Investing in Lisbon & thePortuguese Real Estate Market

Agenda

Stone Capital

Economic Setting

Real Estate Market

Investor Incentives

Investment Opportunities

LAY THEFOUNDATIONSTONETOGETHER

Stone Capital

• Founded in 2011 by two partners with experience in management & real estate

• Award-winning developer renovating prime assets in Lisbon’s city centre

• Focused on top-end residential & commercial projects

• Proven Track-record

• 9 on going projects totalling 100M€ in investment

• Backed by established international family offices

Stone Capital

Example of finished project: Liberdade 240

• Full renovation

• 5000m2 of retail & office space

• Prime location (Avenida da Liberdade)

• 2 years from acquisition to completion

• 8M€ investment

• Winner of the 2014 real estate “Oscars” for renovation

• Cartier’s flagship store in Portugal

• Stone Capital headquarters

Agenda

Stone Capital

Economic Setting

Real Estate Market

Investor Incentives

Investment Opportunities

Fontes: IGCP, Reuters Ecowin, Bloomberg.

Yields on Portuguese public debt in the secondary market (%) Interest on short-term debt auctions (Treasury Bills),%

Information until April 10th 2015

0

2

4

6

8

10

12

14

16

18

20

22

Jan. 2010 Oct. 2010 Jul. 2011 Apr. 2012 Jan. 2013 Oct. 2013 Jul. 2014

10Y

2Y

35

2.93

0.55

%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

15 Feb. 2012 17 Oct. 2012 19 Jun. 2013 19 Feb. 2014 17 Sep. 2014

3 Month

6 Month

12 Month

18 Month

0.24%

0.23%

2.29%

0.05%

9 Month

0.49%

Mar. 2015

1,63

0,015

The downward trend in the government debt interest rates reflects improvement in the international perception

Economic Setting

Source: European Comission, European Economic Forecast Autumn 2014

2013 2014 2015 2016

-2-1.5

-1-0.5

00.5

11.5

2

Growth GNP (%)

2013 2014 2015 201602468

1012141618

Unemployment rate (%)

2013 2014 2015 2016

-2-1012345

Inflation (%)

2013 2014 2015 2016

-6

-5

-4

-3

-2

-1

0

Public debt (% of GNP)

The downward trend in the government debt interest rates reflects improvement in the international perception over Portugal’s economy

Economic Setting

Agenda

Stone Capital Keynote

Economic Setting

Real Estate Market

Investor Incentives

Investment Opportunities

A privileged location within Europe

Real Estate Market

• Main European cities in less than a few hours flight time

• 12 direct destinations to Brazil

• Strong ties to Southeast Asia, Africa & America

Why choose Portugal to invest in Real Estate?

Real Estate Market

“When Spain and Portugal emerge from recession, we believe that they could become a target for a new wave of Latin American investment.”

Knight Frank

“As we move into a more normalized global economy, property investors will be looking for development opportunities beyond the big international gateway cities.”

Knight Frank

“The house price boom that swept through most of Europe and the developed world from the mid-1990s to 2006 missed Portugal.”

globalpropertyguide.com

“At present, the market in Portugal offers favorable conditions for first-time investors with a long-term strategy.”

Deka Immobilien GmbH

Compared to other European countries, housing prices have remained stable

Real Estate Market

Source: ECB, Bloomberg, Confidencial Imobiliário, Ministerio de Fomento (Spain), Research.

Housing price index, 1998=100

100

120

140

160

180

200

220

240

260

200020012002200320042005200620072008200920102011201220132014

Spain

Ireland

Euro Area

Portugal

Lisbon is one of the most competitive European cities regarding housing costs...

Real Estate Market

Source: www.numbeo.com/property-investment/compare_cities

Price per sqm2 in the city center (residential) (EUR thousand / sqm2)

Londre

sParis

RomaM

ilão

Estoco

lmo

Amsterd

ão

Madrid

Barcelona

Dublin

Berlim

Bruxe

las

Lisboa

Atenas0

2000

4000

6000

8000

10000

12000

14000

DublinLis

boa

Bruxe

las

Amsterd

ão

Barcelo

na

Madrid

Berlin

Athenas

Londres Pari

sMilã

o

Estoco

lmo

Roma0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Fontes: www.numbeo.com/property-investment/compare_cities 04/2015

Real Estate Market

Rate of return on income (Residential, City Centre) (%)

... and with almost the best rental returns

Tourism

Source: AICEP, World Economic Forum, Research.

o Climate & hospitalityo Safety & political stabilityo Cultural diversityo Accesso Gastronomyo Golf courseso Health system & infrastructureso Educational system

Best city to invest in a 2nd home – The Times 2015

Best Country to Travel, 2013 - Condenast

Lisbon: Europe's best city break – Travel Award

CNN Travel - best destination 2015

10th safest country in the world

12th country with best health care

7th country that best welcomes tourists

Lisbon 7th best retail therapy city in Europe

World’s Leading Golf Destination 2013

10 hotels in Leading Hotels of the World

Ranking evidenceDistinguished assets

Real Estate Market

15% tourism growth in Lisbon from 2013 to 2014Increased tourism underpins property values & rental demand

Trends

Real estate transactions by foreigners:

• Represent 25% of all transactions

• Doubled between 1st & 2nd quarter of 2014

Data up to the 3rd quarter 2014 confirms the rise of sales from foreign investors

PortugueseForeign

1st Qrt2nd Qrt

3rd Qrt

57,700

17,300

3,500 6,540 7,260

Sources: APEMIP, NB Research – Sectoral Research.

Portugal, real estate transactions, domestic investors vs. foreign, Jan-Sep 2014

Property Costs

o Property acquisition costs

o 4-6% of property purchase price

o Tax exemption for historical renovations (for residency)

IMT

o 0.8% of property value

Stamp duty

o ~ €800 Registry

o €2.500 Solicitors fee

Registry/Notary

o City tax on property

o Annual payment on registry value of the property (0.3% - 0.5%)

o 5 years exemption for historical renovation

IMI

o Cost sharing to maintenance & costs of common area

o ~€1/m2/monthly

Condominium costs

o Income tax for individual or entities

o Normal tax: 28%

o Resident non habitual: 15%

Income Tax

o 25% of difference between acquisition price (minus expenses) and the resale value

Capital Gain Tax

Acquisition ResaleRunning costs

o 0% Inheritance Tax

Inheritance Tax

PROPERTY SPECIFICATIONS:

Developer guaranty of 5 years on interior finishes

Developer guaranty of 10 years on structural finishes

All equipped kitchen & finished fittings

Agenda

Stone Capital Keynote

Economic Setting

Real Estate Market

Investor Incentives

Investment Opportunities

Simplification of law allowing landlord to enforce their rights

Landlords & Tenants Law

Long term

• Law passed in 2012 in favour of landlords – (Balcão Nacional do Arrendamento)

• 2 to 3 months to evict a non paying tenant vs. 2 years

• Tenants 15 days to reply – Court 30 days to decide

• Costs: 51 Euro court fee + 1000 Euro lawyer’s fee

Short term

• Short terms rental agencies adapting to AirBnB trend (i.e. short term contracts)

Attracting property investors for buy to let & renovation opportunities

Fast track to obtain a valid residency permit in Portugal & a European passport

Golden Visa

o Temporary permit to reside in Portugal

o Potential grant of Portuguese citizenship after 6 years

o Same rights as Portuguese citizens (work, education, health)

What?

o Non-EU citizens that:o Develop an investment

activity in Portugal for a minimum of 5 years

Who?

o Minimum stay of 7 days during the first year and 14 (fourteen) days during each subsequent period of two years

3 options: o Invest €500K + in a property

or

o Invest €1M in equity

or

o Create 10 jobs

How

Attracting non-European investors seeking a permit to reside & travel in the EU

Golden Visa

Apply(Valid for 1 years)

Renew(Valid for 2 years)

Renew(Valid for 2 years)

Apply(Valid for 5 years) Passport

Temporary Resident Permit4 months to obtain

Permanent Resident2 months to obtain

Apply for citizenship3 months to obtain

Year 0 Year 1 Year 3 Year 5 Year 6

5 years golden visa + 1 year permanent residency Citizenship

Fast track to obtain a valid residency permit in Portugal & European passport

Favourable taxation scheme for professionals with high added-value activities and individuals with significant income

Tax regime for non-habitual residents

o Qualify as tax resident in Portugal (minimum stay >183 days or be a homeowner)

o Not having been a resident in Portugal for the last 5 years

o Taxation applies to income derived from high added value activities (liberal profession, artistic or scientific activity, management, investment)

Requirements

o Taxation related to IRS (personal income tax) on labour income in Portugal is at a fixed rate of 20% - 15% on rental income

o No double taxation for pensions or for employment & self-employment income generated abroad (dividends, interest, capital gains)

o Tax exemption on donation & inheritance

o Taxation related to IRS as a non-habitual resident for a consecutive 10-year period

Advantages

Option to finance the acquisition of real estate by non-residents

Financing

• Caixa Geral de Depositos, a leading bank in Portugal

• Partnership between Stone & the bank

• Financing protocols for non-resident clients

• Financing up to 70% of the property value

• Terms up to 25 years

• Interest rates from 2.0% per year

• Personalized fast-tracked treatment and dedicated account manager

Agenda

Stone Capital Keynote

Economic Setting

Real Estate Market

Investor Incentives

Investment Opportunities

Cordon 31 Chiado, LisboaGlamour & Elegance

Located in the most chic neighbourhood of the city, where culture, history, fashion & retail meet 10 exceptional apartments with traditional charm with high-quality finishing, private parking

4 bedroom apartments with areas between 111m2 - 213m2

Unparalleled views of the Tagus River from the upper floors

Rosemary 22 Chiado, LisbonLisbon´s cultural heart

14 superb apartments bathed in natural light and located in the heart of Lisbon

3 façades of century old building, facing the Tagus river

1-3 bedroom apartments, as well as 3 bedrooms duplex units with areas between 68 & 195 sqm2

Liberdade 238, LisboaLisbon’s most iconic avenue

Located on the prestigious Avenida da Liberdade, the most coveted boulevard in Lisbon

24 exclusive apartmentswith amazing city views

4 bedroomapartments with areas between 80m2 – 280m2

2 stores on the ground floor with a total area of 800 sqm2

On Lisbon’s most known avenue, within minutes from all areas

10 apartments between 55m2 - 122m2

1-3 bedroom apartments with open views, facing the sunset & iconic Lisbon buildings

Restauradores 72Prestigious address & architecture

Grande Hotel, Monte EstorilAir, light & water

Amazingly located in elegant & renowned Estoril, 20 minutes away from Lisbon

Open air architecture facing the sea in an authentic building

11 apartments with panoramic view over the ocean

T3 & T4 with area between 180m2 - 280m2

Amouraria, LisbonHidden jewel

Located in the heart of one of the oldest & most authentic neighbourhoods

30 superb apartmentswith a large garden, swimming pool, spa & parking

1-3 bedroomapartments with areas between 50 - 150 sqm2

Breath taking views overlooking St. George’s Castle and the city

São Vicente 44Tradition & Elegance

A traditional area & period building situated near charming landmark of the city

Situated in the most picturesque “Bairro” of Lisbon

9 apartments, some with sea views and sizes between 43m2 & 86m2

Excellent expositions & lots of natural light

Bacalhoeiros 99An exclusive experience

A vibrant area, between the river & the

city

A building respecting traditional

architecture, covered in Portuguese

Azuleiros (tiles)

28 apartments ranging from 43m2 &

142m2

1-3 beds with views of the river

gardens opposite

Contacts

Unit 11, Elysium Gate126-128 New Kings RoadSW6 4LZ London

+44(0) 20 7471 4500

more@athenaadvisors.co.uk

athenaadvisors.co.uk

The information contained in this document is the property of Athena Advisors and may not be reproduced or used unless authorised to do so in writing. Contact more@athenaadvisors.co.uk for further information.