Nº 1 Partners in Business Magazine

Issue Nº 1 ::

March 2012

Globalisation

• A Return to Growth • Going global • Turning the page • The ‘S’ word • Optimistic on Investment • Internationally Successful |1

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Leading the way through local expertise.

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INDEX

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

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a passion for solutions.

2 | Globalisation

MANAGING DIRECTOR | Luis Figueiredo Trindade • lft@partnersinbusiness.info COMMERCIAL DIRECTOR | Emi da Silva • emi@partnersinbusiness.info EDITOR | Chris Graeme • chris@partnersinbusiness.info ART & VISUAL DESIGN | André Freire • andre@partnersinbusiness.info David Martins • david@partnersinbusiness.info JOURNALIST | Sandy Guedes de Queiroz • sandy@partnersinbusiness.info SPECIAL CONTRIBUTOR | David Sampson • davidsampson@partnersinbusiness.info OPINIONS | Miguel Marques dos Santos • Valter Alcoforado Barreira • Victoria Fernandes PHOTOGRAPHY | Chris Graeme • Jorge Correia

Reproduction of material in this magazine in any form is prohibited without prior written permission from Partners in Business team.

The view expressed in this magazine is not necessarily those of the publisher. |3

[

EDITOR IAL

]

Here’s to Internationalisation!

T

LUIS FIGUEIREDO TRINDADE | Director, PARTNERS IN BUSINESS

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.

he truth is that the troika’s austerity measures have reduced internal consumption indices to a minimum and provoked economic stagnation. 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 internationalisation. 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 construction 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 effectiveness 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.

We deliver world-class advice for owners and occupiers of real estate Established in Portugal since 1991, Cushman & Wakefield is the premier real estate consultancy firm in Lisbon.

We assist leading local and international companies with all their property needs – from lettings and sales to structured finance, and from valuations to project management and consultancy services.

Let us help you aligning your property needs with your business plan.

Tel.: (351) 213 224 757 or www.cushmanwakefield.pt 4 | Globalisation

|5

s Report

h t w o r G y h

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.

W 6 | Globalisation

l i W

For Carlos Moedas the crisis is an opportunity 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 current 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 adaptability 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.

n r te u R 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 privatization 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 reality of doing business in Portugal “The most salient aspect of the current difficulties is the resilience and resolve demonstrated 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 competitiveness 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 Portugal. 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.

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 restrictions that make no sense. The last government 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.

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 governThe structural reforms he lists are a new ment’s reforms will make a difference. But competition law, acceleration of the transposition of the EU services directive, “which in truth I don’t. Of course I recognise that the government is trying hard. I agree with will reduce long-standing barriers to an the cancellation of some feriados and a open economy, and a new insolvency code reduction in the weight of the state sector focused on restructuring viable companies and bringing insolvent ones to a rapid end”. 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 In the public sector the government is restructuring its state-owned enterprises and position is improving but will it be different eliminating redundant services and manage- this time round? Will Portugal work better in the future? ment positions. It has merged the different agencies in charge of tax collection to save resources and improve tax collection. It has Most of the discussion about the economy in the press or the divergent opinions of got an agreement with the trade unions famous economists about whether to inon some labor-market reform: indemnities for dismissal will be brought down and the crease borrowings do not help to answer this question. In practice it will make little or process itself will be simplified. There will be a reduction in vacation days and holidays no difference whether Portugal has to have a second bail out package. This depends on to help generate more competitive unitcircumstances outside the government’s con- CARLOS MOEDAS | labor costs. He claims that this agreement represents “an important milestone for our trol, as does the country’s prospective return Secretary of State to the Prime Minister to capital markets in 2013. country”.

|7

s Report

The

€uro:

What went wrong?

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 Eurobonds backed by all the EU governments.

Too much private debt

No 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 investment 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 meantime the banks will not sell and they cannot refinance new purchasers, which leaves the markets paralysed and properties going to ruin.

Changing attitudes

Perhaps 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 8 | Globalisation

“The roots of its travails now, or at least some of them, lie outside Europe: the buildup of massive, footloose investment capital by fastgrowing developing nations like China; tightened 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 dashing 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 vulnerable 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.

of financial overhaul for which they were almost 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 polarisation, and built-in financial imbalances, beset by a perpetual penumbra of hope and pain.

LOOKING FOR THE RIGHT RETURN?

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 dominance of newly reunited Germany. Needless to say, none of these predictions have borne out; Germany, for instance, is more dominant The Euro’s advantages were meant to be selfin Europe than ever. Never before had the fulfilling; success would feed on itself. Yet as a creation of a new monetary device been so result of the defects revealed in 2009-2010, Eu- replete with anticipation and hype; it was alropean countries have had to embark, within a most inevitable that, under the weight of these period of just two years, on a massive program expectations, the Euro would buckle.”

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 allowed for in government deficit forecasts.

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.

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 having 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 contributions. 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

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 policies of the current government will be maintained by the next one. The main shareholders 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.

Look no further than stand R31.13 at MIPIM 2012, or call us today: t: 00351 21 311 44 00. www.cbre.pt

So Carlos, keep on trying. I so hope that you are successful and that life for all of us improves. |9

Returning to Exports

Business Interview

Interview | Chris Graeme

Pedro 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.

” 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 PEDRO REIS | President, AICEP

10 | Globalisation

”

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 countries 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 Pedro Reis has certainly got his work cut Foreign Direct Investment and this can only out for him fronting a government agency be done by making Portugal an attractive which arguably has now almost assumed the relocation market for foreign companies by status of a ministry. structurally reforming its judicial, labour, tax and bureaucracy systems. Here too PorIn an increasingly globalised world, where tugal is making strident efforts. competitiveness and productivity are vital, and against the backdrop of the worst eco- Pedro Reis admits that all markets are nomic downturn in living memory, his job important for Portuguese companies and at the helm of AICEP (Portugal’s Foreign AICEP needs to be working on the ground Commerce and Investment Agency) is alongside them wherever they are in the perhaps the most challenging and important world. But now the focus has to be on of them all. exporting goods and services outside the European Community to other countries Because unless Portugal’s companies sucthat already account for 27.6% of total exceed in finding new markets abroad and ports. Exports to non-community countries shifting from the internal market and the grew by 1.1% in 2011 compared to 2010, the comfort zone of the European Union, she largest yearly increase since 1996. will never catch up with her European partners, close her external balance of payment Looking worldwide, Portugal’s exports of deficit, or generate the income and wealth goods and services grew 13.3% last year to place the country on a firm economic in relation to 2010 and for the first time footing. overtook the €60 billion, benchmark, turning over €61,727 billion, or €7.260 billion And that’s where his agency comes in more than in 2010. This increase by 13.3% helping companies, the vast majority Small in the total value of exports contributed and Medium-sized Enterprises (SMEs) towards slashing the trade deficit (balnetwork and make contacts commercially, ance of payments deficit) by €6.036 billion. diplomatically and politically overseas; act- “The positive performance in our exports ing as a facilitator in helping the country’s of goods and services is a clear sign to the firms to export to new markets. international community that the Portuguese economy has the capacity to positively One step in this direction was placing the trade in foreign markets and is succeeding agency under the aegis of the Ministry of in confronting the current economic crisis,” Foreign Affairs (MNE) to reflect the new he says. direction of Portugal’s business-focused 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 Columbia 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 Portuguese 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 excellent relationships and will be the focus of renewed interest because of the possibilities opened up by the Arab Spring; and Sub-Saharan 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 commercial 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 strategic 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%. | 11

Business Feature

Feature | Chris Graeme

In 2011 Portuguese business suffered one of the worst economic years since the 1920s.

Despite the downturn, however, there are opportunities in the market, some modest signs of recovery and the rise of a new breed of investor.

Record unemployment running at 14%, a paralysed banking sector suffering €1.5 billion losses over Greek debt exposure, a construction 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 investment which fell to historic lows.

12 | Globalisation

2012 FERNANDO GUEDES DE OLIVEIRA |

ERIC VAN LEUVEN | Managing Partner, CUSHMAN & WAKEFIELD

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 organisations, better able to compete in a truly global economy.

and because they’ve focused on growth potential 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 reinforcing services offered to third parties as well as improving operational efficiency.

CEO, SONAE SIERRA

Of course while Portugal is largely responsible 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 international presence in the retail property and management services sectors have weathered the storm best, partly because of their expertise and ability to diversify within their areas,

Sonae Sierra’s main strategy stands are internationalisation, 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-

t n i o P g n i n Tu r g e d y a r T or 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 operational 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 Boulevard Londrina Shopping while continuing to improve operational efficiency in mature markets and seeking new investment opportunities, 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 investments 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 transactions. 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 discounting 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

PEDRO SEABRA | President, CBRE

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 management, 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.

“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 explains, 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 improvements, with a new type of investor in Portugal. The traditional investors of the past

“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- PAULO SILVA | Managing Partner, AGUIRRE NEWMAN house users can take advantage of excellent commercial conditions in the market. | 13

Business Feature

In a constantly changing market we know where to find the best investment opportunities

JORGE BOTA | Managing Partner, B PRIME

such as German open funds have completely withdrawn from our market, but there is some activity from new sectors such as national 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.

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 pressure 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 JOSÉ FORTUNATO | CEO, MSF positivity which B.Prime and its team has always been associated with. 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 restrictions have impacted on the residential and tourism development sectors too in a year Real estate consultancy Aguirre Newman which was marked by great difficulties in enjoyed an increase in its turnover levels selling property, lending restrictions to final and results that countered an overall fall in clients and developers, higher financing costs activity indicators which affected the real for projects that did get the green light, the estate market across the board. Transacinsolvency of low-quality projects and even tional areas (investment and agency) did not good projects whose capital structure was not manage to buck the downward trend seen in PEDRO RUTKOWSKI | CEO, WORX sufficiently solid. There were also reductions their respective markets, despite suffering, in prices by proprietors in order to make by some degrees, less of a slump in business deals, an increase in demand for property to than experienced in its markets. “We’re not rent and scores of estate agents going out of expecting a change in the downward trend in business. But according to José Fortunato, activity in the segments that make up the real According to Pedro Rutowski, CEO of Worx chief executive of real estate developer MSF. estate market. We hope that the low prices TUR.IM, there were good opportunities to being applied will attract clients looking for real estate consultants, 2012 will be similar to be found in 2011 which wasn’t such a bad premises and enable the expected reduction 2011 and not a recovery year but one of con- year for the tourism sector. solidation. “The levels of activity will be fairly in activity resulting from the fall in GDP, modest and the lack of new buildings coming “Less demand in the second home segment which will be more than 3%, to be counfrom national and international markets and onto the market will contribute towards tered,” says Paulo Silva, managing director. the difficulty for clients in getting credit has unstable demand,” he says, adding that the company will offer consultancy and support influenced the development of new projects Jorge Bota, managing partner of real estate services to third parties as well as setting up and extended schedules”, he says, adding consultants B Prime, also agrees that 2012 that the company remains positive about 14 | Globalisation

In a changing market it is important to see the bigger picture.

At Jones Lang LaSalle we do just that. Our investment team constantly analyses and interprets the changes in local and global markets to guarantee that we provide our clients with the best investment opportunities, whatever the market conditions.

Integrated into a global platform, we combine our local knowledge with the experience of a vast European team made up of the most highly renowned specialists in real estate investment and corporate finance.

SALE AND PURCHASE OF REAL ESTATE ASSETS IN THE RETAIL, OFFICE AND LOGISTIC SECTORS

Walter Fábrega walter.fabrega@eu.jll.com Tel: + 351 213 583 222

www.joneslanglasalle.pt

| 15

Business Feature

JOAQUIM MEIRELES | Board Member, FUNDBOX

LURDES MARTINS | Retail Director, NEINVER

STUART ROUGH | Chairman, BROADWAY MALYAN

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 focus on controlling costs while maintaining quality projects and service provision.

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

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 But while urban rehabilitation and renoof its ability to offer premium brands at vation provides good opportunities for knockdown prices, is the outlet segment. investors within Portugal, where does that Neinver, the second largest outlets operator Another organisation investing in the refur- leave top architect ateliers known for their in Europe, says it enjoyed a good year in bishment and rehabilitation market is the cutting-edge designs in retail, office and 2011 both in Portugal and abroad, registerreal estate investment fund entity Fundbox. residential areas. One answer is, and for ing strong increases in visitor numbers and Joaquim Meireles, Fundbox board member, some time has been, expansion abroad. sales at all its centres. “Neinver’s strategy says that the difficult economic climate has Take Broadway Malyan for example. It had is to diversify and enter new markets as demanded new ways of thinking and other, a good year in 2011 largely because it had a strategic partners,” says Neinver commore adaptable business models, particular- been busy in other countries with offices mercial director Lurdes Martins who says ly in rehabilitation. These models, he says, in São Paulo, Brazil, Istanbul, Turkey and that 8% of its assets are located in Portugal. should be based on long term partnerships Bombay, India, all emerging and expand“Thanks to our vast experience in different with new and existing players in the market ing tiger economies. “Broadway Malyan European markets, we intend to continue (clients, suppliers, investors, etc.) looking at has pursued internationalisation goals and to consolidate our position of leadership by quality and differentiation as well as finding has grown by successfully expanding its opening new centres in markets where we ways around finance restrictions. network of international offices in emergare already operating, like Portugal, as well ing markets,” says Stuart Rough, chairman as entering new and promising markets like “It’s in periods of great difficulty that we of Broadway Malyan who, with board direc- France and Germany,” she says. With plans discover our capacity to develop more tor Margarida Caldeira, runs the Lisbon to develop 160,000m² of outlets over the creative and effective solutions, especially office and says the international company next three years, Neinver hopes to expand those focusing on rehabilitation and the is looking to open up new offices in 2012. its operations in Portugal following the urban rental market,” he says, pointing to The company has clients in Asia and China, success of its The Style Outlets brand and is the need to replicate real estate investment two booming markets. “We’re planning to also looking to penetrate other Portuguesefund models in this area different cities increase our focus on projects in Africa, speaking markets like Brazil. and municipalities. Fundbox says it will through projects in Angola and Mozam16 | Globalisation

| 17

Partners News

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

CBRE and C&W place Chinese bank in Office 123 Multi Mall Management 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 building for ICBC while C&W represented the building’s proprietor. “In recent years ICBC has extended its network throughout 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 electricity 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.

18 | Globalisation

Shopping Centres attract 79 million visitors in Portugal 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.

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.

Present in Portugal since 1990, Multi Mall Management currently manages a portfolio of 13 shopping centres and an office park – Forum 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.

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.

New Rental Law and 6% VAT provide property renovation boost

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.

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 buildings 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.

The project follows the successful blueprint for Y Combinator 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.

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. | 19

A golden opportunity...

Whether for buying or renting,

Partners News

Personae Awards 2011

Con tACt no u

Wr lIm e ou s r oFF Ited sp er o eCIA BeA n eXClu l C ApA H CluB sIve rtm ent s.

Dunas Douradas is one of

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

Bairro Alto Hotel considered the Best Small Hotel in Europe

the most alluring Algarvean Resorts

Close your eyes. Listen. Hear the gentle breaking of the waves on the sandy shoreline. Feel the warmth of the sun flooding into your bedroom. Smell the ocean.

The Make-a-Wish foundation works tirelessly 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.

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 20 | Globalisation

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 AlgarveShopping, and is awarded specifically for supermarkets and hypermarkets, going to just one retailer at an international level.

The choice of winners took into consideration the good practices implemented by shop retailers in 2011 with regards to accident prevention. In addition to fire protection 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.

“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 MakeA-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 info@makeawish.pt or contact Mariana Tavares or Inês Seco on 213562082.

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

Quinta do Lago resorts.

Enjoy yourself in and around the clubhouse with its gym, indoor and outdoor pools, Restaurants, Bar and TV Lounge.

Whatever you do, do it all in complete comfort.

A few properties are still available for sale, should you not be able to resist after a

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.”

holiday with us!

The International Hotel Awards 2011, a part of the International 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.

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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’.

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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.

“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-AWish 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.

Welcome to your holiday home at Dunas Douradas Beach Club, a privileged beach-front location within the Golden Triangle of the Algarve, set amongst 32 hectares of pine forest and flanked by the lush green golf courses of theVale do Lobo and

Beginning to see the light

Business Interview

at the end of the tunnel Interview | Chris Graeme

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.

” 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 CARLOS LEIRIA PINTO | Branch Director, EUROHYPO

22 | Globalisation

”

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 contraction 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 products,” 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.

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 On the bright side Carlos Leiria Pinto be paid to urban rehabilitation, which is believes that there are signs of the “begin- already taking place in many Portuguese ning of a period of opportunity”. “Despite cities. “For that to happen, it is vitally expectations that prices in all real estate important that the rental law is reformed segments will continue to fall throughout and brought in line with those rental laws 2012, it’s beginning to be clear that there in other European countries which work are excellent opportunities for investin a more efficient way,” says Carlos Leiria ment in the market,” he says. “It’s worth Pinto. Expectations are running high with remembering that despite everything, well regards to the proposed law that is curchosen, conceived and professionally-exe- rently being debated in parliament and cuted real estate projects will continue to could come into force in the summer. “It be a safe option when compared to other contains the basis for a sweeping reform types of investment,” Carlos Leiria Pinto in this area and it remains to be seen adds, pointing out that in the short-term what form the final version will take and national investors will be more active, how far the law will work well in practice and only at a later date will international without lots of cases having to go to court, investors return to Portugal when levels of a situation whereby the new reform would uncertainty have significantly diminished. end up being useless,” he adds.

“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 longlasting change in paradigm with the rental market once again gaining ascendancy to the detriment of owning one’s own property,” explains Carlos Leiria Pinto.

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 countries 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 reasons why Eurohypo has a solid and longterm commitment to Portugal and will continue to finance sound, well-thought out projects in the Portuguese economy. | 23

Business Promo

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A New Lease of Life to Old Buildings SOMAFRE GROUP

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 headquarters of the Portuguese Industrial Association Foundation.

24 | Globalisation

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THE UNITED ARAB EMIRATES EMBASSY

PORTUGUESE INDUSTRIAL ASSOCIATION FOUNDATION

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, profound 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 materials. The façade was restored and maintained while the interior floors and spaces were opened up and modernised. The restoration and improvement 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.

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 courtyard, 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.

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The ‘S’ Word

Business Interview

Interview | Sandy Guedes de Queiroz

Pedro Seabra, president of CBRE talks about sustainability in real estate How have you as a player in the real estate market felt that sustainability has impacted the sector?

”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

”

PEDRO SEABRA | President, CBRE

26 | Globalisation

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 Sustainability is a big word and is of course sense of social responsibility, and I believe a fundamental concept – fundamental for this is the reality of most large multinational our future and the future of generations to companies. This is undoubtedly a growing come – but we use it in all sorts of ways to trend and many international investors do talk about a wide variety of subjects. In real seek buildings with a high energy rating, estate, sustainability is usually associated and EU directives also play an increasingly with energy efficiency, but energy efficiency important role in ensuring energy efficiency itself is also associated with innumerous measures are implemented and maintained. factors that can range from sustainability However, I do think much more can be in master planning and how where people done to encourage greater involvement in live determines how they get around, to this area, namely in terms of creating tax the economic and financial sustainability incentives for those who apply sustainof projects and businesses. I say this to ilable measures. There’s been much talk of lustrate that sustainability is everywhere and exemption of the IMT or IMI property taxes can mean any numbers of things. in these cases, but so far nothing has been done.

I have to ask where was the concern for sustainability in the last decade when people What about in other markets? were promoting real estate projects based on excessive financing and a hope that sales In the residential market, although the cost of electricity is subsidised by the governwould fully cover the financial flows and ment, the recent increases in energy costs ensure projects reached completion. Then and the anticipation that these costs will when a change in the economic scenario continue to grow will most likely bring brought about a change in buyers’ desire about a greater concern in energy efficiency and capacity to purchase, it revealed the if families believe it will make a difference gross lack of economic and financial sustainability of those projects and caused tur- in their pockets. I don’t think that up until moil in the entire market. So now we have a now it has been a determining factor in real country riddled with half-finished projects estate prices or the purchase decision, but I do think it is a growing concern that will that have been abandoned by companies gain importance over the next decade as enthat were unsustainable and many others ergy costs continue to rise. Energy efficiency that were forced to close. is also gaining relevance in the hotel market, and it has been an extremely important As for energy efficiency and certification and whether that has affected the real estate factor in the retail market, namely shopping centres, for a number of years. market, I think it could exert more influence but it is without doubt a growing concern. But again, here we have to be more Do you think the revised specific because the importance of sustain- Rental Law will bring ability varies greatly from market to market. about growth in investment in the

ing, so rehabilitation becomes not only a business alternative, but it is also a fundamental 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 residential real estate, but it’s still not enough.

One of the fundamental changes that must accompany the new rental law is in the judicial 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 resolved, 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 attractive.

Basically, the most important change that this law will bring about is to reduce the power tenants have over a property that rental market? does not belong to them, and that has Is there a demand by large national This new law is an extremely important re- enabled them to take advantage of landlords or multinational companies for form, especially in terms of developing and for years. That shift in the landlord-tenant sustainable office buildings or is this improving urban rehabilitation, a topic that relationship alone should be enough to for the moment is still very incipient in Por- stimulate transactions and breathe new life still a distant reality?

There is definitely a growing demand among tugal but which I believe will become crucial into the residential market, which of course is positive, but ultimately the ideal for a large multinational companies for buildings over the next decade. At the moment it is highly unlikely that new building can take developer or investor is to sell a property for that are energy efficient and eco-friendly, place due to the difficulties developers and a profit, eventually to an investor that will and those investors are willing to pay the contractors are facing in obtaining financrent it out. necessary price. CBRE is a carbon zero | 27

Business Interview

Filmmaker Isabel Coixet presents exhibition at the

Roca Lisboa Gallery Interview | Chris Graeme

The international award-winning Catalan filmmaker Isabel Coixet opens the exhibition ‘Aral – The Lost Sea’ with her moving 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%.

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 A moving documentary created by the of life just disappeared,” she said, adding that award-winning Catalan filmmaker, Isabel she doesn’t get involved with just any private Coixet, ‘Aral – The Lost Sea’ (O Mar Perdido) organizations unless she feels they really do tells the faithful and poignant story about one care about a specific issue and have a proven of the world’s greatest ecological disasters, track record to prove it. created when the then Soviet Union decided “We went twice, and although I had already to divert the rivers feeding into the lake in been in several African countries and the order to irrigate cotton fields. The sea largely former Yugoslavia during the conflicts, I had dried up, destroying the once thriving fishing never seen anything that touched me quite and tourism industries along its banks. like this,” she says.

“With this initiative, which we’ve developed in “I had been collecting magazines clippings with the We Are Water foundaabout the disaster for years after I heard about partnership tion, Roca aims draw public attention to this sea in Central Asia that was disappearing one of the worsttoecological disasters ever,” says because it upset me,” says Isabel, who asked Roca managing director Jorge Vieira. the question, “how can man allow an entire The exhibition, designed by Makoto Fukuda, sea to just disappear?” which features haunting photography from When Roca’s We Are Water foundation apJordi Azategui, is open to groups of five proached the filmmaker - her recent works to 20 persons with free guided tours from include Listening to the Judge (2010), about Mondays-Fridays hourly from 11am to 4pm the Spanish judge Baltasar Garzón’s struggle until April 28th at the Roca Lisboa Gallery, against corruption and terrorism - asking her Restauradores, Lisbon. For further informaif she wanted to do a film, she suggested the tion contact the reception or visit Aral Sea and asked if she could go there. www.rocalisboagallery.com .

> 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 28 | Globalisation

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Optimistic on Investment

Business Interview

Interview | Chris Graeme

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,” admits 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.

”It’s a whole different range of people now, a

lot of private equity and family offices which are buying income-generating real estate.

”

ERIC VAN LEUVEN | Managing Partner, CUSHMAN & WAKEFIELD

30 | Globalisation

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 motoring, 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 subsidise tenants. Any changes are welcome, and obviously the reform of the rental law is very positive,” agrees Eric van Leuven.

OFFICES

For 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 bodies and utility companies to relocate. There had been a very ambitious programme for RETAIL a Portugal Telecom city, while EDP will be Eric van Leuven believes that high street relocating, but they are building their own interest will continue now that the shopping premises” he points out. centre sector is mature. “I have always been a great promoter of high streets, although for 20 The big issue for Eric van Leuven is the tax years we thought there was more money to be situation. It’s VAT on commercial property and the rules surrounding that are problemmade in shopping centres. You only have to look at the great weather we have in Portugal atic, according to Eric van Leuven. The rule of to understand that the whole environment of thumb is there is no VAT on real estate. That high street shopping is much more pleasant,” means that the developer builds the building and carries the cost of the VAT on construche adds. tion, on fees for architects and agents. A The problem is finding the right sized site in developer can elect to not be exempt for VAT, prime locations. “If you look at Rua Augusta, which means that at the end of the developwhich used to be the prime shopping street in ment process he gets the VAT back that he’s Portugal, the shops and the buildings are too paid to the contractors and service providsmall and that’s a problem for many retailers. ers provided that the future tenants of the What we’re seeing is a shift, with prime retail building are VAT liable. A simple principle. coming to Avenida da Liberdade and Chiado But because some operators found loopholes and moving away from the Baixa where you to get a VAT refund while not collecting just can’t find the right size and configuration,” 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 because 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 sluggish, 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 upgrading 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 business which is really flying,” he concludes. | 31

Business Report

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Business Networking Event International Business PHOTOS | Chris Graeme

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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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 MARTA LEOTE | Director of Research and Consulting, CUSHMAN & WAKEFIELD • NATERCIA PEIXOTO | Tourism Consultant, CPU RAFAEL RODRIGUES, Commercial Director, MOLDURAS ARTE & DECORAÇÃO • NUNO JOSÉ RIBEIRO, Lawyer ERIC VAN LEUVEN, Managing Partner, CUSHMAN & WAKEFIELD • RUI RAMOS PINTO COELHO | Executive Director, INVEST LISBOA NUNO MARTINS | Marketing Director, DARK MANTICORE SYSTEMS & BUSINESS • LUÍS CAMPOS | CEO, DARK MANTICORE SYSTEMS & BUSINESS JOSÉ ALMEIDA SANTOS | Business Consultant, CONSULNEGE • JORGE FONTAÍNHAS | Electrical Engineer, CELPAPEL CRISTINA MOURA | Managing Director, BUTTERFLY COACHING • ANDRÉ ABRANTES | Lawyer, ABRANTES ADVOGADOS • MARJON VAN DINTHER DE UTRA MACHADO | Director, CCPH ANA BRANCO | CEO, WTM • VALTER ALCOFORADO BARREIRO | Executive Director, KNOWING COUNTS • CASSIANA BRUEL | Sales, LEX MARIS ROBERTO LEVY | Partner, FERREIRA & LEVY - INTERNATIONAL MARKETING & EXPORT CONSULTING • ALEXANDRA MORGADO | Architecture and Space Consultant, PLAN KI DENNIS JOHNSSON | CEO, SEC.72 BUSINESS SECURITY • PAULA ALMEIDA | Sales (Dutch market), TAYLOR PERFORMANCE EVA VAN DER KROEF | Team Manager, MERCATOR • PEDRO MENDONÇA | Account Manager, OCÉ PORTUGAL | 33

Business Interview

Sua Kay Architects

An international success story Interview | Chris Graeme

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 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 cuttingedge projects both in Portugal and abroad.

Another strong point is that it invests in bright, young talent and competes for projects 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.

” “It’s very important when designing a

building to come up with a design that will stand the test of time,” MÁRIO SUA KAY | Director, SUA KAY ARCHITECTS

34 | Globalisation

”

The architect, born in Mozambique, agrees that urban regeneration projects could be important for the commercial and residential markets in the absence of new real estate projects in Portugal, but he says that local authorities need to be pro-active and flexible. 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 rehabilitation 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 believes will need to have additional new uses.

The shopping experience will increasingly be about the services and attractions that shopping centres offer: transport, pharmacies, 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 delivered 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 international strategy long before the current economic crisis. “Our focus abroad began after our DV Coimbra and Vila do Conde Outlet Factory projects which were innovative 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 components, 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 Casablanca, 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 important 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 office towers, nine apartment towers of varying 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 expertise they have developed is scale – the ability to design and execute large projects, a fact that has stood the atelier in good stead when competing for work on the international stage.

He is looking forward to the next 20 years. | 35

Business Report

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Liberdade Street Fashion Every day is a fashion day PHOTOS | Chris Graeme

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.

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ENTRANCE FROM RUA DR. GONÇALO SAMPAIO D. JORGE ORTIGA | Archbishop of Braga MESQUITA MACHADO | Mayor of Braga • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA ANTÓNIO SALVADOR | President, BRITALAR • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA JOSÉ REGOJO | REGOJO IMOBILIÁRIA • ÁLVARO PORTELA | SONAE & WIFE ANTÓNIO CORREIA DIAS | Developer, DOURO RETAIL PARK • MARIA EMÍLIA TEIXEIRA LUIS MESQUITA, MARIA ANTÓNIA PORTOCARRERO | IMORENDIMENTO • CRISTINA LEBRE | REGOJO IMOBILIARIA ISABEL CARDOSO | MASSIMO DUTTI • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIARIA • RUTE RODRIGUES | LSCOFFEE • CRISTIANO MARTINS • ANA ANTUNES | DIMODA • CATARINA REGOJO ELISABETE PORMEZINHA, REGOJO IMOBILIÁRIA • JOÃO CARVALHO | Executive Director, REGOJO IMOBILIÁRIA • CRISTINA LEBRE, REGOJO IMOBILIÁRIA JAUME LLOPIS, MAGDA DUARTE • MANUEL DIAS FERREIRA • PAULO REGOJO | Board of Directores, GROUP REGOJO

| 37

Business Promo

A successful brand 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 family-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.

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 shopping, leisure and wellbeing.

INVESTING IN SUSTAINABILITY

Sustainability is one of Dolce Vita shopping centres’ key strategies and is evident in all the development phases of its shopping malls, A DYNAMIC SHOPPING, LEISURE enabling it to gain important economic, enAND WELLBEING CENTRE vironmental and social benefits. Chamartín In fact Dolce Vita Tejo enjoyed sales growth operates an Integrated Management System in the region of 10% in 2011 compared with throughout all of its shopping centres, based on the international standards ISO 9001, ISO 2010.

144001 and OHSAS 18001, which enables Dolce Vita Tejo is positioned as a regional available resources to be used more efficiently shopping centre with a catchment area of around 2 million inhabitants from 6 Greater and provide a greater range of products and Lisbon municipalities– Lisbon, Loures, Oei- services at a higher quality benchmark. As ras, Sintra, Amadora and the western region. a consequence, the company’s management system means that it is able to reinforce the In addition to a wide range of top-quality confidence with and commitment to custombrands and services, leisure spaces, includers, suppliers and business partners. ing KidZania - a unique-in-Europe family 38 | Globalisation

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 management of lighting and air-conditioning, escalators operating on a stand-by mode during quiet periods, water and time efficient 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 community 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 separation of recyclable rubbish stood at 41.3%, representing an increase of 11.8% over the past 5 years.

PROVIDING JOBS IN THE COMMUNITY

Its 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 associations, 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 education. This project has been a real force for change in the Casal da Mira neighbourhood, which is by the Dolce Vita Tejo, giving local children the opportunity to expand 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.

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

A BENCHMARK PLAYER

Dolce Vita has won a number of national and international distinctions over the years which recognise its successful wellstructured projects. The know-how that CREATING BUSINESS the brand has built up over the years in the OPPORTUNITIES development, conception, and management To sum up, Dolce Vita puts people first and of shopping centres places Chamartín’s staff members are invited to share its Dolce Vita brand as one of the benchmark experience and vision for coming up with players in the sector at an international innovative ideas, ideas which not only get level. | 39

Portugal

Business Interview

A land of real estate investment opportunities for those with cash Interview | Chris Graeme

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

private investors looking for assets in prime and stable sites with high yields and less risk

”

WALTER FÁBREGA | Head of Capital Markets, JONES LANG LASALLE

40 | Globalisation

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 Jones Lang LaSalle says only the best products and opportunities,” says Walter Fábrega. are in demand in the logistics sector, although there are top-quality logistics platforms in In 2012, opportunity analysis will be made good locations and tenants with attractive with greater focus on each local market funcontracts. damentals (‘Thinking globally, Acting locally’) and in particular on the sustainability over The market offers other opportunities for time of the returns for any type of asset. “We opportunistic and value added investors as think that traditional markets will continue well as non-conventional investments, as is to show important amounts of investment While debt and debt restructuring is in the the case with hospitals which currently have because they will have the most liquidity forefront now as banks suffer increasing levels interesting products for some investors.

(United Kingdom, Germany and France), but of credit default, there will continue to be also the markets that had a very active year some refinancing facilities from banks for Investment in the office sector in prime areas in 2011 and which continue to show growth companies that meet their borrowing obliga- will continue to present the best opportunities potential for investors (Russia, Poland, Czech tions, while those that cannot will be forced in cases where the vacancy is less than 10%, Republic and Sweden) will show a good perto sell their assets. “The current market will coupled with the realities of reduced rents formance,” he explains. The strong demand not leave much room for contracting more which are viewed as an opportunity. “We for traditional markets and high activity of debt since the banks’ criteria is much more think buildings in the best prime locations other secondary markets has caused a signifiselective, while the costs in terms of interest that need refurbishment will provide good cant increase in prices, which means it will are extremely high,” says Walter Fábrega who investment opportunities at attractive prices,” be increasingly difficult to obtain attractive also points out that there are investors who says Walter Fábrega. profit levels. That’s why more investors began don’t currently have the ready cash. “These to identify opportunities in other markets. In conditions mean that the perspectives for Overall Jones Lang LaSalle believes that in a this scope, Portugal is in the first line when investment in 2012 aren’t very favourable for recession Portugal, as a periphery country, offering excellent opportunities with low risk debt buyers. reaches the bottom and recovers later than and very attractive returns. other traditional European markets, “ suffers That said, there are investors with the capacity later, suffers more, and takes longer to reGetting back investor confidence is a matter for investment or the ready cash to complete cover,” Walter Fábrega points out; adding that of time and the adjustment in prices will some deals, especially private Portuguese after each recession there is always a period bring the prices gap between property owninvestors (up to €15 million), private Spanish of uncertainty, for growth potential and new ers and investors closer. During the second investors (up to €30 million), as well as some opportunities. half of 2012, we will see the first deals at very International Investment Funds (Equity Buyadjusted prices, and that will boost the investers) with the capacity to put down hard cash “After the 2011 bailout, it will be a question ment market,” Walter Fábrega concludes. for products that require an additional spread of time and confidence before we see how the “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 opportunities 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 investment values of between €2 and €50 million.

”There are very attractive opportunities for

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.

| 41

Cempalavras

Partners Opinion

Reforming the Urban Rental Law

New opportunities for developers and investors MIGUEL MARQUES DOS SANTOS | Head of the Department of Real Estate and Urban Planning GARRIGUES PORTUGAL 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.

3. As to the regime of works in rented buildings, 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 procedure), having also been established that for contracts prior to 1990, when there is a lack of agreement between landlord and tenant, It’s true that the 1990, 1995 and 2006 reforms the termination of the contract only obliges improved things for future contracts which The good news is that all this could be about the landlord to the payment of compensation benefitted from a more open regime, whereby to change soon. to the tenant (except in cases whereby the rents were not frozen and the termination tenant is 65 or over or disabled to a degree of On December 30th, 2011, the Government of contract regimes could be freely negotiover 60%, in which case the landlord will be ated. But the fact of the matter was that these presented the Portuguese Parliament with a obliged to re-house them); and reforms did not bring changes to the regime bill proposal aimed at changing the urban 4. With regards to eviction, a Special Eviction rental law regime. This proposed law, which of old contracts (i.e. residential contracts Procedure has been created which will take is currently being debated, and is expected to place out of courts, in the new “National before 1990 and commercial ones before 1995), which created a two-speed market (old pass through parliament by the end of March Rental Office”, having also been established a (coming into force by the end of June), repre- number of rules to ensure that in cases where contracts v new contracts), bringing all the sents a real break with the past. inherent disadvantages with it. it is necessary to appeal to the courts, the processes will be more speedy and The changes introduced by this proposed law judicial The bottom line is that successive governefficient. are, in essence, the following: ments since the 1974 Revolution have been there being various aspects of the 1. With regards to blocked rents and manda- Despite incapable of implementing a genuine rental proposed law which could and should be law reform, with dreadful effects both on the tory renewals of old contracts, a mechanism improved (the majority in parliament has rental market and the country’s economy. A has been created to update the rents and already shown an openness to introduce imtransfer the contracts onto the new regime, virtual lack of a residential rental market provements in the scope of the parliamentary which is based on the principle of private ne- debate that is currently forced people to purchase their own homes, underway), the solugotiation (although with a regime rule in situ- tions included in the proposed which led to unsustainable levels of private law, are overall ations where agreement is not reached), and and external debt, and a malfunctioning very positive.

The market will be open, which will permit, in a relatively short period less regulated, more dynamic and more commercial rental market prevented new securer, (of between 1 and 7 years), the termination businesses from developing it from now on to compete more of old contracts or, at least, the termination of enabling equally with rental markets in other European The rental freeze, the mandatory renewal rent freezing; Union countries. of contracts, the transference upon death of 2. As to the automatic transferral of the right rental rights, and the virtual impossibility of to rent on the death of the tenant, the posThe fact that the Portuguese market is still a terminating contracts to undertake profound sibility of successive transferrals will be elimi- green market, being far from its cruise level works - which were the hallmarks of the old nated. Furthermore it will be impossible to (which will naturally enable greater growth contracts regime - together with the poor transfer the right to rent for anyone who owns rates) and the fact that we will now have the functioning of the courts, which prohibit the their own house or is renting in the same same kind of laws practised in more develimmediate eviction of non-compliant tenants, municipality, and a rule will be introduced oped markets (which will necessarily mean have brewed an explosive cocktail, which which will transfer some of the old contracts greater security for the investment), means brought us to the present situation. to the new regime in the case of direct rental new opportunities for investment for both Since the 1995 reform, the commercial rental transference; developers and investors.

42 | Globalisation

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.

bureau veritas, o seu parceiro para as várias etapas do seu negócio n Inspecções n Auditorias n Ensaios n Certificação n Classificação de Navios n Controlo e Assessoria Técnica n Formação

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.

Bureau Veritas Portugal www.bureauveritas.pt info@pt.bureauveritas.com 707 200 542

| 43

Setting the Bar

Business Interview

Interview | Sandy Guedes de Queiroz

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?

” Our network of 900 offices in

140 countries, with over 48.000 employees, allows us to secure our services portfolio in those countries.

”

RICARDO FERRO | Director, Business Development Department, BUREAU VERITAS 44 | Globalisation

toriety is Certification, which involves the certification of management systems, processes, products/services and people in the Bureau Veritas Portugal is committed to fields of quality, health and safety, environconsolidating its operation in Portugal in ment and social responsibility and second comparison with 2011. We’re aware that party audits based on the clients’ specificathe country is going through a period of economic contraction and that our clients are tions or references developed by BUREAU faced with that reality, however our goal is to VERITAS Certification. leverage our domestic activities through the In Construction, we operate in a comprehensupport we can provide companies in their international expansion. Our network of 900 sive manner in order to respond to all of the regulated demands of the construction sector, offices in 140 countries, with over 48.000 as well as all needs in technical assistance. We employees, allows us to secure our services carry out technical quality control, techniportfolio in those countries. cal structural control, project management, B.V. operates in a wide variety of fields. audits and surveys, technical support in asset Which is your most relevant activity in management, safety during construction (coordinating on site safety and health proPortugal? tection, prevention plans and verification of Bureau Veritas’ mission is to inspect, asconformity during construction) and finally, sess and certify goods, as well as projects, technical assistance during construction in products or systems, according to internal Quality, Environment and Safety. or external references, in order to issue a conformity report. Within that mission, we Regarding Health, Safety and Environment are divided into 8 business fields. The areas (HSE), we carry out inspections, audits and with the greatest volume are Industry and measurements in the fields of the environInspection Verification Services, providing ment, health and safety and we offer techniservices such as the conformity assessment of industrial equipment and premises that is cal assistance to help organizations define mandatory or specified by the client, project strategies to manage their HSE, namely: Due Diligence audits, Prevention of Risks review, workshop inspection (contractors), at Work, Safety Advisors, Legal Conformity site inspection (yard), asset management, Assessments, Strategic Plans, Waste Manageemployee qualification, certification of ment Plans, Environmental Impact Plans, industrial equipment and testing (ex. nonEnvironmental and Safety Surveys, General destructive testing).

Risk Assessment, Fire Hazard Risk Assessment, Emergency and Evacuation Plans, Regarding Inspection Verification Services Technical Outsourcing.

(IVS) we carry out periodic inspections of equipment and premises according to mandaFinally, I must mention Bureau Veritas’ history regulations or client specification, and we also provide services relating to electrical tory in marine activity, with the classification of ships, equipment certification, technical installations, fire fighting systems, pressure assistance and outsourcing services. Furand lifting equipment and machinery. thermore, across the board, we can provide The third largest area in terms of turnover training in every field and expertise where we and number of staff is international trade operate in a technical capacity. represented by services rendered to governments, such as pre- and post- shipment inspections, x-ray, verification of the conformity Is B.V’s presence in African markets independent or managed through of imported goods and verification of the conformity of the construction and quality of Portugal?

Bureau Veritas is present in the principal products, as well as the inspection and conAfrican countries, and we have a very close trol of merchandise for import and export.

The area with the greatest exposure and no- collaborative relationship with the PALOP

countries. Our operation in Angola, for example, is very strong, our second largest 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 African 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 consolidated 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. | 45

Business Promo

L’AND VINEYARDS | THE LAKE VILLAS

Charming Cluster of Villas 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. 46 | Globalisation

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.

The innovative Sky View feature found in the Sky Suites in the first phase of the development 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 charming 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 villas, the nucleus of serviced townhouses and the central building and winery. The remaining clusters of L’AND VINEYARDS serviced villas were designed by London-based Sergison Bates Architects; Lisbon-based João Luís Carrilho da Graça Arquitectos; Architekturbüro Peter Märkli, Zurich; and José Paulo dos Santos Atquitecto, Porto.

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 Montemor.

Interpretations on Roman and Moorish architecture inspired by the local villages 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.

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.

The interior decoration of the public spaces, 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. | 47

Business Report

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BPCC Centenary Dinner

Paulo Portas at the British-Portuguese Chamber of Commerce PHOTOS | Chris Graeme

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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CHRIS BARTON | CEO, BPCC • ANTÓNIO COMPRIDO | Board Member APETRO • PAULO PORTAS | Portuguese Minister of Foreign Affairs • JILL GALLARD | British Ambassador to Portugal PAULO SILVA | Managing Partner, AGUIRRE NEWMAN • PATRÍCIA LIZ | Managing Partner, AGUIRRE NEWMAN • ERIC VAN LEUVEN | Managing Partner, CUSHMAN & WAKEFIELD PAUL BURTON & ANTÓNIO COMPRIDO, Board Member APETRO CLÁUDIA VIDREIRO, Research and Services • ESTELA BAPTISTA | Administration • HELENA FERNANDES | Events & Services • CHRIS BARTON | CEO, BPCC JOHN STILWELL & MARK STILWELL MARK DAWSON & MANÉ DAWSON OLIVEIRA ROLO & FERNANDO NEVES PETER & VALERIE DAWSON JOSÉ JOAQUIM FREITAS DE ARAÚJO | MILLENNIUM BCP JOÃO ALVES & DOROTHY ALVES FILIPE & ULRICA LOWNDES MARQUES RENATA RAMALHOSA | BRITISH EMBASSY - UKTI • JILL GALLARD | British Ambassador to Portugal

| 49

Business Promo

LX Factory

A hive of young entrepreneurial talent 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.

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 manufacturing complex of buildings are architecture firms, internet start-ups, advertising agencies, boutiques, performing arts schools, design 50 | Globalisation

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 company 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

set their own agendas and pace.

healthy. There’s the chance to enjoy a coffee while perusing over the volumes in one of Lining the cobbled main street between these the most original bookshops in Lisbon, Ler honeycombs of enterprise are a myriad of Devagar, which is packed from the floor to cafés and restaurants: A Mesa - an Italian its lofty ceiling with new and second-hand eatery with pizzas to die for, where you can books, oh, and often hosts small arty semieat to your heart’s content for 7€, a restaurant nars and meetings. serving up tasty vegetarian options with an outdoor garden, or the snack café Landeau LX Factory already attracts dynamic events that’s famous for one thing – the best choco- like Open Day, which is now in its eighth late cake you’ve ever tasted. year, takes place in May and offers a full programme of arts, design and entertainments The accent in this small and compact comwith projects, exhibitions and performance mercial warren is on the stylishly different, arts events, and the LX Market which is the organic and the sustainable. There’s a open on Sundays. bio-supermarket, for example, which may There’s even an art colony, the Red Bull not be as cheap as Pingo Doce but it is 100% 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 businesses, 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 innercity area into a young, creative and exciting new urban environment. | 51

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Lisbon Luncheon

Health Minister addresses the International Club of Portugal PHOTOGRAPHY | Chris Graeme

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 52 | Globalisation

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JORGE SOUSA MARRÃO | Partner, DELOITTE • PAULO MACEDO | Portuguese Minister for Health • WILLIAM T. CUNNINGHAM • MARGARIDA BAJANÇA | DELOITTE • FILIPE SIMÕES DE ALMEIDA | Partner, DELOITTE MANUEL RAMALHO | President, ICPT • NUNO CARNEIRO | Director, FRONTLINE ANTÓNIO SARAIVA | President CIP JOSÉ MANUEL SILVA | Bastonário da Ordem dos Médicos CONCEIÇÃO CORREIA | Board Member, FLUXOGRAMA • MARTA CORREIA | Board Member, FLUXOGRAMA HENRIQUE CAPELAS | Health manager SNS • FÁTIMA VALADA FERREIRA | JRC Advogados • EURICO ALVES | Africa consultant, ERS JOSÉ CARIA | Communication Consultant • ANTÓNIO CARMONA RODRIGUES | former Lisbon Mayor JORGE DELGADO | COMPTER • MANUELA VALE | Segurança Social • JOÃO JACINTO | FRONTINO TURISMO • HELDER BRÁZ | RH MAIS CARLOS DURÃES DA CONCEIÇÃO | Board Member, PARPÚBLICA • JOSÉ FRIAS GOMES | Director, CENFIM CARLOS SÁ | CMO, TALENT – Individuality Through Education • MIGUEL CARDOSO E CUNHA | board advisor, COMPTA LUÍS PALMA DA GRAÇA | Chief Development Officer, VALLIS CAPITAL PARTNERS • ARMANDO GARÇIA | doctor, INSTITUTO MICRO CIRURGIA OCULAR

| 53

Special Partners Interview

Looking for the best of

BOTH SIDES

believe in what I’m doing and I believe in the best of both countries.

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

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 American 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 placements in specific fields.

Interview | Chris Graeme

W

hen 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 Portuguese descent and her father, managing director of Mobil Oil, came to Portugal in 1959 to look for oil but found his ‘Lusitanian 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.

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 Because of this her friends were often the for his capacities to get things done. Her children of diplomats some of whom she favourite speaker is Paulo Portas. “He really studied with at the French Lycee. It created believes in his country, always has. I think roots with Portugal since Anne visited cous- he’s an honest man as most members of this ins here every summer. coalition government, I believe, are,” she adds.

“The French have a different way of thinking Anne Taylor thinks that 2012 and 2013 are and culture from the Americans, whereas I going to be turning points for Portugal, got that sense of American principles and which will prove that it is not like some of protestant work ethic from my Methodist the other debt-ridden countries. upbringing,” she says.

She will have two years at the helm of Anne lived in Portugal through the Revolu- the American Club in which to make her tion in 1974 because the new government mark, and has already made a good start by wanted to keep on good terms with Mobil appointing a new board of directors, all PorOil. “Frank Carlucci, a US ambassador, tuguese, and beginning work on her project called my father at 7am that April 25th to create an alumni association for past winmorning to say ‘do not take the girls to ners of the American Club Awards. school!” she remember, adding that the day 54 | Globalisation

” Because I’m emotional, I really

”

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

”

”

As president, with Charles A. Buchanan Jnr or ‘Buck’ a he is affectionately known, as vicepresident, and John Scott Johnson as treasurer, “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. | 55

Business Report

Portugal must focus more on

Travel Better & Wisely

Globalisation VICTÓRIA FERNANDES | Sociologist

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 advantage 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 - geographical 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 internationalisation model as their main strategy for success, 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

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 designed 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 Portuguese companies are designing, building, overseeing and managing road, railway, port and airport projects all over the world, contributing to the integrated development of various countries’ infrastructure and building developments. Real estate and tourism development companies are taking the lead in spreading their wings to new international markets; companies like Tivoli, Béltic and Promovalor. Efacec, the largest national electrical mechanics group is another case in point when it comes to internationalisation 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 Portugal 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.

Victória World Travel (VWT) Guides may be acquired online at amazon.co.uk, bookhouse.pt, fnac.pt or at Portugal `s leading bookshops.

At www.victoriaworldtravel.com you

Travel better & wisely

56 | Globalisation

| 57

Content through Premium

Business Interview

Interview | Chris Graeme

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.

“There will be a lot of innovations this year, we’re launching the MIPIM Real Estate Investor’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 management, 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 insurance 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.

” Germany continues to be a key player and this is one reason it was chosen as this year’s Country of Honour FILIPPO REAN | Director, MIPIM

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”

and South Korea. South America also has a presence with Grupo Mariana (Nicaragua) and Inprotur Instituto Nacional de Promocion 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.

“To help our clients to learn more about MIPIM is a global real estate market where sector innovations and take advantage of a whole range of projects can be found: As part of the Country of Honour progood practices, we’re launching ‘Building gramme, a series of German-focused events residential, offices and shopping centres. “It Innovation’. This new programme will put seems important to us to provide attendees is scheduled during MIPIM. This includes buildings centre-stage by highlighting inwith an overview of the global real estate the keynote speech of Joschka Fischer, the novative initiatives that enhance the value former German foreign minister from 1998 market, as well as accurate information on of real estate portfolios,” says Filippo Rean, to 2005, who will discuss the challenges specific branches of the industry. adding that it will include a pavilion with “It was already doing this with sectors such of the European financial crisis that are the most innovative technology and busias tourism real estate and social housing,” so critical for the future of real estate. The ness solutions, featuring several develophe points out. conference programme will also feature ments, architecture firms and technology two other conference sessions: one review- Among the 60 conference sessions schedsolution providers. A series of conferences ing the best investment opportunities in uled, MIPIM 2012 will enlarge this scope will be devoted to the architectural, ecoGermany in terms of sites and types of as- with specific focus on logistics and sports nomic, social and environmental challenges set; the other highlighting the cooperation facilities. facing today’s buildings. To prepare the MIPIM 2012 will also give major coverage models of cities with investors and private ‘Building Innovation’ programme for the to investment issues in the property sector. partners. long-term, MIPIM has formed a partnerThese sessions will look at investment-relatship with the Real Estate and Sustainability However, the real estate industry is global ed issues from various angles. All the main Chair at ESSEC International Business and in the current economic context inves- countries will see their distinctive features School. Professor Ingrid Nappi-Choulet, tors are cautious and carefully evaluate each analysed including several conferences on who heads this discipline, will lead the con- project. Europe’s robust position is evident Asia, which will be scrutinised in detail to ferences and prepare an overview of all the with exhibitors from France, with the determine the best investment opportunitopics covered at MIPIM to help advance Grand Paris showcased on the Paris Region ties. A session, jointly organised by IPD, knowledge in this constantly-evolving field. stand; from Italy, with Rome’s return; Spain will analyse the features of the British marFilippo Rean says that MIPIM is the “mir- with Barcelona, and a strong presence from ket, a two-speed market between London ror” of the global real estate market, gather- the Russian Federation and Eastern Europe. and the rest of the country. Another session ing the whole spectrum of real estate play- Asia will also be well represented with ma- will be dedicated to Spain, where legislation ers from over 90 countries, providing an has changed with the new government. jor companies from China, Japan, Taiwan “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 participants 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.

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Am Cham

Álvaro Santos Pereira at the AMCHAM Luncheon PHOTO | Chris Graeme

Minister for the Economy, Álvaro Santos Pereira, addresses 200 businessmen at a luncheon organised by the American Chamber of Commerce in Portugal 60 | Globalisation

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ÁLVARO SANTOS PEREIRA | Portuguese Minister for the Economy NICHOLAS L. RACICH | COO, BANCO BIG • ELIO OLIVEIRA BOGA | Vice President, CITIBANK INTERNATIONAL PLC GRAÇA DIDIER | AMCHAM • CARLOS MORAIS | Managing Director, SISAB • JOSÉ JOAQUIM OLIVEIRA | Board President, AMCHAM VICENTE PEDRO NUNES | Financial Director, RIBERALVES • RICARDO ALVES | Manager, RIBERALVES • JOSÉ ELIAS | President, AZEOL NUNO NORONHA | Director, CHARTIS • MIGUEL COSTA DUARTE | Board Member, COSTA DUARTE CORRECTOR DE SEGUROS JAIME ESTEVES | Partner, PWC • JOSÉ SÁ CARNEIRO | FLAD NUNO PORTELA BELO | Partner, DELOITTE • RICARDO BASTOS SALGADO | Coordinating Director, BES • MANUEL SANTOS CARNEIRO | Consultant, RANDSTAD MIRA AMARAL | Vice President, ANIET • JORGE VIEGAS | Managing Director, RP GLOBAL RUI GOMES AMARAL | Board Member, MONTEPIO • OSVALDO LUÍS COUTO | CEO, FABRICA DE TOBACO MICAELENSE • NUNO MUNIZ | Board President, FABRICA DE TOBACO MICAELENSE ANTÓNIO CORRÊA FIGUEIRA | Board Member, LUSO ATLÂNTICA • EMERICO GONÇALVES | CHARTERS • MIGUEL DE PAPE | Director, MARSH FERNANDO SILVA | Vice President, INCI • ANTÓNIO FLORES DE ANDRADE | President, INCI ANTÓNIO JORGE | CEO, SUGALIDAL • PEDRO ROCHA MATOS | Partner, HEIDRICK & STRUGGLES RICARDO OLIVEIRA | Lawyer, PLMJ SOCIEDADE DE ADVOGADOS • CARLOS FIGUEIREDO | Senior Legal Counsel, UNILEVER | 61

Partners Cars

Cross Country Icon Mercedes G-Class

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.

T

he 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 developments brought to fruition by the car manufacturing giant over more than 3 decades. That’s why the latest generation of G-Class is an impressive combination of cutting-edge technology, 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.

62 | Globalisation

The G-Class family currently has three different versions: station wagon, shooting break and cabriole, enabling them to be combined with a V6 diesel engine – one that is particularly 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 maximum binary.

This star of cross-country SUV vehicles uses high-performance technology, as well as dynamic driving systems so as to provide a fantastic 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.

| 63

Business Report

ICSC European Conference

Ain’t no mountain high enough!

18-20 April 2012

InterContinental Hotel, Berlin, Germany

Improving your global networking skills

Is Big Beautiful?

VALTER ALCOFORADO BARREIRA | Executive Director KNOWING COUNTS

· Find out how “Big” the investment ambitions,

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 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.

“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 recommendations for networking around the world.

• Study types of networks in the culture - there really are different ways of building relationAnd if each of these potential contacts knows ships in different cultures. It could be a more 50 people, that means 125,000 contacts from closed network, like in China (Guanxi) or the contacts of your personal business partners. more open as in the United States. Avoid makAnd that can extend to 6,250,000 people - and ing assumptions that could prove barriers in that’s a conservative estimate! building your business relationships.

But are there are different ways of networking in the world? According to Valter Barreira there are specific styles of building relationships 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.

• Clearly define what you want – will your desires be interpreted as offensive and unacceptable or reasonable and professional?

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

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

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

64 | Globalisation

Key speakers include: Dr David Bosshart, CEO, Gottlieb Duttweiler Institute, Switzerland Gerard Groener, CEO, Corio NV, The Netherlands Cyriac Roeding, Co-Founder and Chief Executive, Shopkick, USA John Scott, Head of International Business Development, Debenhams, UK

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

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

• 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.

discussions

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

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

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.

· Network with leaders of the Retail Real Estate Industry · Take part in interactive sessions and roundtable

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

• 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.

• Be out there – teach, talk and write.

retailer strategies and development goals of the industry are

• 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 • Use the Internet – without losing focus on professionals to find out the best way of doing what’s important. In an MIT study those with a business in each country. The benefits can be network of digital contacts were 7% more pro- enormous,” concludes Valter Barreira.

New for 2012!

ICSC European Partners

Reduced rates for NEXT GENERATION €450

Gold Sponsors

TO REGISTER PLEASE GO TO: WWW.ICSC.ORG/2012EU | 65

Focused on Fitness Business Report

Interview | Chris Graeme

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. 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 training,” says Nick Coutts.

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

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 offered customers more flexibility and valuefor-money while still providing all the very latest equipment and support.

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 “I wanted a new brand that was right for the who explains that the gym has focused Portuguese market and the current ecoon group fitness exercises which the nomic times,” says Nick Coutts, who adds Portuguese go in for. that he took a look in the European market in Germany, Holland and the United King- In fact our prices are higher than the most dom which are “more advanced” markets in cheap budget model clubs operating in some terms of the fitness industry. other countries, although prices are 50-80% Fitness Hut has adapted the pure low-cost higher than most cheap budget model clubs model into a premium brand, which means operating in some other countries, we are

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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 arrangements 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.

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