucial to progress, and it’s definitely a good launching pad. Will it improve the rental market? Of course it will, but I’m not sure it’s enough to create a niche for institutional investment, mainly because the rate of return in the residential market is quite low and therefore not enough to attract institutional investors. In order to increase the return in this market, several problems must be resolved. For example, the extremely onerous bureaucracy and high costs of project approval which increase building costs immensely. Another obstacle is our tax system, which is very punishing and needs a substantial overhaul in order to make investment in property more attrac-tive.

Basically, the most important change that this law will bring about is to reduce the power tenants have over a property that does not belong to them, and that has enabled them to take advantage of landlords for years. That shift in the landlord-tenant relationship alone should be enough to stimulate transactions and breathe new life into the residential market, which of course is positive, but ultimately the ideal for a developer or investor is to sell a property for a profit, eventually to an investor that will rent it out.

”

”

PEDRO SEABRA | President, CBRE

Much more can be done to encourage greater involvement in this area, namely in terms of creating tax incentives for those who apply sustainable measures

Business Interview


This was a different kind of project from her career in directing films with actors like Penelope Cruz and Ben Kingsley (Je t’aime – 2006) or Lili Taylor and Andrew McCarthy (Things I Never Told You – 1996). “I wanted to see how the locals lived and find out why this happened and how a whole way of life just disappeared,” she said, adding that she doesn’t get involved with just any private organizations unless she feels they really do care about a specific issue and have a proven track record to prove it.“We went twice, and although I had already been in several African countries and the former Yugoslavia during the conflicts, I had never seen anything that touched me quite like this,” she says. “With this initiative, which we’ve developed in partnership with the We Are Water founda-tion, Roca aims to draw public attention to one of the worst ecological disasters ever,” says Roca managing director Jorge Vieira. The exhibition, designed by Makoto Fukuda, which features haunting photography from Jordi Azategui, is open to groups of five to 20 persons with free guided tours from Mondays-Fridays hourly from 11am to 4pm until April 28th at the Roca Lisboa Gallery, Restauradores, Lisbon. For further informa-tion contact the reception or visit www.rocalisboagallery.com .

Filmmaker Isabel Coixet presents exhibition at the

Roca Lisboa GalleryThe international award-winning Catalan filmmaker Isabel Coixet opens the exhibition ‘Aral – The Lost Sea’ with her mov-ing documentary about the consequences of one of the world’s greatest ecological catastrophes

The Aral Sea, situated in Central Asia on the borders between Kazakhstan and Uzbekistan, used to be the fourth largest salt water lake in the world, but human intervention has almost made it vanish, reducing its volume of water by 80%.

A moving documentary created by the award-winning Catalan filmmaker, Isabel Coixet, ‘Aral – The Lost Sea’ (O Mar Perdido) tells the faithful and poignant story about one of the world’s greatest ecological disasters, created when the then Soviet Union decided to divert the rivers feeding into the lake in order to irrigate cotton fields. The sea largely dried up, destroying the once thriving fishing and tourism industries along its banks.

“I had been collecting magazines clippings about the disaster for years after I heard about this sea in Central Asia that was disappearing because it upset me,” says Isabel, who asked the question, “how can man allow an entire sea to just disappear?”

When Roca’s We Are Water foundation ap-proached the filmmaker - her recent works include Listening to the Judge (2010), about the Spanish judge Baltasar Garzón’s struggle against corruption and terrorism - asking her if she wanted to do a film, she suggested the Aral Sea and asked if she could go there.


> LEFT TO RIGHT >

• JORGE VIEIRA | Managing Director, ROCA PORTUGAL S.A. • CARLOS GARRIGA | Director, WE ARE WATER FOUNDATION • ISABEL COIXET | Filmmaker • SILKE BUSS | Managing Partner, BUSS COMUNICAÇÃO • JORDI AZATEGUI | Exhibition Project Photographer

Business Interview


It was a challenging 2011 for real estate consultants like Cushman & Wakefield. They made up for the downturn in property transactions with non-transactional services.

Cushman & Wakefield admits that 2011 was a difficult transactional year in all four areas of their business: office; retail; industrial and investment. “We had a really decent 2010, so 2011 was difficult after such as good year,” ad-mits Managing Partner Eric van Leuven, who believes that the investment and transactional market will begin to pick up this year.“The big property owners, particularly banks, are seeing that they need help, and that they must be more flexible in what they can expect from their portfolios. I see more realism in the market and an acceptance they need outside expertise which they didn’t when the market was buoyant,” he says, adding that the advantage of selling bank assets is that banks are generally willing to stump up finance.On the real estate buying side, Cushman & Wakefield is no longer seeing the traditional investors such as the big German funds and some of the major British, Dutch and Spanish property companies, but a new breed of more adventurous and opportunistic investors, as well as family offices from Holland, Spain and Portugal.

Families like the Ortega and Champalimaud. “We’re seeing investments in prime high street real estate, particularly in Central Europe, and I’m trying to convince these investors that if they like that sort of product, then they can find it better and cheaper here in Portugal,” says Eric van Leuven.

RETAIL Eric van Leuven believes that high street interest will continue now that the shopping centre sector is mature. “I have always been a great promoter of high streets, although for 20 years we thought there was more money to be made in shopping centres. You only have to look at the great weather we have in Portugal to understand that the whole environment of high street shopping is much more pleasant,” he adds.

The problem is finding the right sized site in prime locations. “If you look at Rua Augusta, which used to be the prime shopping street in Portugal, the shops and the buildings are too small and that’s a problem for many retailers. What we’re seeing is a shift, with prime retail coming to Avenida da Liberdade and Chiado and moving away from the Baixa where you just can’t find the right size and configuration,”

Optimistic on Investment

says Eric van Leuven who points out that the maximum floor plates in the Baixa are only between 65m² and 85m², whereas in Liberdade they range from 200m² and 300² to 400m².

Business in the high street is really motor-ing, partly thanks to tourism, and will do so even more with the new Easy Jet hub, all of which is “very positive,” he says. An obstacle to street retail is still Portugal’s outdated rental laws which are currently being debated. “It’s morally incorrect to expect landlords to sub-sidise tenants. Any changes are welcome, and obviously the reform of the rental law is very positive,” agrees Eric van Leuven.

OFFICESFor Cushman & Wakefield the office market is tough, with shockingly low net rents and headline rents coming down. “All owners want to keep their headline rents because that’s how a building is valued, but if you look at the short-term benefits that landlords are willing to give in rent-free periods and fit-out contributions, the net effect is low rents,” admits Eric van Leuven, explaining that some areas with higher vacancy rates, like Parque das Nações, are suffering more than prime areas with low vacancy rates like Liberdade.“It’s not easy to see where new demand will come from. I think a couple of years ago we were expecting some large government bod-ies and utility companies to relocate. There had been a very ambitious programme for a Portugal Telecom city, while EDP will be relocating, but they are building their own premises” he points out.

The big issue for Eric van Leuven is the tax situation. It’s VAT on commercial property and the rules surrounding that are problem-atic, according to Eric van Leuven. The rule of thumb is there is no VAT on real estate. That means that the developer builds the building and carries the cost of the VAT on construc-tion, on fees for architects and agents. A developer can elect to not be exempt for VAT, which means that at the end of the develop-ment process he gets the VAT back that he’s paid to the contractors and service provid-ers provided that the future tenants of the building are VAT liable. A simple principle. But because some operators found loopholes to get a VAT refund while not collecting VAT from tenants the previous government

established new penalising rules. One is that if a property is empty for more than two years, i.e. the developer or owner hasn’t been paying anything to the Government because there’s nothing to charge VAT on; he has to refund the VAT which he received or offset. “That’s a major issue...particularly with big German investors investing in office parks where there is a lot of vacancy. Having to return one or €2 million in VAT isn’t funny,” he points out.

Another rule is that you can’t sub lease be-cause the owner looses the right to claim back VAT, so it’s very inflexible. The tough rules stem from abuses, but they are unreasonable. “Investors that have invested in Portugal and have been subjected to these rules will never ever come back and will tell their friends not to ever come here! It sends out a message that Portugal’s tax authorities are complicated and unreasonable. It’s not a fair ruling,” he says.

INDUSTRIAL AND LOGISTICS While the market in 2011 was fairly slug-gish, Cushman & Wakefield sees a positive development in the potential of the port of Sines. The enlargement of the Panama Canal will mean that Sines will become the first point of entry into Europe from Asia and the government’s commitment to the high-speed rail link for freight means that goods can be moved quickly to any point in Europe. “Portugal, although admittedly not in the centre of Europe could enter another league and become like the Rotterdam of southern Europe,” says Eric van Leuven who says that overall the logistics market is likely to focus on consolidation, modernisation and upgrad-ing rather than expansion.

NON-TRANSACTIONAL SERVICES One area the company did well was in the non-transactional and services sector which Eric van Leuven says was a “real success story”.

“We’ve increased billings, profitability and mandates as our clients are moving towards quality in whom they employ. This is a good period for big names in terms of real estate services and we’ve certainly had our fair share on the property management side of the busi-ness which is really flying,” he concludes.


ERIC VAN LEUVEN | Managing Partner, CUSHMAN & WAKEFIELD

It’s a whole different range of people now, a lot of private equity and family offices which are buying income-generating real estate. ”

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Business Interview


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> LEFT TO RIGHT >

1. MATTHIAS VAN ALPEN | Valuations and Corporate Finance Services Specialist, VAN ALPHEN ADVISORY • ALEXANDER GRIEKSPOOR |

CEO, MEKENTOSJ.COM • WALTER J.A. VONK | Programme Manager, CONVERGYS • JODIE LAZELL | Lawyer, PLMJ SOCIEDADE DE

ADVOGADOS

2. MARTA LEOTE | Director of Research and Consulting, CUSHMAN & WAKEFIELD • NATERCIA PEIXOTO | Tourism Consultant, CPU

3. RAFAEL RODRIGUES, Commercial Director, MOLDURAS ARTE & DECORAÇÃO • NUNO JOSÉ RIBEIRO, Lawyer

4. ERIC VAN LEUVEN, Managing Partner, CUSHMAN & WAKEFIELD • RUI RAMOS PINTO COELHO | Executive Director, INVEST LISBOA

5. NUNO MARTINS | Marketing Director, DARK MANTICORE SYSTEMS & BUSINESS • LUÍS CAMPOS | CEO, DARK MANTICORE SYSTEMS

& BUSINESS

6. JOSÉ ALMEIDA SANTOS | Business Consultant, CONSULNEGE • JORGE FONTAÍNHAS | Electrical Engineer, CELPAPEL

7. CRISTINA MOURA | Managing Director, BUTTERFLY COACHING • ANDRÉ ABRANTES | Lawyer, ABRANTES ADVOGADOS • MARJON

VAN DINTHER DE UTRA MACHADO | Director, CCPH

8. ANA BRANCO | CEO, WTM • VALTER ALCOFORADO BARREIRO | Executive Director, KNOWING COUNTS • CASSIANA BRUEL |

Sales, LEX MARIS

9. ROBERTO LEVY | Partner, FERREIRA & LEVY - INTERNATIONAL MARKETING & EXPORT CONSULTING • ALEXANDRA

MORGADO | Architecture and Space Consultant, PLAN KI

10. DENNIS JOHNSSON | CEO, SEC.72 BUSINESS SECURITY • PAULA ALMEIDA | Sales (Dutch market), TAYLOR PERFORMANCE

11. EVA VAN DER KROEF | Team Manager, MERCATOR • PEDRO MENDONÇA | Account Manager, OCÉ PORTUGAL

Business Networking Event International Business

The Dutch-Portuguese Chamber of Commerce, Associação Nacional dos Jovens (ANJE) and the German-Portuguese Chamber of Commerce young professionals organise the first networking business drinks of the year for 140 business people at Lisbon’s LX Boutique Hotel’s Confraria LX Restaurant.

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PHOTOS | Chris Graeme

Business Report


The key to Lisbon architects Sua Kay’s endurance in the worst economic recession in living memory has been its ability to be adaptable and flexible in executing cutting-edge projects both in Portugal and abroad. Another strong point is that it invests in bright, young talent and competes for proj-ects on the international stage. “Our maxim has always been excellence and delivering projects on time and to budget which meet the client’s specifications and expectations and not those of our own egos. All of our projects have been important, but the real challenge is not the fact we’ve survived, but that we’ve thrived for over 25 years,” says Mário Sua Kay.

The architect, born in Mozambique, agrees that urban regeneration projects could be important for the commercial and residen-tial markets in the absence of new real estate projects in Portugal, but he says that local authorities need to be pro-active and flex-ible. Giving the example of Alcântara XXI, he says it has been difficult to get planning permission. “Buildings have to be renovated to meet the demands and realities of today; to get people back into inner-city areas and breathe new life into old neighbourhoods. The old should co-exist with the new ” says Mário Sua Kay, adding that urban reha-bilitation is very important for older cities like Lisbon and Porto where it is “vital to preserve the best of the past while adapting buildings for present and future needs”.

Mário Sua Kay also believes in the current interest in returning to traditional high street shopping, which he says “has a lot to do with Portuguese culture.” “I think the trend is for mixed-use development which is important to revitalise city centres. We

proposed a project of that type in Poznan, Poland,” he says. On the other hand Mário Sua Kay points out that Portugal has some badly-conceived shopping centres that simply don´t work. Shopping centres, he be-lieves will need to have additional new uses. The shopping experience will increasingly be about the services and attractions that shopping centres offer: transport, pharma-cies, clinics, citizens’ advice shops offering legal services, etc. “It’s interesting that in Korea we’re seeing virtual shops in metro stations with on-line payments that work with QR Reader where purchases are deliv-ered at an agreed time and place,” he says. “Renova has just set up their virtual store in one of the metro stations in Matosinhos (Porto)!”

One of the reasons why Sua Kay has been so successful is that it invested in an inter-national strategy long before the current economic crisis. “Our focus abroad began after our DV Coimbra and Vila do Conde Outlet Factory projects which were innova-tive at the time,” explains Mário Sua Kay. A French developer invited the atelier to compete for a tendering bid for a shopping mall in Torun, Poland. This was followed by the modernisation of a shopping centre in Warsaw and a project in Romania. “We were already doing projects abroad at a time when many architects in Portugal were focusing on the internal market at home,” says Mário Sua Kay, who explains that Brazil is a current priority with shopping centre projects in the state of São Paulo, in Lorena and Itajaí. In Brazil’s northeast, Sua Kay has a residential tourist project by the beach at Pipa, the Praia do Amor Resort, for developer Béltico Group, while in Algeria the atelier is working with a local

developer. “We’re starting a mixed project with residential and commercial compo-nents, a hotel and some street shopping.” Sua Kay has recently been invited to be the design partner in a heavyweight consortium bidding for a major retail project in Casa-blanca, Morroco.

Mário Sua Kay cites Banco Internacional do Funchal´s (BANIF) headquarters in Lisbon as an example of a project which still looks fresh and contemporary today even though it was built 15 years ago. “It’s very impor-tant when designing a building to come up with a design that will stand the test of time,” he says. “BANIF´s built quality alone was instrumental in convincing a client like Siemens that we were the right team to design their hi-tech micro chip factory in Vila do Conde. We strive for this quality in all our projects”.

Another important and recent project is the Red Star Stadium in Belgrade, Serbia. This €700 million multi-use project has two of-fice towers, nine apartment towers of vary-ing height, a two hundred room hotel and a major shopping mall attached to a new fifty thousand seat stadium. The stadium will be financed by the development of the real estate by local and foreign private sector developers.

Mário Sua Kay says that one area of exper-tise they have developed is scale – the abil-ity to design and execute large projects, a fact that has stood the atelier in good stead when competing for work on the interna-tional stage.

He is looking forward to the next 20 years.

Sua Kay Architects

Sua Kay’s considerable experience and the quality of its work over 28 years have brought these Portuguese architects projects from many different parts of the world


An international success story

MÁRIO SUA KAY | Director, SUA KAY ARCHITECTS

“It’s very important when designing a building to come up with a design that will stand the test of time,” ”

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Business Interview


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1. ENTRANCE FROM RUA DR. GONÇALO SAMPAIO

2. D. JORGE ORTIGA | Archbishop of Braga

3. MESQUITA MACHADO | Mayor of Braga • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA

4. ANTÓNIO SALVADOR | President, BRITALAR • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA

5. JOSÉ REGOJO | REGOJO IMOBILIÁRIA • ÁLVARO PORTELA | SONAE & WIFE

6. ANTÓNIO CORREIA DIAS | Developer, DOURO RETAIL PARK • MARIA EMÍLIA TEIXEIRA

7. LUIS MESQUITA, MARIA ANTÓNIA PORTOCARRERO | IMORENDIMENTO • CRISTINA LEBRE | REGOJO IMOBILIARIA

8. ISABEL CARDOSO | MASSIMO DUTTI • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIARIA • RUTE RODRIGUES |

LSCOFFEE • CRISTIANO MARTINS • ANA ANTUNES | DIMODA • CATARINA REGOJO

9. ELISABETE PORMEZINHA, REGOJO IMOBILIÁRIA • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA

• CRISTINA LEBRE, REGOJO IMOBILIÁRIA

10. JAUME LLOPIS, MAGDA DUARTE • MANUEL DIAS FERREIRA • PAULO REGOJO | Board of Directores, GROUP REGOJO

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Liberdade Street Fashion

Liberdade Street Fashion, a Regojo Group development marketed by Cushman & Wakefield, opens in Braga. João António Carvalho, executive director, presents his book on the project and the ancient Roman artefacts uncovered at the site.

Every day is a fashion day

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Business Report


PROVIDING JOBS IN THE COMMUNITYIts involvement in the community is one of the strong trademarks of Dolce Vita shopping centres which have a cultural and social importance, contributing towards its economic development in the creation of direct and indirect job opportunities which forms part of Dolce Vita’s DNA and not merely paying lip service to the community. From the starting point of common guiding principles, each Dolce Vita shopping centre fosters a continual relationship with the local population: cultural and sporting asso-ciations, municipal authorities, educational institutions and other civil organisations, being a partner capable of supporting and giving visibility to initiatives organised by the local community.

SUPPORTING INITIATIVES Dolce Vita has promoted and supported

various initiatives alongside and with social and civil institutions. From all of them special attention is warranted for the Dolce Vita Orchestra which was formed 3 years ago with the aim of teaching music but the effects of which go far beyond mere educa-tion. This project has been a real force for change in the Casal da Mira neighbour-hood, which is by the Dolce Vita Tejo, giving local children the opportunity to ex-pand their educational development while at the same time families view the project as professional and personal opportunity. Many of them go back to studying, seeking to gain new skills with which to find fresh opportunities to re-enter the job market.

CREATING BUSINESS OPPORTUNITIESTo sum up, Dolce Vita puts people first and staff members are invited to share its experience and vision for coming up with innovative ideas, ideas which not only get

the most out of processes and resources but also come up with ideas with the poten-tial to generate new business opportuni-ties. With regards to innovation it’s worth mentioning Six Sigma which is a system to reduce failures, increase customer satisfac-tion, and cut costs, and which has led to the creation of improvement teams within the Chamartín/Dolce Vita organisation, resulting in improved organisational pro-cesses as well as boosting business ideas.

A BENCHMARK PLAYERDolce Vita has won a number of national and international distinctions over the years which recognise its successful well-structured projects. The know-how that the brand has built up over the years in the development, conception, and management of shopping centres places Chamartín’s Dolce Vita brand as one of the benchmark players in the sector at an international level.

The Dolce Vita brand, part of the Chamartín Retail group, with over 60 years experience in the real estate sector, has developed and manages shopping centres all over Portugal which are fami-ly-oriented and have a mixed concept of commercial, leisure and services.

Chamartín Imobiliária has 10 shopping centres in Portugal including the largest shopping centre on the Iberian peninsula and one of the largest in Europe, Dolce Vita Tejo. Situated in the Amadora municipality near Lisbon, the shopping centre had, by the end of 2011, clocked up 15 million visitors, a number which demonstrates the project’s success despite the current downturn.

A DYNAMIC SHOPPING, LEISURE AND WELLBEING CENTREIn fact Dolce Vita Tejo enjoyed sales growth in the region of 10% in 2011 compared with 2010. Dolce Vita Tejo is positioned as a regional shopping centre with a catchment area of around 2 million inhabitants from 6 Greater Lisbon municipalities– Lisbon, Loures, Oei-ras, Sintra, Amadora and the western region. In addition to a wide range of top-quality brands and services, leisure spaces, includ-ing KidZania - a unique-in-Europe family

theme park representing a to scale model town – Dolce Vita Tejo has concentrated on family-orientated activities and fashion, reinforcing its position as a place for shop-ping, leisure and wellbeing.

INVESTING IN SUSTAINABILITYSustainability is one of Dolce Vita shopping centres’ key strategies and is evident in all the development phases of its shopping malls, enabling it to gain important economic, en-vironmental and social benefits. Chamartín operates an Integrated Management System throughout all of its shopping centres, based on the international standards ISO 9001, ISO 144001 and OHSAS 18001, which enables available resources to be used more efficiently and provide a greater range of products and services at a higher quality benchmark. As a consequence, the company’s management system means that it is able to reinforce the confidence with and commitment to custom-ers, suppliers and business partners.

CARING FOR THE ENVIRONMENT Dolce Vita shopping centres have a policy of carefully using resources like energy and water, as well as separating and recycling waste – all practices which have brought clear benefits for the organisation’s efficiency. Measures such as the centralised manage-ment of lighting and air-conditioning, escalators operating on a stand-by mode during quiet periods, water and time effi-cient taps in the toilet facilities are just some of the more effective examples of practical solutions that have been adopted in Dolce Vita shopping centres with clear benefits not only for the company but also for the com-munity and the environment. Over the past five years, Dolce Vita shopping centres have reduced the energy consumption per visitor by 38.2%, while the total reduction in water consumption stood at 15% and the separa-tion of recyclable rubbish stood at 41.3%, representing an increase of 11.8% over the past 5 years.

A successful brand

Business Promo


The Portuguese investment market currently offers excellent opportunities to invest in all kinds of assets at different levels of risk ac-cording to Jones Lang LaSalle’s head of capital markets, Walter Fábrega.

“We’ve identified opportunistic institutional investors seeking both value added and distressed assets at prices with big discounts, a high level of commercial risk but with enormous potential to increase in value over the medium to long terms if they fit in with their investment return objectives,” says Walter Fábrega. Both the office and high street segments are providing key opportuni-ties for investors right now, particularly those with ‘prime’ characteristics, namely prime locations, recently built quality properties, and those with long, watertight contracts and credible, reliable tenants. “These are what define liquid assets that continue to be sought after in our market,” explains Walter Fábrega who points out that there is product at invest-ment values of between €2 and €50 million.

While debt and debt restructuring is in the forefront now as banks suffer increasing levels of credit default, there will continue to be some refinancing facilities from banks for companies that meet their borrowing obliga-tions, while those that cannot will be forced to sell their assets. “The current market will not leave much room for contracting more debt since the banks’ criteria is much more selective, while the costs in terms of interest are extremely high,” says Walter Fábrega who also points out that there are investors who don’t currently have the ready cash. “These conditions mean that the perspectives for investment in 2012 aren’t very favourable for debt buyers.

That said, there are investors with the capacity for investment or the ready cash to complete some deals, especially private Portuguese investors (up to €15 million), private Spanish investors (up to €30 million), as well as some International Investment Funds (Equity Buy-ers) with the capacity to put down hard cash for products that require an additional spread

in order to ensure their profitability. “We also think that the current market conditions are ideal for the creation of partnerships and joint ventures between investors and owners, with opportunities for buying up assets that can be negotiated through paying in tranches.The Portuguese market has some other good investment opportunities like products in the hotel segment in prime Lisbon city-centre locations, from prestigious operators with know-how and track records. “In this market we’re seeing historically interesting indicators, such as very attractive average occupation rates and investment volumes of between €10 and €50 million,” he adds.

Jones Lang LaSalle says only the best products are in demand in the logistics sector, although there are top-quality logistics platforms in good locations and tenants with attractive contracts.

The market offers other opportunities for opportunistic and value added investors as well as non-conventional investments, as is the case with hospitals which currently have interesting products for some investors.

Investment in the office sector in prime areas will continue to present the best opportunities in cases where the vacancy is less than 10%, coupled with the realities of reduced rents which are viewed as an opportunity. “We think buildings in the best prime locations that need refurbishment will provide good investment opportunities at attractive prices,” says Walter Fábrega.

Overall Jones Lang LaSalle believes that in a recession Portugal, as a periphery country, reaches the bottom and recovers later than other traditional European markets, “ suffers later, suffers more, and takes longer to re-cover,” Walter Fábrega points out; adding that after each recession there is always a period of uncertainty, for growth potential and new opportunities.

“After the 2011 bailout, it will be a question of time and confidence before we see how the

market reacts and how international investors view the risk of real estate and, in the wider sense, Portugal as a market,” explains Walter Fábrega.

With Greece the focus of attention, Portugal has remained on the sidelines in the news in recent months, because it is meeting the IMF programme which is causing sweeping structural reforms, many aimed at controlling public spending, but others directed at the real estate sector in particular, to encourage city centre regeneration. “It’s difficult to see how these reforms, had they not been insisted upon by Europe, would have happened. Once again, it’s an exceptional situation, with risks and opportunities,” says Walter Fábrega.

In 2012, opportunity analysis will be made with greater focus on each local market fun-damentals (‘Thinking globally, Acting locally’) and in particular on the sustainability over time of the returns for any type of asset. “We think that traditional markets will continue to show important amounts of investment because they will have the most liquidity (United Kingdom, Germany and France), but also the markets that had a very active year in 2011 and which continue to show growth potential for investors (Russia, Poland, Czech Republic and Sweden) will show a good per-formance,” he explains. The strong demand for traditional markets and high activity of other secondary markets has caused a signifi-cant increase in prices, which means it will be increasingly difficult to obtain attractive profit levels. That’s why more investors began to identify opportunities in other markets. In this scope, Portugal is in the first line when offering excellent opportunities with low risk and very attractive returns.

Getting back investor confidence is a matter of time and the adjustment in prices will bring the prices gap between property own-ers and investors closer. During the second half of 2012, we will see the first deals at very adjusted prices, and that will boost the invest-ment market,” Walter Fábrega concludes.

“Now is the time for investors with capital to pick up all kinds of assets at attractive prices with potential to gain in value in the medium and long-terms” says Jones Lang Lasalle’s head of capital markets, Walter Fábrega


PortugalA land of real estate investment opportunities for those with cash

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WALTER FÁBREGA | Head of Capital Markets, JONES LANG LASALLE

There are very attractive opportunities for private investors looking for assets in prime and stable sites with high yields and less risk

Business Interview


Cempalavras

Bureau Veritas Portugal www.bureauveritas.pt [email protected] 707 200 542

n Inspecções n Auditorias n Ensaios n Certificação n Classificação de Navios n Controlo e Assessoria Técnica n Formação

bureau veritas, o seu parceiro para as várias etapas do seu negócio

Proporcionando um conjunto de serviços e soluções inovadoras nas áreas da Qualidade, Ambiente, Saúde e Segurança, independentemente do seu sector de produtos, activos ou negócios.

sector has developed more rapidly than residential rental accommodation, with new players (developers and investors) taking advantage of new rules and coming up with new solutions that have enabled them to operate in an almost normal market; but this is not enough to have an overall efficient and healthy market.

The good news is that all this could be about to change soon.

On December 30th, 2011, the Government presented the Portuguese Parliament with a bill proposal aimed at changing the urban rental law regime. This proposed law, which is currently being debated, and is expected to pass through parliament by the end of March (coming into force by the end of June), repre-sents a real break with the past.

The changes introduced by this proposed law are, in essence, the following: 1. With regards to blocked rents and manda-tory renewals of old contracts, a mechanism has been created to update the rents and transfer the contracts onto the new regime, which is based on the principle of private ne-gotiation (although with a regime rule in situ-ations where agreement is not reached), and which will permit, in a relatively short period (of between 1 and 7 years), the termination of old contracts or, at least, the termination of rent freezing; 2. As to the automatic transferral of the right to rent on the death of the tenant, the pos-sibility of successive transferrals will be elimi-nated. Furthermore it will be impossible to transfer the right to rent for anyone who owns their own house or is renting in the same municipality, and a rule will be introduced which will transfer some of the old contracts to the new regime in the case of direct rental transference;

Reforming the Urban Rental LawNew opportunities for developers and investors

Portugal’s urban rental market has gone through choppy times since the beginning of the 20th century. At that time, as was the case all over Europe, Portugal began to freeze rents and introduced the mandatory renewal of rental contracts which, in practice, has continued ever since.

It’s true that the 1990, 1995 and 2006 reforms improved things for future contracts which benefitted from a more open regime, whereby rents were not frozen and the termination of contract regimes could be freely negoti-ated. But the fact of the matter was that these reforms did not bring changes to the regime of old contracts (i.e. residential contracts before 1990 and commercial ones before 1995), which created a two-speed market (old contracts v new contracts), bringing all the inherent disadvantages with it.

The bottom line is that successive govern-ments since the 1974 Revolution have been incapable of implementing a genuine rental law reform, with dreadful effects both on the rental market and the country’s economy. A virtual lack of a residential rental market forced people to purchase their own homes, which led to unsustainable levels of private and external debt, and a malfunctioning commercial rental market prevented new businesses from developing

The rental freeze, the mandatory renewal of contracts, the transference upon death of rental rights, and the virtual impossibility of terminating contracts to undertake profound works - which were the hallmarks of the old contracts regime - together with the poor functioning of the courts, which prohibit the immediate eviction of non-compliant tenants, have brewed an explosive cocktail, which brought us to the present situation. Since the 1995 reform, the commercial rental

MIGUEL MARQUES DOS SANTOS | Head of the Department of Real Estate and Urban Planning

GARRIGUES PORTUGAL

3. As to the regime of works in rented build-ings, it has been established the possibility of ending the rental contract for demolition and extensive works by mere communication to the tenant (instead of the need of a court pro-cedure), having also been established that for contracts prior to 1990, when there is a lack of agreement between landlord and tenant, the termination of the contract only obliges the landlord to the payment of compensation to the tenant (except in cases whereby the tenant is 65 or over or disabled to a degree of over 60%, in which case the landlord will be obliged to re-house them); and 4. With regards to eviction, a Special Eviction Procedure has been created which will take place out of courts, in the new “National Rental Office”, having also been established a number of rules to ensure that in cases where it is necessary to appeal to the courts, the judicial processes will be more speedy and efficient. Despite there being various aspects of the proposed law which could and should be improved (the majority in parliament has already shown an openness to introduce im-provements in the scope of the parliamentary debate that is currently underway), the solu-tions included in the proposed law, are overall very positive. The market will be more open, less regulated, more dynamic and securer, enabling it from now on to compete more equally with rental markets in other European Union countries.

The fact that the Portuguese market is still a green market, being far from its cruise level (which will naturally enable greater growth rates) and the fact that we will now have the same kind of laws practised in more devel-oped markets (which will necessarily mean greater security for the investment), means new opportunities for investment for both developers and investors.

Partners Opinion


Setting the Bar

Business Development manager for Bureau Veritas, Ricardo Ferro, discusses the organization’s activities in Portugal and abroad

What are B.V’s objectives, strategies and prospects for 2012 in Portugal? Bureau Veritas Portugal is committed to consolidating its operation in Portugal in comparison with 2011. We’re aware that the country is going through a period of economic contraction and that our clients are faced with that reality, however our goal is to leverage our domestic activities through the support we can provide companies in their international expansion. Our network of 900 offices in 140 countries, with over 48.000 employees, allows us to secure our services portfolio in those countries.

B.V. operates in a wide variety of fields. Which is your most relevant activity in Portugal?Bureau Veritas’ mission is to inspect, as-sess and certify goods, as well as projects, products or systems, according to internal or external references, in order to issue a conformity report. Within that mission, we are divided into 8 business fields. The areas with the greatest volume are Industry and Inspection Verification Services, providing services such as the conformity assessment of industrial equipment and premises that is mandatory or specified by the client, project review, workshop inspection (contractors), site inspection (yard), asset management, employee qualification, certification of industrial equipment and testing (ex. non-destructive testing).

Regarding Inspection Verification Services (IVS) we carry out periodic inspections of equipment and premises according to manda-tory regulations or client specification, and we also provide services relating to electrical installations, fire fighting systems, pressure and lifting equipment and machinery. The third largest area in terms of turnover and number of staff is international trade represented by services rendered to govern-ments, such as pre- and post- shipment in-spections, x-ray, verification of the conformity of imported goods and verification of the conformity of the construction and quality of products, as well as the inspection and con-trol of merchandise for import and export.The area with the greatest exposure and no-

toriety is Certification, which involves the certification of management systems, pro-cesses, products/services and people in the fields of quality, health and safety, environ-ment and social responsibility and second party audits based on the clients’ specifica-tions or references developed by BUREAU VERITAS Certification.

In Construction, we operate in a comprehen-sive manner in order to respond to all of the regulated demands of the construction sector, as well as all needs in technical assistance. We carry out technical quality control, techni-cal structural control, project management, audits and surveys, technical support in asset management, safety during construction (coordinating on site safety and health pro-tection, prevention plans and verification of conformity during construction) and finally, technical assistance during construction in Quality, Environment and Safety.

Regarding Health, Safety and Environment (HSE), we carry out inspections, audits and measurements in the fields of the environ-ment, health and safety and we offer techni-cal assistance to help organizations define strategies to manage their HSE, namely: Due Diligence audits, Prevention of Risks at Work, Safety Advisors, Legal Conformity Assessments, Strategic Plans, Waste Manage-ment Plans, Environmental Impact Plans, Environmental and Safety Surveys, General Risk Assessment, Fire Hazard Risk Assess-ment, Emergency and Evacuation Plans, Technical Outsourcing.

Finally, I must mention Bureau Veritas’ his-tory in marine activity, with the classification of ships, equipment certification, technical assistance and outsourcing services. Fur-thermore, across the board, we can provide training in every field and expertise where we operate in a technical capacity.

Is B.V’s presence in African markets independent or managed through Portugal?Bureau Veritas is present in the principal African countries, and we have a very close collaborative relationship with the PALOP

countries. Our operation in Angola, for example, is very strong, our second larg-est in Africa, after South Africa. Those who have been to Angola know that we are an undeniable player in our fields. To illustrate this relationship, I can share that there are joint projects between BV Portugal and BV Angola involving hundreds of thousands of Euros.

What are the main fields in which BV operates in Africa?Our services portfolio in Africa is the same as the services we provide in Portugal. As an example, and with Angola being the Af-rican country with which we have the most frequent business exchanges, I can state that in terms of importance, it is the industrial, international trade and consulting & training areas, within the framework of our Health, Safety and Environment (HSE) sphere, which carry the greatest weight. Nonetheless, our services in the construction field are growing at a very positive rate.

What is your current positioning in the construction market in Portugal? Bureau Veritas positions itself as a company of reference as an independent third party and in quality control in the construction sector. In the last three years, Bureau Veritas’ Construction Department has doubled its turnover, asserting itself in the buildings sector, but also in the transportation and renewable energies sectors.

Examples of Bureau Veritas’ presence in the national market is the technical control of the AquaPortimão, Leiria Shopping or Dolce Vita Tejo shopping centres, Portela airport, Cascais Hospital and Hospital da Luz, Torres Colombo or the Certification of sustainable buildings (LEED and BREEAM).

In terms of infrastructures, we have consoli-dated our position in Risk Management, and have launched in Portugal the laboratory and on-site control of the materials used in road concessions. We have also participated in the development of projects abroad, taking advantage of the Bureau Veritas network of contacts and offices all over the world.

Interview | Sandy Guedes de Queiroz

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RICARDO FERRO | Director, Business Development Department, BUREAU VERITAS

Our network of 900 offices in 140 countries, with over 48.000 employees, allows us to secure our services portfolio in those countries.

Business Interview


The innovative Sky View feature found in the Sky Suites in the first phase of the devel-opment is repeated in these new properties also feature rooms with retractable ceilings to enjoy the star-spangled Alentejo sky.

These new villas costing from €350,000 to €450,000 make up the second phase of the L’AND VINEYARDS development, offering a unique rural experience in an exclusive contemporary environment within a charm-ing rural setting.

L’AND VINEYARDS is located in the central valley of a vineyard and olive grove. The buildings have been carefully planned into small clusters which blend seamlessly into the surrounding landscape and the gently rolling Alentejo hills.

Five internationally renowned architects

have implanted their own distinct style on each cluster of properties, reinterpreting traditional Mediterranean-patio houses. Lisbon-based PROMONTORIO Arquitectos has also designed the cluster of serviced vil-las, the nucleus of serviced townhouses and the central building and winery. The remain-ing clusters of L’AND VINEYARDS serviced villas were designed by London-based Sergi-son Bates Architects; Lisbon-based João Luís Carrilho da Graça Arquitectos; Architektur-büro Peter Märkli, Zurich; and José Paulo dos Santos Atquitecto, Porto.

L’AND VINEYARDS is a charming luxury wine resort set in peaceful and stunning landscape of Portugal’s Alentejo landscape.Surrounded by vineyards and a lake, L’AND VINEYARDS has an exclusive country club atmosphere with only 22 suites integrating modern architecture with nature.

L’AND VINEYARDS is situated around a formal vine garden and a swimming pool commanding sublime views of the lake and medieval castle on nearby hill at Monte-mor.Interpretations on Roman and Moorish architecture inspired by the local vil-lages were used in designing the central reception building with the spacious living room, library, gift shop offering bespoke L’ANDMADE products, the winery ‘wine club’ an 800m luxury spa, a courtyard restaurant and lobby lounge area.

The interior decoration of the public spac-es, namely the winery, the restaurant and the hotel L’AND Vineyards Resort (Small Luxury Hotels of the World), was designed by Márcio Kogan with original pieces of furniture, creating a sober yet luxury décor with simplicity of detail.

In the heart of the Alentejo Countryside

THE LAKE VILLAS, the second phase of L’AND VINEYARDS, a unique wine resort set in the tranquil Alentejo countryside, is currently being commercialised by SOUSA CUNHAL TURISMO.

Charming Cluster of Villas

L’AND VINEYARDS | THE LAKE VILLAS

Designed by PROMONTORIO architects, the Lake Villas have been built around the development’s lake with two-bedroom and three-bedroom properties with 141m² and 172m² GLA respectively, within an average plot of 1,500m².

The Lake Villas have been developed around a patio with a pergola over a private pool, reinterpreting the concept and spirit of L’AND architecture in harmony with the element of water.

Business Promo


> LEFT TO RIGHT >

1. CHRIS BARTON | CEO, BPCC • ANTÓNIO COMPRIDO | Board Member APETRO • PAULO PORTAS | Portuguese Minister of

Foreign Affairs • JILL GALLARD | British Ambassador to Portugal

2. PAULO SILVA | Managing Partner, AGUIRRE NEWMAN • PATRÍCIA LIZ | Managing Partner, AGUIRRE NEWMAN • ERIC VAN

LEUVEN | Managing Partner, CUSHMAN & WAKEFIELD

3. PAUL BURTON & ANTÓNIO COMPRIDO, Board Member APETRO

4. CLÁUDIA VIDREIRO, Research and Services • ESTELA BAPTISTA | Administration • HELENA FERNANDES | Events & Services

• CHRIS BARTON | CEO, BPCC

5. JOHN STILWELL & MARK STILWELL

6. MARK DAWSON & MANÉ DAWSON

7. OLIVEIRA ROLO & FERNANDO NEVES

8. PETER & VALERIE DAWSON

9. JOSÉ JOAQUIM FREITAS DE ARAÚJO | MILLENNIUM BCP

10. JOÃO ALVES & DOROTHY ALVES

11. FILIPE & ULRICA LOWNDES MARQUES

12. RENATA RAMALHOSA | BRITISH EMBASSY - UKTI • JILL GALLARD | British Ambassador to Portugal

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Foreign Minister Paulo Portas was the speaker at the commemorative dinner to celebrate the centenary of the British-Portuguese Chamber of Commerce.

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BPCCCentenary DinnerPaulo Portas at the British-Portuguese Chamber of Commerce

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Business Report


set their own agendas and pace. Lining the cobbled main street between these honeycombs of enterprise are a myriad of cafés and restaurants: A Mesa - an Italian eatery with pizzas to die for, where you can eat to your heart’s content for 7€, a restaurant serving up tasty vegetarian options with an outdoor garden, or the snack café Landeau that’s famous for one thing – the best choco-late cake you’ve ever tasted. The accent in this small and compact com-mercial warren is on the stylishly different, the organic and the sustainable. There’s a bio-supermarket, for example, which may not be as cheap as Pingo Doce but it is 100%

healthy. There’s the chance to enjoy a coffee while perusing over the volumes in one of the most original bookshops in Lisbon, Ler Devagar, which is packed from the floor to its lofty ceiling with new and second-hand books, oh, and often hosts small arty semi-nars and meetings. LX Factory already attracts dynamic events like Open Day, which is now in its eighth year, takes place in May and offers a full pro-gramme of arts, design and entertainments with projects, exhibitions and performance arts events, and the LX Market which is open on Sundays.There’s even an art colony, the Red Bull House of Art, with resident artists of all

persuasions at the very top of LX Factory from where you get 360º panoramic views of the River Tejo and the emblematic April 25th bridge. In what has become a success story of urban regeneration in its rawest, most human form, with scores of small companies and business-es, and the possibility of attracting tourists to what could, with a little more imagination and investment become the Camden Town of Lisbon, LX Factory provides a model to other developers, investors and municipal authorities of how a little imagination and talent can transform a once rundown inner-city area into a young, creative and exciting new urban environment.

Hidden away behind Largo do Calvário in Lisbon’s waterside Alcântara district, in what were once early 18th century textile warehouses, a quiet revolution is going on.

LX Factory A hive of young entrepreneurial talent

For behind the façades of shabby chic shops and restaurants selling bio-organic food and kooky kitsch household items is a veritable hive of business activity. A positive vibe generated by scores of micro-companies run by a largely young and talented bunch of Portuguese entrepreneurs that represent the future for this country. Nestled amongst the once disused manufac-turing complex of buildings are architecture firms, internet start-ups, advertising agencies, boutiques, performing arts schools, design

studios, IT and software companies, fashion designers and yes, magazines. In fact the new business magazine you have in your hand, Partners in Business, is also based in the lofty warehouse that is filled with enormous old printing machines reflecting the industrial relics of a bygone age. The atmosphere at LX Factory is relaxed, yet strangely charged and dynamic. Young people, dressed informally in shabby urban chic, sit around tables in the café on the fifth floor, Quarto com Vista, pouring over

laptops and notebooks, exchanging ideas and getting inspiration from one another. Others, leaving a large central room, Cowork Lisboa, where countless one or two people businesses believe its better to work in com-pany than in isolation at home or in a rented office, relax in an unregulated coffee break on old car seats or casually smoke on the balcony. Here there are no company rules, no Salazar-like paternal bosses controlling each and every movement. This is a place for self-starters and motivated individuals who

Business Promo


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1. JORGE SOUSA MARRÃO | Partner, DELOITTE • PAULO MACEDO | Portuguese Minister for Health • WILLIAM T. CUNNINGHAM •

MARGARIDA BAJANÇA | DELOITTE • FILIPE SIMÕES DE ALMEIDA | Partner, DELOITTE

2. MANUEL RAMALHO | President, ICPT • NUNO CARNEIRO | Director, FRONTLINE

3. ANTÓNIO SARAIVA | President CIP

4. JOSÉ MANUEL SILVA | Bastonário da Ordem dos Médicos

5. CONCEIÇÃO CORREIA | Board Member, FLUXOGRAMA • MARTA CORREIA | Board Member, FLUXOGRAMA

6. HENRIQUE CAPELAS | Health manager SNS • FÁTIMA VALADA FERREIRA | JRC Advogados • EURICO ALVES | Africa consultant, ERS

7. JOSÉ CARIA | Communication Consultant • ANTÓNIO CARMONA RODRIGUES | former Lisbon Mayor

8. JORGE DELGADO | COMPTER • MANUELA VALE | Segurança Social • JOÃO JACINTO | FRONTINO TURISMO • HELDER BRÁZ |

RH MAIS

9. CARLOS DURÃES DA CONCEIÇÃO | Board Member, PARPÚBLICA • JOSÉ FRIAS GOMES | Director, CENFIM

10. CARLOS SÁ | CMO, TALENT – Individuality Through Education • MIGUEL CARDOSO E CUNHA | board advisor, COMPTA

11. LUÍS PALMA DA GRAÇA | Chief Development Officer, VALLIS CAPITAL PARTNERS • ARMANDO GARÇIA | doctor, INSTITUTO MICRO

CIRURGIA OCULAR

Business Report

The Health Minister, Paulo Macedo, addresses top businessman and medical professionals on the challenges facing the national health service (sns) at an ICPT luncheon in Lisbon in February

Health Minister addresses the International Club of Portugal

Lisbon Luncheon

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PHOTOGRAPHY | Chris Graeme

Business Report


Because I’m emotional, I really believe in what I’m doing and I believe in the best of both countries.

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The first scholars were sent to the United States on educational exchange trips through the American Club in 1986. The association, as well as being made up of past scholars, would also create potential young new Ameri-can Club members because “they will be the future of Portugal”. There could also be the possibility of bringing American scholars to this country and even organising job place-ments in specific fields.

As president, with Charles A. Buchanan Jnr or ‘Buck’ a he is affectionately known, as vice-president, and John Scott Johnson as trea-surer, “I will make executive decisions without always needing to consult other people. We need to try out some new projects; some will work and some won’t. An example: widening our types of speakers, like inviting the Grand Masters of the main Masonic lodges,” she explains.

Anne admits she’s an emotional person, which is not always easy to see when she’s busy buzzing around with cool efficiency, with American Club secretary and right-hand lady Cristina Martins Camilo, making sure the lunches run smoothly.

“Because I’m emotional, I really believe in what I’m doing and I believe in the best of both countries. The best of Portugal is things like fado, the weather, the friendliness; the best of America is the work ethic, where your word can be your bond, where honour is held very highly. Mixing those aspects together is what I’d like the American Club to represent,” she concludes.

Favourite music: Whatever my kids like; it keeps them happy in the car!

A famous person I’d like to meet: I’ve met many but haven’t met Barack Obama yet.

We want to attract bright new people, they will be the future of Portugal

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after she returned to classes as normal.

“Although my mother thought it was fun going out into the streets with carnations on May Day, a lot of my father’s friends lost land and had to get ‘real jobs’ and move out of the country,” she says.

Anne Taylor points out that the family never really talked politics at home, and was never affiliated to a specific party and says she believes in candidates “on their own merits”.Involved with the American Club since October 1994, her father having been a member before her, she says that all those Portuguese businessmen don’t intimidate her and she’s never shied away from rolling her sleeves up with the boys at times, while stressing she knows how to get in touch with her feminine side.

She was a strong admirer of the American Club board member António Maria Pereira for his capacities to get things done. Her favourite speaker is Paulo Portas. “He really believes in his country, always has. I think he’s an honest man as most members of this coalition government, I believe, are,” she adds.Anne Taylor thinks that 2012 and 2013 are going to be turning points for Portugal, which will prove that it is not like some of the other debt-ridden countries.

She will have two years at the helm of the American Club in which to make her mark, and has already made a good start by appointing a new board of directors, all Por-tuguese, and beginning work on her project to create an alumni association for past win-ners of the American Club Awards.

Anne Taylor talks about her role as new President of the American Club and her plans for the two year tenure

Looking for the best ofBOTH SIDES

When Anne Taylor came on vacation to Portugal in the summer of 1988 - when the Chiado shopping mall was burning - to visit her godfather who had a farm, she never dreamt that she’d made an appointment with destiny and would stay and eventually become president of one of the most hallowed and respected institutions on the Portuguese business scene.“I met the next-door neighbour and ended up marrying the neighbour’s brother,” she recalls, adding that her mother is of Por-tuguese descent and her father, managing director of Mobil Oil, came to Portugal in 1959 to look for oil but found his ‘Lusita-nian pearl’ whom he married.

Most of her youth involved moving around from different countries every three years, which she says helped her be independent, adaptable and have a flair for languages, particularly French.

Because of this her friends were often the children of diplomats some of whom she studied with at the French Lycee. It created roots with Portugal since Anne visited cous-ins here every summer.

“The French have a different way of thinking and culture from the Americans, whereas I got that sense of American principles and protestant work ethic from my Methodist upbringing,” she says.

Anne lived in Portugal through the Revolu-tion in 1974 because the new government wanted to keep on good terms with Mobil Oil. “Frank Carlucci, a US ambassador, called my father at 7am that April 25th morning to say ‘do not take the girls to school!” she remember, adding that the day


Special Partners Interview


and have proved successful because of the quality of their work and flexibility of their teams. Apart from promoting the export of other goods and services, the construction sector has raised Portugal’s image abroad, having won countless international awards for prestigious projects which have been de-signed and built by renowned architects and urban planners working internationally.

Portuguese ateliers like Sua Kay Arquitectos, Promontório, Miguel Saraiva & Associados and CPU Urbanistas e Arquitectos and Por-tuguese companies are designing, building, overseeing and managing road, railway, port and airport projects all over the world, con-tributing to the integrated development of various countries’ infrastructure and build-ing developments. Real estate and tourism development companies are taking the lead in spreading their wings to new interna-tional markets; companies like Tivoli, Béltic and Promovalor. Efacec, the largest national electrical mechanics group is another case in point when it comes to internationalisa-tion in the last decade. The company is the world leader in large-scale transformer technology (shell-form transformers). Its president João Bento believes that Efacec, while maintaining its Portuguese roots, is: “probably the most international Portuguese firm.” Renova, the household hygiene paper and cleaning product manufacturer, has increased its presence in foreign markets through innovation and by making large investments in marketing campaigns and slick branding. Iberomoldes is a benchmark leader in the moulds industry in which Por-tugal has become internationally competitive in recent years. (95% of its total output is exported). The right approach for business leaders anywhere in the world today is to see international opportunities through the lens of their business models. In fact, if a firm concentrates its energies on just fighting globalisation, it will only lose its competitive edge and waste time and money.

Portugal must focus more on

Globalisation

Globalisation has created a business environment in which inflexible business models have become obsolete. Only those businesses that are capable of operating on an international business stage can survive and thrive. Portugal must overcome its weaknesses with regards to globalisation.

With all this talk about globalisation in recent years, one starts to wonder if this is something relatively new. The reality is that globalisation is as old as the hills and business itself. In fact Portugal created the framework for the first global village way back in the 14th century during the time of the Discoveries when intrepid explorers set out to find routes to India, China and Japan, and discover new lands in South America.

This fearless desire to set sail in search of the undiscovered rather than sticking to the known world gave Portugal an advan-tage over other nations. Indeed, this small country at the far south-western corner of the European continent, with a limited market and finite natural resources has an important message to impart: a country’s - or for that matter a company’s - geographi-cal and physical dimensions have not, until relatively recently, been critical factors for global competition. Looking beyond current geostrategic boundaries is a key factor for success in an increasingly and irreversibly globalised world. Despite the unresolved issues facing WTO meetings, free trade has nevertheless turned developing countries like Brazil, Russia, India and China (BRICs) into major competitors on the world scene, with enormous ramifications for rich nations in the developed world. The only way for Portugal to redress the dismal growth levels that have plagued its development for the past 30 years is for its firms to fully embrace an internationalization strategy.

Many companies in countless sectors of the economy are choosing the internationalisa-tion model as their main strategy for suc-cess, and today are setting the benchmark both nationally and internationally for other companies to follow. In the construction sector, for example, companies like Mota Engil, Teixeira Duarte, Soares da Costa, among many others, have long pursued business strategies in international markets

VICTÓRIA FERNANDES | Sociologist

Business Report

Victória World Travel (VWT) Guides may beacquired online at amazon.co.uk, bookhouse.pt,fnac.pt or at Portugal `s leading bookshops. At www.victoriaworldtravel.com youTravel better & wisely

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“There will be a lot of innovations this year, we’re launching the MIPIM Real Estate In-vestor’s Summit,” says Filippo Rean, MIPIM director who points to the success of the Mayor’s Think Tank four years ago. For the first edition of RE-Invest ‘Thought Leaders’ will analyse the future of fund man-agement, looking for a new model with the findings contributing towards an industry report.Taking place on March 6th, RE-Invest will bring 40 investors together from pension funds, sovereign wealth funds and insur-ance companies, including GIC (Singapore), Teacher Retirement System of Texas (US), MN Services (Holland), First Swedish National Pension Fund (AP1) (Sweden) and the Dutch Railway Pension Fund (SPF) (the Netherlands) to discuss the key issues facing the real estate financial community today.

“To help our clients to learn more about sector innovations and take advantage of good practices, we’re launching ‘Building Innovation’. This new programme will put buildings centre-stage by highlighting in-novative initiatives that enhance the value of real estate portfolios,” says Filippo Rean, adding that it will include a pavilion with the most innovative technology and busi-ness solutions, featuring several develop-ments, architecture firms and technology solution providers. A series of conferences will be devoted to the architectural, eco-nomic, social and environmental challenges facing today’s buildings. To prepare the ‘Building Innovation’ programme for the long-term, MIPIM has formed a partner-ship with the Real Estate and Sustainability Chair at ESSEC International Business School. Professor Ingrid Nappi-Choulet, who heads this discipline, will lead the con-ferences and prepare an overview of all the topics covered at MIPIM to help advance knowledge in this constantly-evolving field. Filippo Rean says that MIPIM is the “mir-ror” of the global real estate market, gather-ing the whole spectrum of real estate play-ers from over 90 countries, providing an

“exceptional platform” to have an overview of what’s going on in the real estate sector on an international scale.“We expect more than 19,000 unique par-ticipants compared to 18,624 last year. The current trend of registrations is confirming our forecast and we’re up on last year”, he explains.Of the countries considered important for the industry, Germany continues to be a key player and this is one reason it was chosen as this year’s Country of Honour. Germany has been chose because, as the strongest economy in the Euro zone, it is the largest market in continental Europe. German real estate players and investors have a pivotal role in real estate markets. German companies have always attended MIPIM in great numbers, making Germany one of the top three participating countries at MIPIM.

As part of the Country of Honour pro-gramme, a series of German-focused events is scheduled during MIPIM. This includes the keynote speech of Joschka Fischer, the former German foreign minister from 1998 to 2005, who will discuss the challenges of the European financial crisis that are so critical for the future of real estate. The conference programme will also feature two other conference sessions: one review-ing the best investment opportunities in Germany in terms of sites and types of as-set; the other highlighting the cooperation models of cities with investors and private partners.

However, the real estate industry is global and in the current economic context inves-tors are cautious and carefully evaluate each project. Europe’s robust position is evident with exhibitors from France, with the Grand Paris showcased on the Paris Region stand; from Italy, with Rome’s return; Spain with Barcelona, and a strong presence from the Russian Federation and Eastern Europe. Asia will also be well represented with ma-jor companies from China, Japan, Taiwan

and South Korea. South America also has a presence with Grupo Mariana (Nicaragua) and Inprotur Instituto Nacional de Promo-cion Turistica (Argentina), as well as the Middle East Qatari Diar (Qatar) and the United States (Related Companies and Thor Companies) and Montreal (Canada).“The main role that MIPIM can play is to provide real estate professionals with cutting-edge information and direct access to senior industry professionals to help them form an opinion to base their growth strategies on solid foundations,” says Filippo Rean .A conference programme highlight will be the dialogue between Jean-Michel Six, chief economist for Europe at Standard & Poor’s and Bernhard Berg, managing director of IVG Institutional Funds GmbH, who will share their analysis on the best investment opportunities. MIPIM is a global real estate market where a whole range of projects can be found: residential, offices and shopping centres. “It seems important to us to provide attendees with an overview of the global real estate market, as well as accurate information on specific branches of the industry.“It was already doing this with sectors such as tourism real estate and social housing,” he points out.Among the 60 conference sessions sched-uled, MIPIM 2012 will enlarge this scope with specific focus on logistics and sports facilities.MIPIM 2012 will also give major coverage to investment issues in the property sector. These sessions will look at investment-relat-ed issues from various angles. All the main countries will see their distinctive features analysed including several conferences on Asia, which will be scrutinised in detail to determine the best investment opportuni-ties. A session, jointly organised by IPD, will analyse the features of the British mar-ket, a two-speed market between London and the rest of the country. Another session will be dedicated to Spain, where legislation has changed with the new government.

MIPIM 2012 is all about innovation. Anticipating and reflecting changes in the international real estate markets and hosting business focues events. MIPIM Director Filippo Rean explains more.


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FILIPPO REAN | Director, MIPIM

””Germany continues to be a key player and

this is one reason it was chosen as this year’s Country of Honour

Business Interview


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> LEFT TO RIGHT >

1. ÁLVARO SANTOS PEREIRA | Portuguese Minister for the Economy

2. NICHOLAS L. RACICH | COO, BANCO BIG • ELIO OLIVEIRA BOGA | Vice President, CITIBANK INTERNATIONAL PLC

3. GRAÇA DIDIER | AMCHAM • CARLOS MORAIS | Managing Director, SISAB • JOSÉ JOAQUIM OLIVEIRA | Board President, AMCHAM

4. VICENTE PEDRO NUNES | Financial Director, RIBERALVES • RICARDO ALVES | Manager, RIBERALVES • JOSÉ ELIAS | President, AZEOL

5. NUNO NORONHA | Director, CHARTIS • MIGUEL COSTA DUARTE | Board Member, COSTA DUARTE CORRECTOR DE SEGUROS

6. JAIME ESTEVES | Partner, PWC • JOSÉ SÁ CARNEIRO | FLAD

7. NUNO PORTELA BELO | Partner, DELOITTE • RICARDO BASTOS SALGADO | Coordinating Director, BES • MANUEL SANTOS

CARNEIRO | Consultant, RANDSTAD

8. MIRA AMARAL | Vice President, ANIET • JORGE VIEGAS | Managing Director, RP GLOBAL

9. RUI GOMES AMARAL | Board Member, MONTEPIO • OSVALDO LUÍS COUTO | CEO, FABRICA DE TOBACO MICAELENSE

• NUNO MUNIZ | Board President, FABRICA DE TOBACO MICAELENSE

10. ANTÓNIO CORRÊA FIGUEIRA | Board Member, LUSO ATLÂNTICA • EMERICO GONÇALVES | CHARTERS

• MIGUEL DE PAPE | Director, MARSH

11. FERNANDO SILVA | Vice President, INCI • ANTÓNIO FLORES DE ANDRADE | President, INCI

12. ANTÓNIO JORGE | CEO, SUGALIDAL • PEDRO ROCHA MATOS | Partner, HEIDRICK & STRUGGLES

13. RICARDO OLIVEIRA | Lawyer, PLMJ SOCIEDADE DE ADVOGADOS • CARLOS FIGUEIREDO | Senior Legal Counsel, UNILEVER

Minister for the Economy, Álvaro Santos Pereira, addresses 200 businessmen at a luncheon organised by the American Chamber of Commerce in Portugal

Álvaro Santos Pereira at the AMCHAM Luncheon

Am Cham

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PHOTO | Chris Graeme

Business Report


The G-Class family currently has three differ-ent versions: station wagon, shooting break and cabriole, enabling them to be combined with a V6 diesel engine – one that is par-ticularly environmentally-friendly thanks to its Blue TEC technology – with a 155kW (2010cv) of horsepower and a maximum binary of 540 Nm – or with a powerful V8, 5.5 litre petrol engine, which packs 285 kW (388 cv) and gives a binary of 530 Nm. The iconic G-55 AMG model – only available in four-door station wagon version – has a V8 compressor engine, with 373 kW (507 cv) horsepower and an impressive 700 Nm maxi-mum binary.

CrossCountry Icon After 33 years in production, the Mercedes-Benz G-Class remains unrivalled. That was the opinion from readers of ‘Off Road’ magazine who, like the year before, trumpeted the G-Class as the cross-country car of 2012 in 2 categories. The G-Class easily scooped the award in the ‘Luxury Cross-Country’ category and defended its title in first place in the ‘Classic’ category.

The G-Class has been a permanent fixture in the Mercedes-Benz model range since 1979. Its exceptional place

as an icon among cross-country SUV vehicles is owed to continued and systematic develop-ments brought to fruition by the car manufac-turing giant over more than 3 decades. That’s why the latest generation of G-Class is an impressive combination of cutting-edge tech-nology, high quality – it has premium leather upholstery - and detailed interior design. At the same time it maintains the highly-prized characteristics which define this model, such as solidity and an impressive capacity for road holding.

This star of cross-country SUV vehicles uses high-performance technology, as well as dy-namic driving systems so as to provide a fan-tastic driving experience both on and off the road. The series all boast Permanent Integral Traction, a 4-wheel Electronic Traction System (4ETS), and 3 lockable differentials which can be sequence activated (centre, rear and front) via the legendary individual controls on the dashboard. The G-Class has been showered with awards to join the already numerous prizes picked up by this legendary Mercedes-Benz vehicle, reinforcing the G-Class as one of the most popular award-winning off-road cars.

Mercedes G-Class

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TO REGISTER PLEASE GO TO: WWW.ICSC.ORG/2012EU

ICSC European Partners

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Is Big Beautiful?

· Find out how “Big” the investment ambitions, retailer strategies and development goals of the industry are

· Network with leaders of the Retail Real Estate Industry

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Gerard Groener, CEO, Corio NV, The Netherlands

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John Scott, Head of International Business Development, Debenhams, UK

18-20 April 2012InterContinental Hotel, Berlin, Germany

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New for 2012! Reduced rates for NEXT GENERATION €450

“Even in Europe networking behaviour can be different depending on the culture, although these don’t show up in all cultures,” says Valter Barreira, who suggests the following recom-mendations for networking around the world.• Study types of networks in the culture - there really are different ways of building relation-ships in different cultures. It could be a more closed network, like in China (Guanxi) or more open as in the United States. Avoid mak-ing assumptions that could prove barriers in building your business relationships.

• Start early - it could take months to meet the right people, contact them and get feedback.

• Clearly define what you want – will your de-sires be interpreted as offensive and unaccept-able or reasonable and professional?

• Use resources – associations you belong to and alumni groups and those with common backgrounds and interests create networking contacts.

• Be out there – teach, talk and write.

• Create reciprocal relationships - if you feel you are giving more than you receive in your networking relationships, don’t panic! You’re still on the right path.

• Use the Internet – without losing focus on what’s important. In an MIT study those with a network of digital contacts were 7% more pro-

Ain’t no mountain high enough!Improving your global networking skills

This basic rule can open the door to a potential network of more than 6 million people. It works like this: If you know 50 people, and each one of them knows 50 other people, you’ve got 2,500 potential business contacts that know your personal business contacts.

And if each of these potential contacts knows 50 people, that means 125,000 contacts from the contacts of your personal business partners. And that can extend to 6,250,000 people - and that’s a conservative estimate!

This infinite world of resources is within the reach of competent global networkers who can build a good network of contacts.

But are there are different ways of network-ing in the world? According to Valter Barreira there are specific styles of building relation-ships based on confidence (networking) in different countries. “The Chinese have a system called ‘Guanxi’, while in Arab countries it’s called ‘Wasta’, and both of these have specific and different characteristics from western methods of networking,” he says.

Valter Barreira says that relationships in the western markets are fairly transactional (the goal of the contract is to close the deal). In China and the Arab countries the relationship comes first and can take a lot of time to foster and nurture. Once the relationship has been established and developed, confidence is built up and business can follow.

VALTER ALCOFORADO BARREIRA | Executive Director KNOWING COUNTS

ductive but those with a cohesive face-to-face contact strategy were 30% more productive.

• Get the most out of international events – what you get out depends on the tactics employed in maximising your individual interactions.

• Use national resources – i.e. government export trade offices like AICEP.

• Timings – In Arab countries arrive early, be prepared to stay late and socialise; you may have to make various visits and have more than one meeting . ‘Quick’ may not work here.

• Know the power networks – knowing how things work in a country and who is important and knows who is a vital advantage.

• Find common ground - and don’t mention the countless cultural, social or political differ-ences.

• Simple rituals are important - respect traditions, protocol, formalities, and types of treatment (names, titles, etc), dress codes and conversation topics to be encouraged and avoided.

“Global networking opportunities are real and massive. It is up to executives and business professionals to find out the best way of doing business in each country. The benefits can be enormous,” concludes Valter Barreira.

You can have contacts around the world. Because someone that you want to reach in the world, might know someone that you know says Valter Alcoforado Barreira of Knowing Counts – Networking Know-How

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customers have the benefits of the latest technology but expensive amenities like swimming pools and spas have gone, to leave pure fitness facilities.

“We did away with the reception because it was perceived as a barrier, but we have helpful teams of staff,” says Nick Coutts who explains that the gym has focused on group fitness exercises which the Portuguese go in for.

In fact our prices are higher than the most cheap budget model clubs operating in some other countries, although prices are 50-80% higher than most cheap budget model clubs operating in some other countries, we are

Since the first premium budget fitness club opened in October, the fitness hut concept has proved so successful that further clubs are set to open in Porto and Cascais.

After bringing the Holmes Place brand to Portugal 15 years, its former CEO, Nick Coutts, saw a gap in the market for a more streamlined, no-frills fitness club that of-fered customers more flexibility and value-for-money while still providing all the very latest equipment and support. “I wanted a new brand that was right for the Portuguese market and the current eco-nomic times,” says Nick Coutts, who adds that he took a look in the European market in Germany, Holland and the United King-dom which are “more advanced” markets in terms of the fitness industry.Fitness Hut has adapted the pure low-cost model into a premium brand, which means


Focused on Fitness

still 50-80% cheaper than existing traditional clubs in Portugal.“We can offer lower prices because of the things we don’t offer: we have not made big investments in swimming pools which look nice in the brochure but are costly to maintain and aren’t used by a high percentage of customers,” he explains.

Focusing on the core, which means fitness, the gym has the latest equipment, group fitness classes, films, cardio theatre, good CCTV coverage and vending machines selling everything from towels and essential toiletries to pad locks and energy drinks.“In the gym itself we’ve got the Gym Service Team who are not personal trainers but are there to help and provide a backup service. They also run hourly short free classes for abdominal workouts and functional train-ing,” says Nick Coutts.

The club concept is more stripped down and urban without being overly masculine.The club has also changed it personal trainer model which works well for trainers who know how to run their operations like a private business. “We have 24 of them, each paying a fee per month but they work largely independently, make their own ar-rangements with customers and define the objectives,” he adds.

Committed to technology, Fitness Hut has a slogan ‘FIT’ which stands for “Fitness”, “Inovation” & “Transparency”.

“Basically we offer fitness which means we’re not going to open shops or branch out into beauty and spas. What we state is what you get; we say what we are and offer and deliver exactly that,” Nick Coutts concludes.

NICK COUTTS | Proprietor • AMÂNCIO SANTOS, Amoreiras Club Manager, FITNESS HUT

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