Nº 5 Partners in Business Magazine

Issue Nº 5

:: Winter 2012

C o n s u m e r Tr e n d s

• Reforming the Welfare State • Immochan gets a makeover • Why retail’s all tied up • MAPIC 2012 • Alegro Setúbal • Conrad Algarve • Freeport

CON TACT NO U

WR LIM E OU S I T R ED OFF ER O SPECIA BEA N EXCLU L C APA H CLUB SIVE RTM ENT S.

RESIDENTIAL

BEST DEVELOPMENT EUROPE Dunas Douradas Beach Club

by Dunas Douradas Beach Club

INDEX

04 • Message from the director 06 • The Real Estate Market in Portugal: Why Government isn’t helping.

10 • Latest breaking news 14 • Brazil’s shopping centre boom – Opportunities for Portuguese specialist developers.

16 • Reforming the social state – Can public health and welfare survive?

20• Soft Law – Why the legal system in Portugal needs to get hard?

22 • Conrad Algarve – Creating a new standard of luxury.

24 • Being positive despite the gloom – Why retail confidence will return.

26 • Alegro Setúbal – Setúbal gets its first modern shopping centre.

30 • Getting a new image – The rebranding of Immochan.

32 • Designing a shopping centre – An architect’s perspective.

34 • Freeport – Great brands, Great prices.

38 • Meet the new boss – The man at the helm of CBRE in Portugal.

40 • Why the customer is king – Consumers calling the shots in retail.

44 • Expo Real – Ending on a high.

46 • How the Depression, smart technology and the nice generation are causing a revolution in retail?

48 • Photo report: Pop Up retail.

52 • Photo report : Picture this! – Real Estate movers like you’ve never seen them before.

56 • Candid conversations with the ambassadors – Royal British Club luncheon.

60 • Here’s to another century! – The Portuguese-French Chamber’s 125th Anniversary bash.

64 • Photo report: ICPT dinner with Artur Baptista da Silva.

66 • Getting into the Christmas spirit – How the act of giving reaps dividends in business.

DIRECTOR | Luis Figueiredo Trindade • lft@partnersinbusiness.info COMMERCIAL | Catarina Meneses • catarina.meneses@partnersinbusiness.info EDITOR | Chris Graeme • chris@partnersinbusiness.info DESIGN CONCEPTION | André Freire • David Martins DESIGN DEVELOPER | Alice L.C TRANSLATION | Chris Graeme SPECIAL CONTRIBUTORS | David Sampson • davidsampson@partnersinbusiness.info OPINIONS | António Sampaio de Mattos • João Costa Quinta • Ricardo Ferro • Sua Kay • Victória F. • Valter Alcoforado Barreira PHOTOGRAPHY | Chris Graeme PRINTER | Finepaper, Lda (Lisboa) – nº DL: 341143/12 DISTRIBUTION | 3,000 are distributed by hand to leading business people in the Greater Lisbon area, 1.500 copies are distributed by post internationally and 500 copes at the national and international trade fairs, events of the Chambers of Commerce.

Consumer Trends| Issue Nº. 5 – November/December 2012 Published bi-monthly and owned by Bravespiral – Comunicação, Unip. Lda. Av. Fontes Pereira de Melo, 6.º - 4 And | 1069-106 Lisboa | 21 79 700 29 Registo na ERC nº 126184 | Annual subscription fee: 25 euros / Bi-monthly www.vivainportugal.com Reproduction of material in this magazine in any form is prohibited without prior written permission from the Partners in Business team.

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

|3

[ EDITOR IAL ]

THE RETAIL MARKET

WHAT DOES THE FUTURE HOLD? LUIS FIGUEIREDO TRINDADE | Director, PARTNERS IN BUSINESS

The main trends seen in this sector involve the rebuilding of own brands, the reformulating of the category of the more sophisticated products by retailers.

Secondly, the appearance of Small Box, convenience shops with multiple concepts to embrace different targets.

T

The retail market in Portugal is fairly contracted and the paradigm has changed. The times when more than a dozen shopping centre and retail developments were opening seem a long way off. The national product from commercial groups in the retail market stands at 3.5 million m2 with no openings on the cards before the end of the year. This situation is a window onto the crisis that Portugal has been going through since 2008 and is also living proof that the retail developments market here has matured.

In the downturn it is Prime high street shopping in the smart streets and avenues of Portugal’s main cities, Lisbon and Porto, that is driving the transactions, particularly in the luxury market. This phenomena is down to the dynamic quality of international luxury and aspirational brands, which are highly sought after by well-heeled tourists from Angola, Brazil and China. There is an overall feeling of scarcity in terms of offer in shopping centres and other retail spaces, even when existing and old buildings are done up to meet the criteria of contemporary commercial activity so that they can continue to show transactions with a Key Money component.

For investors, the value of prime rents has remained stable in Lisbon and Porto as a result of the good dynamics of high street commerce and an increase in demand from operators in first line shopping centres. The exception is in the retail parks where prime rents have fallen. Meanwhile average rents have suffered some pressure, given the demands of shopkeepers on the contractual conditions negotiated with second line shopping mall operators, demanding variable rents and various incentives from owners.

The Portuguese are going through austerity and cuts in expenditure to their family budgets. Clothing, leisure/travel, fuel and the variety and quality of foodstuffs are all sectors which are feeling the pinch. Not just for the middle classes but also for the upper classes, it has become incompatible to marry desires/needs with the budgets available.

The economic climate and consumer confidence in Portugal have suffered a sharp fall, a record negative in one of the components of this indicator has been registered: consumers have never been so pessimistic as to their capacity to save in the next 12 months. On the other hand, business leader confidence in the sector has accompanied the downturn. The main factor being the activity appraisal component recently registered.

The main trends seen in this sector involve the rebuilding of own brands, the reformulating of the category of the more sophisticated products by retailers.

Secondly, the appearance of Small Box, convenience shops with multiple concepts to embrace different targets. And lastly, the migration of traditional commerce to the on-line environment.

4 | Consumer Trends

[ SPEC IAL R E P ORT ]

THE RETAIL MARKET IN PORTUGAl COMPARED TO EUROPE

DAVID SAMPON | Special Contributor, PARTNERS IN BUSINESS

THE VESTED INTERESTS AND STRUCTURAL PROBLEMS

Hampering Portuguese Development And Retail The challenges faced by developers and retailers in Portugal are no worse than elsewhere but the government is slower to respond, attempts at change are often frustrated by vested interests and in some cases the structural problems are just too great. City centres in Portugal need revitalising and should provide opportunities for developers, investors and shopkeepers but the economics have to be recognised, and without encouragement from investors there won’t be enough money for long-term projects – public or private.

T

he anticipated fall by a further 10% in the disposable incomes of Portuguese consumers in 2013 must strike dread in the hearts of the shop keepers and restauranteurs who have so far managed to survive the crisis of the last three years.

Shops depend on people either having 6 | Consumer Trends

money to spend or access to cheap credit, but both money and credit facilities are now in short supply, and there is no sign of improvement.

In fact the International Monetary Fund warned last month that the austerity imposed under Portugal’s €78 billion bailout programme is having a bigger impact on the economy than previously thought, and there is a serious risk of further fiscal slippage and higher public debt.

The fund also pointed out that signs of political and social instability are starting to appear and that these pose a challenge to the government, as unemployment continues to rise and the economy enters its third year of recession.

Retailing has been hit across the world as owners of single shops and large chains struggle to find ways to respond to the fall in consumer spending and

“

For years it has been clear that in Portugal local authorities must cooperate with local owners and developers to rehabilitate city centre properties but despite much talk the government has done nothing...

”

the challenge posed by the growth in online sales. In the United Kingdom large chains like Woolworths, Comet and JJB Sports have gone bankrupt while other chains such as HMV are struggling to stay competitive.

In Portugal the chains have survived better at least partly because shopping centre landlords have been willing to forego rents rather than see more empty shops. But the rate of closure of small shops and restaurants in the first 9 months of 2012 rose by a third over the same period in 2011, to more than 320 per month.

Since 1991 retailing in Portugal has been transformed by the growth in shopping centres and other formats such as retail parks and outlets. This has allowed new retail brands to expand quickly, and developers like Sonae Sierra, MultiDevelopment, Mundicenter and Chamartín have flourished, but some of the later entrants like FDO with its Vivacci brand have not survived the downturn.

The same has happened to investors.

Those who came early like ING Real Estate and CGI have shown good returns but those who started in Portugal in the last ten years are struggling. Rockspring’s Portuguese Property Partnership, which invested mainly in shopping centres, now has a net asset value of zero. Rockspring’s

policy in Spain is that “real estate investment in a troubled economy can be profitable as long as the asset is Prime and the price paid for it is sufficiently attractive,” and at the right price there are still investors interested in Portuguese prime assets.

REHABILITATING THE INNER CITY The growth in out-of-town shopping centres has left the centre of many cities across Europe deserted with shops boarded up and restaurants closed. The best response is to give customers want they want, good parking and public transport and attractive surroundings.

For many years it has been clear that in Portugal local authorities must cooperate with local owners and developers to rehabilitate city centre properties but despite much talk the government has done nothing to provide incentives for urban restoration. In Lisbon a commission was formed by the City Council to prepare a plan to restore the Baixa but there was no money available and the plan has been forgotten.

In the other cities of Portugal the negative effects of years of neglect and rent control are all too visible.

The only hope is that some external

event like Expo 98 will become the catalyst for change. Some of the streets in the historic centre of Guimarães, which was a European city of culture this year, are a good example and the fund managers Fundbox are hoping to launch a fund in collaboration with the local council for the rehabilitation of the centre of Leiria in the same way as they have already done for Coimbra.

Such funds rely on both public and private capital.

The turmoil in the property market caused by the proposed increases in IMI (local rates) may push some owners to try to let or sell their shop properties, and the there is no doubt that the government’s decision to allow rental income to be taxed at a fixed rate of 28% (as opposed to the rental income being added to the taxpayers’ other income) should encourage wealthier taxpayers to let their properties. But the success of all these measures will be small until there are signs that the economy is recovering.

NEW SCHEMES IN THE PIPELINE No new shopping centre or retail park is due to open this year but there are some under construction and up to 9 new centres may open over the next two years. Each one is a leap of faith and all the developments are liable to |7

BUSINE IALSSR INT E P ORT E RV]IEW ] [ SPEC

“

“The one piece of good news from the market is High Street shopping in central Lisbon where a number of international brands have opened shops...

be delayed or even cancelled. Multi Development announced in February that the Meyer Bergman investment fund had agreed to guarantee the financing of the infrastructure for Forum Setúbal and its adjoining projects.

OeirasParque.Developers would rather expand an already successful existing centre than build a new one. It offers the chance to bring in an attractive new tenant (such as FNAC in Faro).

The one piece of good news from the market is High Street shopping Construction is due to start in 2013. in central Lisbon where a number The yield to the fund on the purchase of international brands have opened of the shopping centre when completed shops. The Chiado is the most in will be 8.25% which indicates that demand followed by the Avenida da most existing shopping centres in Liberdade and Rua Castilho. It has Portugal should be valued on the been reported that one third of the basis of a yield of 9% or more. Multi turnover in such shops comes from is planning to develop Forum Alverca Angolan visitors. Another area which and to extend Forum Algarve in has improved is Principe Real. The Faro, while Mundicenter is extending American owned Eastbanc has bought

”

a large number of properties around the square and it has become a trendy place to hang out. Demand there comes from local residents as well as tourists and other visitors but long term growth will depend on better parking and transport.

Future prospects for retailers and the property market are firmly linked to the course of the economy. Investors are going to return only when the terms are right and Portugal’s place in the Euro zone is no longer in doubt. It would help in the meantime for the banks to show that they are properly capitalised and not reliant on unrealistic property valuations.

FUTURE SUPPLY OF RETAIL SCHEMES IN PORTUGAL NAME LOCATION DEVELOPER Dolce Vita Braga Braga Charmatin Immobiliária Évora shopping Évora Imorendimento Alegro Setúbal Setúbal Immochan Centro Bordalo Caldas da Rainha Sonae Sierra Fórum Alverca Alcarca Multi Development SUB-TOTAL

GLA (m2) 70.831 16.391 41.200 24.000 51.000 203.422

City Park Caldas da Rainha Banif Dolce Vila Braga Braga Charmartín Imobiliára Retail Park Fórum Alv Alverca Multi Development SUB-TOTAL TOTAL

5.440 20.000 17.000 42.440 245.862

Other Retail Formats

Retail Schernes

Source: Worx 8 | Consumer Trends

[ PA RT NE R S NEWS ]

Dunas Douradas Beach Club bags HONOURS AT WORLD TRAVEL AWARDS

Dunas Douradas Beach Club walked away with ‘top honours’ at the 19th World Travel Awards ceremony, held at the new Conrad Algarve on Saturday 6th October 2012.

Europe, less than 2 years ago, “To receive another award of such prestige, voted by travel professionals from all over the World, is indeed a unique achievement and goes to show that perseverance and meeting our clients’ needs are primordial to success”.

Evy Ougendal, CEO Dunas Douradas Beach Club, was proud to receive yet another bench mark Award, Europe’s Leading Villa & A packed delegation of VIPs, senior Apartment Residences 2012, after having tourism figures and international media won the Bloomberg Best Development travelled from 35 nations to attend the

HipoGes Iberia hits €2 billion in managed assets Expected turnover for 2012 stands at €10 million

HipoGes, the global Iberian assets management company focusing on distressed assets, hit the 2 €billion mark in assets management in 2012.

Founded in 2008 by a team of international specialists with a vast experience in the assets management sector, HipoGes exceeded goals traced out for 2012, having achieved 200,000 managed assets, with a value of €2 billion, thanks to its sustained growth strategy.

With a consolidated position, HipoGes is already a market reference in the Credit and Real Estate Assets Management sector. Its strategic and sustained growth since 2012 has enabled to group to employ 100 staff and relocate to bigger, better premises.

10 | Consumer Trends

event, which was held in partnership with Conrad Algarve and Turismo do Algarve.

It was an evening of sweet success for tourism related businesses across the Algarve, and indeed for the Algarve itself (Europe’s Leading Beach Destination) and Portugal as a whole (Europe’s Leading Golf Destination) fending off strong competition from other European contenders.

CBRE launches world research challenge as part of sustainability in real estate A programme aimed at financing and inspiring innovative sustainability solutions in commercial real estate CBRE has announced the launch of the Real Green Research Challenge (RGRC), a research challenge to do with real estate sustainability, worth a US$1 million, to finance innovation and investigation in the sustainability area for commercial real estate.

The types of research that the RGRC programme envisages include productivity studies, large-scale predictive modelling, energy efficiency technology, data management programmes and diagnostic tools.

In the next four years CBRE will set aside the funds to finance independent academic research into sustainable real estate practices.

A BOX TO PONDER ON

Between the Frontiers – thoughts on life, love and death One of Portugal’s foremost philosophical thinkers, Manuel Carmo, artist and thinker and founder of the New York-based Carmo Foundation launched his book “Caixa Para Pensar” in Lisbon in November.

Published by Babel and presented in Fnac by the President of the American Club, Anne Taylor with banker Paulo Teixeira Pinto and Mendes Castro Henriques, the boxed triple volume “Em Amor a Pirro”; “10.XXI” and “Entre Margins” is a collection of

thoughts, not clichés churned out time and time again by all and sundry, but ideas founded on experience and opinions in what is almost a manifesto for life.

renewed only in the details of discourse and never in the design of the concept. Each one of the ideas in one of the books, “Entre Margins”, each statements can lead to a multitude of reactions and According to Manuel Carmo, therefore this “Caixa Para “the Creative Act in Art is Pensar” is indeed a Pandora’s established in the domain of Box to really make you language and not in the think about what life and realm of concept.” Creation is love is all about. only possible at the language level and the adoptive Currently in Portuguese, perspective. The space and this collection of thoughttime of each glance/action provoking reflections on contain the boundaries of the life is soon to be published creative act which is always in English.

Accumulated world sales of 1 million hybrid cars The Honda Motor Co., has announced accumulated world sales of hybrid cars at 1 million units by the end of September 2012. This target was achieved almost 13 years after the start of 1st generation Honda Insight sales in Japan, in November 1999, the most economical petrol engine at the time in terms of fuel consumption.

Hybrid technology, which Honda believes will have an increasingly important role, with a view to producing all-electric cars.

The sale of these models in Portugal has already topped 6,300 units since they were introduced in 2003. Its current IMA system engine is constantly being developed so as to make the brand a world leader in fuel and energy efficiency.

Bairro Alto Hotel Best Portuguese Boutique Hotel in the World Travel Awards

The Bairro Alto Hotel picked up an award in the World Travel Awards 2012 in the Portugal’s Leading Boutique Hotel category and is the only hotel that is not in the Algarve to have been distinguished at a national level by the WTA. After having picked up a clutch of gongs in the national category, in 2009, 2010 and 2011, the Bairro Alto Hotel has once again received the distinction of ‘Portugal’s Leading Boutique Hotel’ in the most prestigious international Tourism awards. | 11

[ PA RT NE R S NEWS ]

Fitness Hut

Continues to grow and invest in Portugal Project postponements interrup anticipated recovery in shopping centres development

Portugal has suffered more than most European countries over the slowdown in the development of new shopping centres.

According to a report by Cushman & Wakefield, not one single shopping centre is slated for opening in 2012 in Portugal. Just one retail park was inaugurated this year in Portugal - Multiusos Oriente in Loures. For the next 3 years the total anticipated area of new shopping centres in Portugal stands at around 175,000m², of which just 11% were in a phase of construction, including Évora Shopping that is expected to open in the Autumn of 2013.

With regards to the investment market, 2012 was to date the first year in the past 2 decades in which no development in the retail sector was registered. The usual investors in this real estate sector – foreign institutional operators – have been absent from the national market, due to the grave economic crisis in the country which has particularly affected the performance of retail assets.

Another Fitness Hut club opened in October. Close to Saldanha and Estefânia, in Rua Visconde de Santarém, n.º 69 - in Lisbon’s Arco do Cego area. It will provide 40 new job opportunities, including for Personal Trainers as self-employed service suppliers. The company has plans to open a further 2 fitness clubs in the near future...

Hut Store - Online Fitness Hut Following the launch of the mobile version myHUT http://m. fitnesshut.pt/, Fitness Hut is now presenting a collection of fitness an casual sportswear and accessories.

Classes for all tastes and more!

Intense days, packed with fun and novelties! MOVE DAY is a package of the most important classes that are run on a daily basis at Fitness Hut clubs. From the famous LesMills classes to FITNESS HUT! classes! MOVE DAYS never forget their members, who are more gym fans than Group Classes, and who are also invited to take part in a special WOW challenge (Workout of the Week) at FIT MOVES GAMES CLUBS!

HANAMI SUSHI

0pens at Alegro Alfragide Hanami Sushi is an innovative project to offer quality traditional Japanese fusion food for its customers with a range of flavours, with fast service at affordable prices.

The new unit at Alegro Alfragide was opened on October 31st with a 95m2 GLA. Property consultants and letting agents Cushman & Wakefield have acted on behalf of Hanami Sushi in finding this excellent location for the brand and are helping to find other locations for the food outlet which is continuing to expand.

ESPART presents Edifício Ivens 31

ESPART, the Espírito Santo Group company (GES) which focuses on the development and management of real estate assets, has presented the show apartment in Edifício Ivens 31. The project, located right in the Chiado, represents a €30m investment with 40% of the apartments already sold, despite still being under construction.

Located in downtown Lisbon, Edifício Ivens 31 is the result of ESPART’s investment in urban regeneration to come up with the modernisation of one of the most prestigious buildings in the capital. Each apartment has its own unique personality: duplex apartments, apartments with gardens, unusual bearing walls and open-plan spaces right in the heart of the Chiado.

Edifício Ivens 31 has 15 apartments (1-5 bedroom room + duplex), with areas of between 150m² and 380m².

12 | Consumer Trends

LET THEM EAT CAKE! American businesswoman Julie Deffense has just published an entertaining and in-depth guide to confectioning American-style cakes and deserts.

The book, Julie’s Cakes (Os Bolos da Julie) is full of handy hints and tips on how to learn special techniques to create surprising and truly unforgettable cakes and deserts.

The book takes us on a journey through all the seasons in the year: with warm and inviting winter flavours followed by the season of flowers and strawberries and the warmth of cherry tones, closing the seasonal cycle with autumn inspired recipes with nuts, pumpkin and cinnamon.

The book contains recipes for birthday and afternoon tea cakes, sweets, deserts, fairy cakes, among many others, all very special but now within the reach of any cook.

Julie Deffense was born in the United States in 1973 and has lived in Portugal with her husband Jacques since 1998. The author perfected her technique at the Wilton School and has done countless workshops on cake decorating, believing that any person can produce fantastic cakes. Published by Editora Presença.

SHOPPING CENTRES || REAL ESTATE ASSETS

DESENVOLVIMENTO E GESTÃO DE SHOPPING CENTRES CONSULTORIA EM MODA, TENANT MIX & RETALHO COMERCIAL DESENVOLVIMENTO E PROMOÇÃO EM INVESTIMENTOS IMOBILIÁRIOS PLANEAMENTO ESTRATÉGICO, FORMAÇÃO & CONSULTORIA IMOBILIÁRIA

SHOPPING CENTRES DEVELOPMENT & MANAGEMENT FASHION, TENANT MIX, RETAIL & LEASING ADVISORY REAL ESTATE INVESTMENTS, DEVELOPMENT & PROMOTION REAL ESTATE ADVISORY, TRAINING & STRATEGIC PLANNING

knowledge. innovative. solutions.

Partner: João António R. F. Carvalho Av. No Senhora do Rosário, 629 - 5ºA 2750 - 179 Cascais - Portugal

Telemóvel: +351 939 323 789 Fax: +351 214 862 110 Mail: jacarvalho@netcabo.pt

PalpitEstratégico GESTÃO DE ATIVOS IMOBILIÁRIOS

[ BUSINE SS INT E RV IEW ]

“ In Brazil, the future is

in shopping centres for Class C and continued expansion for shopping centres for Class A. JOÃO CARVALHO | CEO, PALPITESTRATEGICO

14 | Consumer Trends

”

PalpitEstratégico, Lda

In the Brazilian Market local partners and planning are vital LUIS FIGUEIREDO | Interview

PalpitEstratégico is aimed at Real Estate Asset Management, providing expertise and consultancy services in Retail and Strategic Planning for entrepreneurs who, in these times of crisis, prefer to be represented and guided directly by a specialist, with a proven track record in the market in terms of know-how, ethics and transparency while being focused exclusively on profitability and client investment return. João Carvalho, partner and shopping centres management expert explains more.

Given the wealth of experience you’ve clocked up, what Multiplan is designing its 7th expansion for Barrashopping in Rio assets can PalpitEstratégico offer the retail market in de Janeiro, aimed at Classes A and B and is less than 300m from Portugal and Brazil?

Village Mall, a shopping centre directed towards Class A+ A proven track record, experience and professional integrity! Over the years I’ve been working in Portugal, I’ve adopted a distinct position in terms of the continual search for know-how and innovative projects. An example is the Regojo Group’s project in Braga ‘Liberdade Street Fashion’ which I heavily was involved with.

Another advantage is to know how the Brazilian market works, from the tax side of things to a current knowledge of the actual market, which is an advantage and is vital for anyone intending to invest in Brazil. The correct advice is paramount.

You recently published the book ‘A Trip round 350 Shopping Centres’ dedicated to the shopping centres market in Brazil. What did you conclude from the vast amount of research you carried out? Is it a market that international developers should invest in? How should they position themselves?

The Brazilian market should be analysed by Portuguese and international retailers and investors with preparedness before jumping in head first and investing. The truth is that the Portuguese are different from the Brazilians, both at cultural and business levels. We’ve got a shared language in common, but we haven’t got so much in common when it comes to the modus vivendi of business. The experience of having travelled around 25 of the 27 Brazilian states (excluding Roraima and Amapá which don’t have any shopping centres) and having seen 350 shopping centres has enabled me to draw interesting conclusions.

The shopping centres were evaluated according to a tick list of 50 items - these can be consulted in my book launched by Vida Imobiliária – which has exactly identified the current profile of investors and the opportunities that exist for architects, for example, who are heading for Brazil. One piece of advice that I would give is not to set out for Brazil unprepared. Success depends on partnerships with local groups, like Multiplan set up 20 years ago - Multiplan came to Portugal and formed an association with Sonae in order to build Cascaishopping. It is interesting to see the partnerships in Brazil with Sonae and Westfiel, as well as those with shopping centres that are being developed by both groups, which are relatively different to those they’ve built in their countries of origin or in countries that are more developed than Brazil. In Brazil, the future is in shopping centres for Class C and continued expansion for shopping centres for Class A. In Brazil

shoppers. Despite having been built in a suburb of Rio de Janeiro, it is actually a Class C shopping centre with a Class B level. All this shows a constant concern for excellence!

What’s your opinion on the renegotiations that operators are seeking to remain in business? Do you think they should suspend fixed rents and practise variable rents?

I’ve always been in favour of the fair profit concept and right now that’s the concept that operators and shop owners should adopt.

There have to be sacrifices on both sides and transparency. People have already earned lots of money, both shop keepers and developers. It’s vital to renegotiate the model that Mulitplan set up in 1991 in Cascaishopping. Today there are shop keepers, who even though they are literally paying ZERO rent (and not the usual Variable Rent of 8%) can’t pay the common overheads because they’re selling so little. How can you negotiate this if one of the parties has responsibilities to a third party - the developer - and the other hasn’t got the money to pay the rent, suppliers, salaries and taxes? That’s the real challenge. Swapping one shop keeper for another is also not the ideal solution since the investment from the shop keeper is high, but the developer also can’t help. It’s time for there to be specific short-term agreements - maximum 6 months - and for there to be weekly appraisals. In the beginning there might not be any kind of rent except the payment of shared expenses by the shop keepers.

What is your view of the retail market in Portugal?

Before the crisis the market was mature but now we’re seeing retailers pulling back and stagnation in the internationalisation process. The time has come to seriously think about cutting costs.

The big shopping centre players should concentrate on carrying out proper operational audits on absent professionals, and take into account the reduction in costs at the level of common expenses and marketing, trying to obtain merchandising gains, so as to partially compensate for revenues from shop keepers that are being affected by this crisis. Today people are no longer talking about the retail market in Portugal being saturated. Now the situation is more critical, without room for new projects, unless they are ones that are already linked to city centrerehabilitation and regeneration.

However, what is being done in Praça do Comércio in Lisbon, for example, is not an example of what cities really need right now.  | 15

[ PA RT NE R S FE AT U R E ]

DOWNSIZING THE SOCIAL STATE

CAN PORTUGAL’S HEALTH AND WELFARE SYSTEM SURVIVE? CHRIS GRAEME | Editor

A specialised team in defining the functions and extent of the State, made up of the International Monetary Fund, the World Bank and European Commission is advising the Government on how to scale back the Portuguese welfare state. How much is too much state interference and can the social legacy of April 25th1974 survive?

In a climate of United States and Western European Depression, increasing fiscal austerity and unpredictable financial markets, the sustainability of even the strongest welfare states has been called into question in recent years. The problem had, in truth, been identified as far back as the 1970s when demographic experts and sociologists warned that when the baby boom generation of the 1960s reached retirement age, given a subsequent fall in the birth rate since the 1980s, there wouldn’t be enough members of the active working population to sustain a huge elderly population and all of the inherent health issues that that entailed.

Since the 1980s, Portugal’s social democracy has succeeded in creating a comprehensive welfare state that provides a basic and solid social security, pension, health and education service from the ‘cradle to the grave’. It turned Portugal from a country where only the rich had access to good education, health and welfare into a largely social egalitarian society. However the degree and necessary adaptation of the modern welfare state, modelled on examples in the United Kingdom and Sweden, are now under threat.

In October, with spiralling unemployment rates at around 16% (23 per cent in some regions like the Algarve), falling tax revenues from a reduction in consumer demand and record company closures, some commentators warned that Portugal’s social security system would be bankrupt within 3 years if drastic 16 | Investments

reforms were not undertaken. Putting it blatantly, Portuguese national insurance contributions (Segurança Social) are already not enough to pay state pensions and other responsibilities. According to Eurostat accounts, in 2010 SS receipts stood at €21 billion, but expenses

Funds at Social Security offices are liable to run out within 3 years

outstripped that at €37.7 billion. In fact Portugal’s failure to adequately deal with its bloated budget deficit, despite painful austerity measures and the most serious tax hikes in living memory, stems directly from the huge black hole in SS accounts.

Successive governments, including the PS José Sócrates administration and this PSD-CDS coalition have hid the extent of the problem by creative accounting and transferring money from the State Budget directly to cover the public debt.

The problem now, which has existed since March 2011 when the Government was forced to seek outside help in the form of the bailout, is that no one will lend the Portuguese State more money which is faced with successive unsustainable debt

situations: Madeira, the public transport system, the local municipal councils and public-run companies.

Take the pension system, for example. The average pension in 2011 was €409 a month.

Even this modest amount left the pensions system with a deficit of €2.4 billion. Cuts in holiday subsidy payments for 2012 reduced pensions by €1 billion which corresponded to 40% of the deficit in 2011. Even so, at the current rate, in order to balance the pensions deficit it would require cuts in the region of 3 months pension at the current rate.

To make Portugal’s welfare system sustainable, pensions would have to be reduced by one-third, and the age of retirement would have to be raised to 70.

Welfare in most European countries is clearly out-of-control when balanced against GDP earnings and the Portuguese government faces tough choices while understanding that it cannot undermine those most in need in society.

As far back as the José Sócrates administrations prior to 2011, government advisors have been warning that radical strategies are needed to reform the welfare state with the underpinning principle that it will always be there for people with genuine need and that principle must be clearly spelled out in any PSD-CDS coalition government reform or ‘refounding’ bill.

Historically, the centre-left PS socialist party was the chief architect of the

“

To make Portugal’s welfare system sustainable, pensions would have to be reduced by one-third, and the age of retirement would have to be raised to 70.

Portuguese welfare state — including the SNS (Portuguese National Health Service) founded by António Arnaut. It arose out of the social problems stemming from the end of the Estado Novo and the 1974 Revolution, problems related to poverty which were the primary catalysts for the expansion of basic welfare provisions in the 1980s which largely took over from the roles that had been hitherto played by religious institutions like Santa Casa da Misericórdia and the Catholic Church in Portugal.

The PS party at that time saw the welfare system as a way of transforming a largely agrarian and textile economy into a more equitable and progressive society. So, the PS party and subsequently the centre-right PSD party expanded the public sector, particularly to offer jobs in the public administration following the crisis of the ‘returnees’ — the hundreds of thousands of refugees forced to flee their businesses and homes in former Portuguese colonies following nearly two decades of civil war in Angola, Mozambique, Guinea Bissau, and Portuguese India (Goa).

This ideological framework was subsequently encouraged by the two main political parties which had created an overblown and costly bureaucracy and client-based ‘nanny’ state as they competed for popular support amongst the electorate and sector lobbies which subsequently facilitated the preservation and expansion of the welfare state.

However, from the 1990s, particularly from

the 1998 recession onwards, the Portuguese welfare state has been challenged by financial pressure as Portugal’s GDP growth rates plummeted from the heady 6% enjoyed in the 1960s to an average of barely 2 per cent in the last two decades.

Economists and politicians on the right have been arguing since the millennium for a less paternalistic and more efficient system of delivery based on the premise that public welfare provision entities should be run like private companies, preferably in Public-Private Partnerships.

It was an experiment that had been widely employed under the John Major and Tony Blair governments in the United Kingdom with mixed results and widespread accusations that consultants and private companies had been just as wasteful by creating an enormous management class of ‘fat cat’ mandarins than the old public-run sector had been.

And at the same time that arguments abound that welfare states in Western Europe need to be scaled down, the United States under the Democrats seems to be going in the opposite

direction by actually expanding health care provision. Either way, ensuring that the system is sustainable has required some very difficult decisions — such as limiting the contributory unemployment benefit allowance and the amount of unemployment paid out in relation to the number of years of service.

”

In Portugal the news channels and papers have been dominated recently by an “imminent restructuring” of the social state which actually has little to do with this or that minister but everything to do with the current austerity policies. The more immediate political background to this Portuguese ‘perestroika’ was when Vítor Gaspar, widely praised abroad as a serious financial disciplinarian, invited the IMF and the World Bank to Portugal in October to “define the social functions of the State.”

Technical specialists are said to be already working on the problem in Lisbon while the opposition PS socialist party leader, while making loud noises before television cameras, has cleverly avoided making a committed stand one way or the other.

In what could test the legal limits of Portugal’s constitution, the specialists, who have on board representatives from the European Commission and European Central Bank are supposedly working outside the scope of the Troika.

In Parliament, the prime minister told MPs that “the State should only do what it does well and should do what we cannot do much better because only it has the responsibility to provide,” he said after having spoken about “re-working” the Memorandum of Understanding with the Troika at the closure of PSD and CDS party political conferences. Passos Coelho sent a letter to the PS inviting it to take part in this reworking project citing that even opposition leader, António José Seguro, had an interest in Portugal having a balanced accounts sheet for next decade.

Reworking the Memorandum (i.e. rescheduling payments and deadlines) and discussing the scope of the social welfare state in Portugal and its reform sparked an immediate negative response from Seguro who nevertheless agreed to meet to discuss the issue when possible.

“The PS is not prepared to help the | 17

[ PA RT NE R S FE AT U R E ] Government but is willing to help the country” he cleverly replied through one of his economic advisors. What is likely to take place soon from the work of this team of ‘specialists’ who remained in Lisbon until November 6th is the publication of a report.

costs of cancer, HIV and diabetes drugs were making the system financially unsustainable.

But sounds emerging from the Government now look frighteningly like the ‘safe in our hands’ affirmation may no longer be the case. At a more recent The report may suggest the privatisation of ICPT luncheon the socialist economist the way the welfare system in Portugal is Dr. Artur Baptista da Silva warned run, while remaining overall in the control that dismantling the social state risked of Government hands. But there are lessons dismantling democracy itself. “Without that need to be looked at here from the the social state there is no democracy” he experiences of other countries which said. And the PS party have already told attempted to reform their welfare states.

In Sweden, for example, a similar report showed that distinctive class and gender differences emerged due to the privatisation of welfare services. Severe financial and health problems coupled with lower wages markedly impacted labourers and women.

Furthermore - and we are already seeing this happening in Portugal because of the crisis - mental illness and insecurity increased among younger citizens.

People born outside of the country in question already face poorer prospects in health, employment, income, and political resources when compared to the locals.

In Portugal higher hospital treatment fees and patient financing of medical care is likely to increase significantly in childcare, elderly care, pharmaceuticals — now being illegally sold on to markets where higher prices can be commanded — and dental care, which will adversely impact

the Government not to count on them to review the Portuguese Constitution in order to “destroy the welfare state.”

But Pedro Passos Coelho’s PSD/CDS coalition government is now caught between a rock and a hard place. Falling revenues from taxes and national insurance contributions and spiralling unemployment benefit claimants have pushed the deficit higher than either it or the Troika would like. (5% of GDP target for 2013 according to the Government and 5.8% realistic figure according to the IMF).

The result is that the Government has to make further cuts to the State in order to make savings in the region of €4 billion – a figure that finance minister Vítor Gaspar promised the Troika at its last review.

“Safe in our hands” – but for how long?

Health Minister Paulo Macedo.

lower socioeconomic groups so they are less able to access services.

Past reports have found and this was true of the United Kingdom — that there was a trend towards decentralisation, market orientation, and user-financing that had problematic consequences for social egalitarianism. At the International Club of Portugal earlier this year the health minister Paulo Macedo said that the Portuguese National Health System was safe in the Government’s hands and there was no question of privatising it.

On the other hand he admitted that the 18 | Investments

Now socialist leaders are at pains to stress that this is not the agreement they signed up to when Portugal grudgingly agreed to a 70 billion euro rescue bailout from international organisations. On the other hand the opposition PS party is also caught between the Devil and deep blue sea. It risks a serious conflict with the unions and its other partners.

João Proença, a socialist union leader, was quoted in early November as remarking: “It would be suicide for the PS party to discuss the future of the welfare state through the lens of cuts. What makes more sense is to do negotiate on the basis of the future sustainability of Portugal’s social security system.” Both the Swedish and United Kingdom cases show that reforms, even in the strongest welfare states, can result in decreasing social egalitarianism for

vulnerable groups. They showed that welfare service reforms, a function of capitalism, have been unravelling the functions of capitalism, have been unravelling the achievements of welfare states.

And what the widespread demonstration on September 15th and subsequent unrest showed in Portugal is that increasingly unequal results will have a greater impact on social cohesion and a further deterioration on the welfare state and has the potential, even in a normally pacific country like Portugal, to completely wreck the system and lead to violent outbursts. A lot depends now on what the Portuguese middle class does and how it reacts to the proposed downsizing of the welfare state. Already many in the middle class have private health insurance, make considerable sacrifices to send their children to private schools and have paid into additional unemployment insurance and pension schemes.

But as the tax burden increases and hits the middle class in its pocket, making it difficult to fork out for all these private schemes, the Government’s plans may unravel and it could have to backtrack. On the other hand, if the middle class continues to remain fairly peaceful and compliant in its vocal protests, then, as Dr. Artur Baptista da Silva pointed out in November, the core of the social democratic welfare state will fundamentally change completely away from welfare provision.

If the Portuguese still believe in the hardwon rights they fought for in the April 25th Revolution in 1974, then it is still possible for Portugal to amend or redesign its welfare service and health policies to better and more realistically meet the needs of the population and reclaim its position as a modern welfare state even in times of austerity and change. The question is how the Government is going to convince citizens that they may have to fork out more for an education, a welfare system and a health service.

One way would be to force all taxpayers to sign up to a government-backed universal welfare insurance plan covering these three aspects. It could be graduated whereby those who earn more pay more for what would, in essence be an additional tax and could be operated in partnership with the private system, as in the case of healthcare for example.

But the population would have to be convinced that they were getting value and good service for its money. At the moment the state school system is considered poor while Portugal’s healthcare infrastructure, in terms of hospitals, is woefully outdated and inadequate to meet the needs of the 21st century. So far the Government has

The Ministry of Employment and Social Security is under grey skies these days

not come up with any concrete details on how it intends to reform the welfare state in Portugal and the PS opposition government has widely stated that it will not “close the door” on brokering a deal but will not “present any suggestions until it knows the Government’s plans”.

But those on the left and right need to ask some serious questions and a clear distinction has to be maintained between the means and the ends of welfare policy. In order to provide adequate universal pension coverage, for example, new partnerships between private and the public sector will have to be necessary.

In order to provide universal health care and modernise hospitals, the public will necessarily need to pay more for health provision and the role of the private sector will undoubtedly take a greater role than it does now.

What research has shown time and time again is that the Portuguese are among those in Europe who attach most importance to the functions of the welfare state but are least prepared to pay more taxes to sustain it.

Old age, sickness and childhood are the three areas that the Portuguese believe must be up to the State to provide. “Our country is among a group of those which attaches greatest importance to the welfare state yet in countries like Portugal in which the State is weaker and poorer, people demand more from the system,” explains Jorge Vala, the National Coordinator of the European Social Survey. According to the Institute of Social Sciences (ICS) researcher, “people’s expectations are higher than ever now in times of crisis at a time when many economists are attempting to show that the destruction of the welfare state in Portugal is inevitable.”

The present government, with a little help from international organisations like the IMF, World Bank and ECB looks set to embark on a programme of welfare reform, with the reworking of the Portuguese welfare state set to begin by 2014 with a reduction in social support and services in health, education, social security, defence, security and justice.

And as the IMF’s new Portugal Head-of-Mission, Abel Salassie, admitted recently that “most of the fat has been cut away” from Portugal’s bureaucracy, now the focus is on a reduction in State expenditure in sensitive sectors such as social spending and education where more than 70% of all State expenditure goes on education, welfare and health payments.

Only time will tell how well it succeeds in implementing what, until a few years ago, was politically unspeakable if not unthinkable and if the public ultimately consents.  | 19

[ PA RT NE R S OPINION ]

SOFT LAW A CHARACTERISTIC OF THE PORTUGUESE LEGAL SYSTEM? JOÃO COSTA QUINTA | Lawyer, Partner of ABBC & ASSOCIADOS

The entire Portuguese legal system through the courts needs to be totally reformed as this, as much as the current economic crisis, is what is really killing Portuguese business argues lawyer João Costa Quinta.

O

ne of the first lessons at the Faculty of Law is normally dedicated to the notion of Law. That question is usually framed: What is Law’? The answer is that Law consists of “a number of norms governing social conduct, with the view of establishing Justice, Peace, and the Common Good, generally endowed and imposed by force, when necessary and possible.”

(Professor Galvão Telles, in his Introduction to the Study of Law, Volume I, Page. 27).

Since Law is defined as a number of norms, it is natural that next there should be an analysis of these actual norms and, in particular, an analysis of those characteristics that should be present in a norm so that it can be considered a norm or rule (of a judicial) nature. So what are these characteristics? There are essentially 3, which are as follows: (i) Generality; (ii) Abstraction; (iii) Coercibility.

In this context, the last characteristic is of particular interest to us: coercibility. Coercibility as a judicial norm means, widely speaking, the susceptibility of a norm, in the case of it not being respected, of it being able to be imposed by force, with resource to the police that the State provides.

But on a par with these norms or rules - which form part of what, in Anglo-Saxon countries is normally termed Hard Law (Dura Lex) - exist others that are devoid of this last characteristic we’ve mentioned (Coercibility) and which, for this exact reason, is designated as Soft Law (Mollis Lex).

In a nutshell, Soft Law rules are those that, despite introducing certain parameters of conduct on individuals or organisations (in a similar way to what happens with all rules of a legal nature which form Hard Law), are devoid of any judicial sanction, ending up by being translated simply into mere recommendations. Think, for example, internationally about the case of recommendations issued by the United Nations organisation or, nationally, about the case of recommendations aimed at the market by the Portuguese market watchdog, the Portuguese Securities Commission (CMVM).

Knowing full well that a disrespect for these mere recommendations does not convolve the application of any sanction of a judicial nature (different are economic and political sanctions, etc.).

This distinction is valid when it comes to the current state of Portuguese justice. According to news that has recently filled the front pages of various newspapers in Portugal, one of the most serious problems felt by Portuguese entrepreneurs has to do with the

20 | Consumer Trends

inefficiency and sluggishness of the legal system. The situation is so serious, that, according to a recent survey (carried out by the Lisbon Commercial Association (ACL), the National Statistics Institute (INE) and the Francisco Manuel dos Santos Foundation), Portuguese entrepreneurs consider that the slowness and inefficiency of the justice system prejudices the development of their businesses more than the difficulties in getting access to credit loans.

All this, it should be noted, in particularly difficult economic circumstances and times of greatest difficulty for Portuguese companies trying to get financing, namely from the banks. The slowness and inefficiency of justice is an obstacle that is so serious for Portuguese business leaders that, in the survey mentioned, it is only overshadowed by one factor (the economic crisis), which is particularly telling as to the depths of discredit and disbelief in which the legal system in Portugal has fallen.

A common opinion not only among business leaders but also for the public in general who believe that Justice in Portugal is slow or even simply doesn’t work. How many people avoid at all costs having to fight for their rights before a court because they fear that the litigation will turn into a never-ending process with no end in sight?

Cases in which legal cases drag on and on in the Portuguese courts for years and years and even decades are not few; in which the courts are unable to bring litigation to a conclusion.

And we’re not talking here about the sensational cases, indeed these, perhaps because of pressure from the media, end up, by hook or by crook, being brought to a conclusion.

Rather we’re talking about common cases that affect companies and citizens on a daily basis. We’re referring to the simple act of collecting debts or the act of eviction. We mean cases whereby the length of time it takes to get a court decision is so lengthy that the length of time itself means a denial of Justice. Indeed when the final decision is handed down, very often a part or all of the useful effect that was intended to be gained is lost. Finally, we’re talking about cases in which the courts can’t, in a word, coercively apply judicial norms.

I hope we can find a way that will enable us to eliminate, or at least reduce, the inefficiency of our judicial system. In the case we can’t, the most probable outcome is that in the Faculty of Law they will some day begin teaching that coercibility is not, finally, an essential characteristic of judicial norms and that our entire judicial system is merely made up of Soft Law rules. 

| 21

[ BUSINE SS R E P ORT ]

“ We’re dedicated to making the Algarve a year-round tourist destination...

JOACHIM HARTL | General Director, CONRAD ALGARVE

22 | Consumer Trends

”

Conrad Algarve

The Luxury of Being Yourself LUIS FIGUEIREDO | Interview

The Conrad Algarve resort has opened, offering clients contemporary luxury in a charming setting. With a packed schedule of events, it aims to become an all-yearround social hub says Joachim Hartl, Conrad Algarve General Director.

Conrad Algarve is now open. Tell us about the Conrad brand, concept, positioning and what key differences it can bring to the Algarve?

This resort will introduce a new standard of contemporary luxury and personalised service to the Algarve, Portugal and Europe. There is significant demand for luxury accommodation here and the Algarve is a popular winter sun destination for many international travellers. The 154-room property evokes a sense of place, from the 18th Century Portuguese palace design, to the local ingredients used in the spa and extensive cuisine on offer. Conrad Algarve guarantees a tailor-made retreat experience with a discreet yet engaging service in a contemporary setting. We would also like to attract local residents and become a social hub locally through Conrad Algarve services like ‘Gusto by Heinz Restaurant’ and ‘Conrad Spa’.

guests to enjoy fresh food inspired by a rich Portuguese culinary heritage, whilst the South American-inspired ‘Dado’ provides a lively setting with private dining pods and an extensive cocktail menu. Guests can also enjoy the poolside ‘Sereno’ for seasonal fresh fruit and handmade ice creams or choose the sports bar, ‘Tempo’ for a refreshing drink. Children are also important for us, because this resort is perfect for families. Conrad Algarve features a specially created children’s activity menu designed by children, for children. The ‘Little C Palace’ children’s club is suitable for children aged 3 to 12 and offers a bespoke holiday for younger guests with a variety of activities to choose from including treasure hunts, baby yoga and mock-tail making.

What exclusive services do you have planned for the corporate segment?

With the opening of Conrad Algarve what really innovative With regards to corporate clients, Conrad Algarve with its natural experiences can your customers enjoy? surroundings, innovative facilities and flawless services provides With the contemporary, luxurious and natural surroundings, guests will instantly know that they are somewhere special: their room will be modern, spacious and comfortable and services will be attuned to needs. Everything will be taken care of in order for them to have a great stay. This is the true experience of Conrad Algarve - a tailormade experience based on the concept ‘The Luxury of Being Yourself’.

Conrad Algarve is more than a hotel, because of its unique location and history, magnificent interior décor and packed programme of events throughout the year. What unique activities will you are running?

Conrad Algarve guests will enjoy several luxury experiences based on the Conrad brand concept: ‘The Luxury of Being Yourself’.

Service is bespoke to all guests, from favourite wines to customised relaxation and rejuvenation in the Conrad Spa. The Conrad service is discreet yet engaging and flawless. This experience also extends to young visitors, with a children’s menu and activity plan designed by children for children. The spa is a sanctuary in which to enjoy The Luxury of Being Yourself in the hotel. It offers a memorable Spa Experience where guests can enjoy personalised treatments designed specifically to suit their mood and needs on the day. The treatments have been specially created by Aromatherapy Associates and uses local, natural ingredients. Outdoor treatment cabanas offer an ‘al fresco’ style of Portuguese living. Conrad Algarve’s cuisine is world-class, featuring 6 individual dining experiences, all of which incorporate local flavour and ingredients and international aspects. A key gastro feature at the hotel is ‘Gusto by Heinz Beck’, overseen by the multi-Michelin star chef and named after Conrad Hilton’s father, Augustus - ´Gus´, who was born in Norway, inspired by Nordic design and the name Gusto. The chic ‘Lago Lounge’ offers stylish indoor and outdoor areas serving the very best champagne, classic cocktails and Sri Lankan teas. The modern Portuguese cuisine at the ‘Louro’ restaurant encourages

the perfect conditions to host events and meetings. Conrad Algarve’s events spaces are dynamic and flexible with one ballroom (300 m²) with panoramic views and private access to the gardens and 6 other rooms (between 19 m² and 120 m²) with access to private terraces, all equipped with state-of-the-art audio visual technology. Conrad Algarve will appoint a dedicated host to ensure that the events and meetings run smoothly. From the initial consultation to the last guest leaving, every step will be followed through with support and assistance. Conrad Algarve will provide outside catering services in the gardens, on the terraces and in the pool area. We’ve just opened and hosted two important events: Quinta Properties and the World Travel Awards - both major and important events which were very successful.

Golf tourism demand is quite strong in the Algarve. What services and/or activities will Conrad Algarve offer?

Conrad Algarve occupies a prime spot, close to many world-class golf courses; therefore golf is important for us. Conrad Algarve provides a total service focused on this sport with a golf concierge facility to create the very best golfing break exclusively for guests, taking advantage of some of the Algarve’s prestigious and highly regarded golf courses. Recently, we launched an exclusive service for Golf Pros where we offer accommodation, including breakfast and complimentary green fees for golf professionals that are staying at the hotel for a minimum of 6 paying customers.

What are your expectations for the first year of opening?

Our expectation for the first year is to consolidate our presence and publicise our unique luxury concept ‘The Luxury of Being Yourself’.

We’re dedicated to making the Algarve a year-round tourist destination, not just for the summer months. Besides established UK, German, Spanish and Portuguese markets, we also want to capture markets like the Middle East, Angola, Russia and Brazil. | 23

[ PA RT NE R S OPINION ]

Well worth working and

STAYING HOPEFUL! ANTÓNIO SAMPAIO DE MATTOS | President, PORTUGUESE SHOPPING CENTRES ASSOCIATION (APCC)

Ever the optimist, the president of the Portuguese Council of Shopping Centres, António Sampaio de Mattos believes there are no quick fix ways out from the current economic crisis Portugal is facing other than the difficult road the Government is taking.

We must continue to work towards the recovery that will come, eventually.

W

e are daily bombarded with a wide variety of news, invariably bad, on the economic difficulties that our country is going through, and along with it, the drama of unemployment which so deeply affects people either directly or indirectly.

In another way these difficult times we’re living in also affects those that do have work or are living on their pensions, and who now realise from the discussions about the State Budget for 2013, that the successive tax hikes and reductions in benefits on the Portuguese, more than the Government lets on, will overwhelmingly affect their disposable income.

Which is why 2013 will be a hard one, demanding a great sacrifice and deftness in the art of juggling and controlling budgets, at personal, family and company levels and even in terms of public finances.The problem of living with less money cuts right across society, and doesn’t just affect some.

Therefore, it is on the side of national governance that the most complex balancing acts will have to be made — some which have already broken down — and the success of that management will depend on our capacity, as a people, to overcome adversities. But I fully believe that we’ll succeed, just like we’ve succeeded so many times in the past.

These balances which have deteriorated are daily stirred up by some social partners with responsibilities for

24 | Consumer Trends

“

The shopping centres sector in Portugal today holds out an excellent opportunity for investment at all levels, in terms of the growth of real estate fund asset portfolios and the entry of new international brands...

”

maintaining social peace, who now more than ever should be vital, but are ideologically trapped to a past which has failed and is decrepit, but through the actions of the party and union machine are well oiled and evidently gain force in moments of crisis, stoking up social demonstrations against the Government.

share a responsibility for the situation in which we’re in, and who have been at the helm of the direction in which this country is heading in recent years, seem to have been affected by a kind of selective and temporary amnesia.

I can only find an explanation for this pathology, in the fever for getting back On the other hand, I have some difficulty, into power, but also, and for various but despite it all understand that the reasons, one of which has clearly to do ordinary man and woman in the street, with leadership (or lack of it), not even not linked to party and union movements, this opposition know how to, in a are suffering, in some cases, dramatic constructive way, come up with viable situations because of unemployment, alternative solutions. taking extreme lines and are taken in by speeches from extremists.

People need to know that the Government has been, since the very But I have a greater difficulty in day that it took office, under an understanding the stance from the many enormous pressure from all sides and in commentators and some professionals in all forms, in terms of outside pressure, the media that state the easy, the obvious on the part of our creditors and and the popular opinion, because it suits partners in the European Union, and them to be on the side of the “good guys” internally, not just from the different against the “baddies.” blocks of economic, political and social life, but also from within the actual Here I am forced to point out that you coalition government itself. don’t have to be a specialist in press affairs to understand that, often, this Admittedly things are anything but easy. media hype has little to do with facts, Without just defending anyone, since and a lot to do with audiences or with we’re all responsible, I remember when veiled interests (or not even that), this country was a lot closer to the abyss although one should never forget in the in the past, and today, we’re further from case of journalists, that these are subject the edge, because of the confidence that to a strict control of conduct and ethics. we have meanwhile managed to win, and that word ‘confidence’ is the key here.

“People need to know that the Government has been, since the very Our commitments with outside entities day that it took office, under an that have been financing us, are, for this enormous pressure from all sides and in reason, a point of honour that we have to all forms....” But what I really can’t fulfil, knowing the path we have to take understand, is how some of those who to do so. And it is in this particular

aspect, and as it happens the most important, that all the confidence that we should deserve, is based. We’ve known from the start that austerity is the only possible road to take. But if there are alternatives, has anyone come up with and justified them?

The shopping centres sector in Portugal, has, in our opinion, overcome the lowest point, having seen in the last few months a recovery in levels of footfall and sales.

We shouldn’t forget that, despite all the contingencies that are affecting the purchasing power of the Portuguese, this industry had known how to adapt to new market and consumer circumstances, through permanent negotiations between shop keepers and shopping centre managers, which has enabled a take-up rate in shopping centres associated with the APCC (The Portuguese Council of Shopping Centres) to be above 95%.

I should add that the shopping centres sector in Portugal today holds out an excellent opportunity for investment at all levels, in terms of the growth of real estate fund asset portfolios and the entry of new international brands and retail chain companies into our market.

Those who know how to position themselves in this difficult period, seizing the moment, will be better prepared for the next economic cycle which will almost certainly be growth.For all these reasons, I am strongly convinced that it is worthwhile working and being hopeful. | 25

[ BUSINE SS INT E RV IEW ]

Alegro Setúbal

TRANSFORMING THE GATEWAY TO THE CITY LUIS FIGUEIREDO | Interview

“ The concept created by us at Alegro Setúbal is WELL BEING which is closely tied up with Immochan’s new image...

”

MÁRIO COSTA | General Manager, IMMOCHAN

26 | Consumer Trends

Alegro Setúbal will be the first commercial and retail shopping centre for the Setúbal region. Providing a unique leisure and well being experience tailored for the rich diversity of locals and foreign visitors alike, the Immochan development promises to transform the gateway to the city. Immochan’s General Manager, Mário Costa, explains why.

Work is only now starting on the Alegro project in improve the landscape but will also offer the Setubalenses a Setúbal which the local population has been expecting for lifestyle area in the City. a long time. Why has it taken so long?

When did work begin and when will Alegro Setúbal We’ve been focusing our energies and resources for the past 2 open? Who is the project for and what is its core concept? years on the project’s size and there has been no delay in terms of local planning permission and authorisation.

In November we’ll start work on the shopping centre itself and I can confirm that the project was passed in record time thanks to the teams at Setúbal Municipal Council who have been helping in every step of the way.

Why is Setúbal Muncipal Council so keen on the project?

The council always wanted to improve the city’s gateway, where there is already a Jumbo hypermarket, by removing all of the existing tarmac and concrete to create an accessible green area.

We’ve designed a project for the areas surrounding the future Alegro in Setúbal with a landscaped garden area outside at street level.

Equally, we’ll set out avenues with direct entrance access to the shopping centre, cycle lanes, a green area which will have playing fields, an amphitheatre for outside events, leisure spaces, children’s playgrounds and climbing walls, all of which meet today’s challenges and take into account the diverse nature of our customers. Regenerating this entire urban area will not only

Work started in November and opening is slated for the end of 2014. It’s aimed at various segments of the population. Firstly, the Setubalenses, which didn’t have any modern retail facilities within the borough, except the Jumbo hypermarket and Jumbo Shopping Gallery which is the most visited retail outlet in the region. By transforming the current Jumbo Gallery into Alegro Shopping Centre we’ll be able to double the affluence of this commercial area and offer the population the choice of shopping in Setúbal.

How large will the Alegro Setúbal shopping centre be and what is its catchment?

Alegro Setúbal will be the largest shopping centre in the area within easy reach of 138,000 people in a total catchment area of 320,000 people. The Setúbal Peninsula enjoys vigorous population growth rates that are above the national average.

We’ll be offering people living on the outskirts of Setúbal, the opportunity to shop there easily. I’m talking about around | 27

[ BUSINE SS INT E RV IEW ]

270,000 people within a 0 to 20 minute distance from Alegro Setúbal who will find a different kind of retail and leisure experience to attract them.

What are the other advantages of having a shopping centre in this particular region?

The Setúbal peninsula area is very self contained all-year-round but enjoys seasonal tourism peaks at resorts like Troia. We’re also expecting interest from foreign visitors, particularly the Spanish from the Estremadura region who can easily reach the beaches of Setubal in one day. The local region offers the Serra da Arrábida Natural Park, the surrounding beaches, the tourist activities, the only family of estuary dolphins in Europe and a rich regional cuisine.

Can you explain the Alegro brand concept you are creating in Setúbal?

The concept created by us at Alegro Setúbal is WELL BEING which is closely tied up with Immochan’s new image and is the message that we want to transmit to our Stakeholders.

We’re presenting commercial spaces with a special atmosphere and life. It is a universal concept aimed at all types of customers, enabling families to get together, stroll around and discover what they need. It will be a place where our customers can have fun, feel good and experience new things.

Our project, because of its excellent location, will be the 28 | Consumer Trends

gateway to the city, where our brand values and signature will be highly visible.

What can you tell us about the building itself, its design and function?

Alegro Setúbal is defined by dynamic and cosmopolitan architecture created by Sua Kay Arquitetos. Although a commercial space, it is also a social area for our customers where they can break their routine and enjoy a pleasurable and satisfying experience in a safe and secure environment. There will be a strong and fluid interlink between the inside and outside areas of the shopping centre via the many entrances while the food court terrace will have the breathtaking Serra da Arrábida as its backdrop.

The whole concept of garden areas, playgrounds, restaurants zone with private areas has been created to be enjoyed all-year-round in the terrace. Inside there will be 41,200m2 GLA on three floors, 17,000m2 will be for the Jumbo hypermarket. There will be 115 shops, 20 restaurants, 10 innovative cinema halls and a gym offering water sports.

What has been created at Alegro Setúbal for Well Being?

Various rest areas have been created which will have outdoor access and splendid views. There will be smokers’ areas and we’ve also created squares or living spaces where people can sit

and enjoy daily dynamic activities, including customer interactive workshops.

What is the project’s investment and which brands have you signed up so far?

The investment is 70 million euros and the existing Gallery and hypermarket will remain open throughout the works. This hypermarket is Auchan’s third most important in Portugal in terms of sales turnover. Locally the project will create 1,000 direct and 500 indirect jobs. For the next 2 years until the project is completed we have a 75% occupation rate from brands that have already signed up and others are in negotiations. So far we’ll have Jumbo, Box, HM, Cinema City, McDonalds and a Health Club.

For the food court we’re contacting theme restaurants to create a wide diversity of food outlets. Our main anchor, however, will be Jumbo which already has a loyal customer base.

What is your aim with regards to the overall commercial mix?

In terms of the retail mix we aim to meet local needs. With Well Being an ever present concept, we want to create a space which has a good through flow. We’re also concerned at getting the price mix right with products to meet all pockets.

Do you think traditional retailers will feel threatened by such a large shopping and leisure centre?

With regards to Setúbal’s traditional trade, we will launch a partnership with the Municipal Council on a commercial campaign to invite the local shop keepers to enjoy our projects helping them in modernize and update their business, a long-standing Immochan practice which has enjoyed a number of success stories. On an international level we’ve had a lot of success with local brands that we’ve helped in Eastern Europe and there have been cases which went international.

Will there be scope for future expansion at Alegro Setúbal? When will this project mature?

Our size will meet the commercial potential for the city and the project’s catchment area. However the Local Development Plan is under review and will allow for a larger building capacity than the current one. In future, if we need to expand we can do so. The project will mature quickly, without clashing with the areas of influence of other shopping centres and don’t forget that this is a city which currently doesn’t have this kind of commercial and leisure facility.

Our goal is to duplicate the current number of visitors to the existing Jumbo Commercial Gallery, presently standing at 4 million. I think we’ll achieve 8 million visitors within a short period of time after opening. We’ll have an enormous underground free parking facility for 2,600 vehicles on 5 levels, all with street level access. Alegro Setúbal will be more than a mere shopping centre; we’re going to transform the city’s existing image.  | 29

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REBRANDING Immochan

Immochan, the Real Estate company of Auchan Group, is a successful international shopping centre developer and management company that puts people at the centre of its core philosophy. With a new logotype which reflects the group’s values, Mário Costa, Portugal general manager explains the philosophy behind the new image and its first appraisal for 2012.

Immochan has unveiled a new visual identity and revealed what’s new from the company and the key path it has taken in developing the brand.

With results that are healthy and financially positive, Immochan has continued its expansion in Portugal and internationally – a position that reaffirms the company’s overall global values. With regards to the Immochan brand – which has been present in the market for 20 years and which managed the Auchan brand shopping centres – became an autonomous and independent company in 1995.

Immochan has spread into various countries and arrived in Portugal in 2005, at a time when the real estate market had reached its peak. So, Immochan acquired Auchan sites for 30 | Consumer Trends

extensions and redevelopment. In 2007, Alegro Alfragide was opened, in 2008 Alegro Castelo Branco, in 2010, the Maia Commercial Gallery was modernised and in 2011 the Famalicão Commercial Gallery was extended and refurbished. Alegro Setúbal is slated to open at the end of 2014.

current property portfolio, is today placed internationally as the largest property holder present in Portugal.

In the first half of 2012 it consolidated its international position. In Hungary, Immochan acquired 7 shopping centres from the Louis Delaize Group, making it the Currently Immochan is in 12 largest developer in the north and countries where it manages 328 east of the country. In Romania, a commercial malls in a total area new subsidiary was created, with the covering 1.8 million m2 with receipts launch of 2 main commercial malls topping 17.3%, attaining a business in Bucharest and Brasov. In Italy it turnover of €295 million in the first purchased a 49% stake in Galeria half of 2012.

Commerciali Italia (GCI), from Simon Property, which enabled In Portugal it manages 43,315 m2 Immochan to acquire 100% of its GLA, with 342 shops in shopping subsidiary and continue its centres and commercial malls. In development in that country. recent years Immochan was the target of extensive development, and given its For Immochan 2012 was marked by

the inauguration of 3 commercial malls. In Russia, the Omsk project stands out as the first one to obtain BREEAM certification in a €20 million investment, with 6,300m2 of GLA and 30 additional shops, composed of a wide range of 40 shops all told. In Clermont North Site Gateways, the Arcadia extension was opened, with 20 new flagship stores, in 3,600m2 of GLA. There was a second phase of expansion with a 21,500m2 retail trading estate, with opening slated for 2014. In Spain, Zenia Boulevard in Alicante was opened, which brought together 150 shops, a casino and a bowling centre.

“We’ve created the vision 2020, which puts the person in the centre or in the heart of the company”, stresses Mário Costa, Immochan Portugal general manager. “In this sense we’ve created an image that will help reinforce this mission ­– we’ve got the professional experience and the customer in the centre of our logotype.”

Mário Costa adds that the new logo “is a foundation stone cornerstone, with a person in the centre of our activities.” They grey colour expresses

“concrete”, in two colours on each side. The green colour represents the group, its corporate responsibility and sustainability in terms of ambition, for today and tomorrow.

inhabitants easier, a range of services, choice and purchasing power – in other words creating value with partners. In this sustainable space for life, commerce, experiences, architecture and human The windows, façades and the beings all interact in a harmonious way. In the centre of this new ‘transparencies’ are symbolically present, in respect of the brand’s values, corporate identity a person stands out, one who is energetic in terms dynamism, transparency and of movement, and who is in the innovation, as much for today as for very heart of the project. According the vision 2020. The red, which is a to the Portugal general manager, fuchsia tone, represents the life, “this is the customer to whom enthusiasm and dynamism which Immochan brings comfort, Immochan places in each one of its experiences and well-being.” actions and relationships. “Therefore Training is equally present, as are we see ourselves in a long-lasting perspective, with the Immochan brand relationships with private and public partners and all staff. itself, which invests its own capital in real estate, as a developer”, stresses the The new trade mark expresses the Immochan general manager. special attention that Immochan intends to offer each customer and “We always aim to maintain a takes on an identity with enormous closeness to the vital forces of a ambition which is dynamic and region, windows onto employment, contemporary. It expresses, finally, the creating a dynamic whole”, he adds.

So the Immochan brand’s new image soul of a real estate development means a reinforcement of its position company that intends to offer its customers and partners a better and the signature of the brand lifestyle on a daily basis, reaffirming “Improving daily life”. the company’s historical values – this is now its overarching strategic theme.

This means making the lives of | 31

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ALEGRO SETUBAL — Architect`s perspective

T

SUA KAY | Director, SUA KAY ARCHITECTS

here was an architectural competition or “beauty parade”, for the refurbishment and extension of a twenty year old Jumbo (Auchan) hypermarket in Setubal, forty five kilometres south of Lisbon, Portugal. And we won it!

The “beauty parade” was organised by Imochan for whom we had already completed and seen built a similar and highly successful project in Lisbon.

The municipal road dividing the two plots meant that they could not be simply linked horizontally at all levels. A system of interlocking decks and ramps was used to allow visitors to circulate freely between the existing and the new parking areas. The inclined profile of the main adjoining avenue meant that direct access from the outside was possible for all but one of the parking levels.

The design of the mall is kept simple. The existing gallery facing the hypermarket is revamped in line with the proposals for the new mall. This in turn has a simple linear configuration allowing Both projects involved the transformation of exhausted standclear viewing lines from end to end. Two general mall levels are alone hypermarket boxes with attached retail units into full proposed with a third lower level, with access directly from the blown state-of-the-art shopping malls. Whereas it was possible street, for a multi screen cinema complex, an entertainment centre to attach the new mall directly to the front of the hypermarket in and a health club. A substantial food court is placed on the upmost the Lisbon project, in Setubal the solution became more complex level with a landscaped garden terrace facing the sea in the due to site conditions and planning restrictions. distance and directly linked to the entertainment floor below via escalators and two panoramic elevators that rise dramatically Planning restrictions allowed for only an additional two thousand through a thirty three metre high central atrium. Colours and square meters of construction on the existing hypermarket site. So textures using different materials and the creative use of natural for the additional area required for the new mall an adjoining plot and artificial light will give the mall a special vibrancy, a was acquired. This meant that the mall had to be developed almost contemporary feel and a special timelessness. entirely to one side of the hypermarket. Additionally, the local authority required that all parking had to be underground and a The architecture makes use of the marked difference in levels municipal road link separating the two plots, included for in the across the site. A series of landscaped terraces and walkways approved area master plan, had to be maintained. wrap around the shopping centre, breaking down the building volume and providing a sustainable public realm that is sadly Site conditions added to the complexity of the solution. A missing in the area. The removal of surface car parking and fourteen meter difference in level exists between the two plots replacing it with large landscaped areas with water features, and this had to be “absorbed” in the design of the new mall. generous planting and leisure facilities further enhances this public realm and transforms it into a more integral part of city But all this made the design task all the more challenging and life and fabric. The terrace walls will be clad in rustic precast exciting. From the start we shied away from the dumb box solution “stone” panels. The breakup of the shopping centre into three of so many shopping malls scattered around the country. We had distinct volumes is made more evident with the different façade to make it something that would be intimately associated with the treatment of each one - multi-coloured geometric patterns on city itself, not by simulating “twee” local traditional architecture one, similar patterns but in black and white on another and a but by designing a shopping centre that would be unique and bold “green”, free standing, trellised steel screen applied to the façade of architecturally and be forever associated with the city of Setubal. the existing hypermarket in marked contrast to the previous two.

A steel and glass entrance totem at one end and the soaring The design process started with resolving the linkage between the central “dome” at the other will add drama and provide great existing parking with those proposed under the new extension. visibility to the new Alegro shopping centre in Setubal.  32 | Consumer Trends

“WE WANT OUR SHOPPING MALLS TO BE PART OF THE NEIGHBORHOOD AND FOR THEM TO BE ESSENCIAL TO ITS REGENERATION. THEY HAVE TO MAKE PEOPLE HAPPY TO LIVE AND WORK NEAR THEM, AROUND THEM AND IN THEM. THEY HAVE TO BE WELCOMING, FRIENDLY, ENTERTAINING, USEFUL AND UNIQUE TO THEM AND THE CITY. WE WANT THEM ALSO TO BRING A SMILE TO PEOPLE´S FACES AND MAKE THEM LAUGH A BIT AND OCCASIONALLY.”

ARQUITECTOS • SUA KAY • ARCHITECTS

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Freeport

Great brands and an unbeatable range of

facilities and services LUIS FIGUEIREDO | Interview

The Freeport Outlet continues to be a successful trademark despite trying economic times thanks to an unbeatable range of brands at accessible prices, an unparallel range of services, a card loyalty scheme and its popularity among non-EU tourists. Nuno Oliveira, Freeport’s managing director, reveals more.

34 | Consumer Trends

“

The presence of prestigious international brands available at Freeport has no parallel compared to other commercial centres and this is a crucial factor when it comes to attracting visitors.

”

Given the mix of prime brand products available, Freeport is viewed as a fashion centre rather than a typical Outlet. Do you think this positioning in the market is the key to your success?

within the fashion sector and a growing demand by consumers for bargain choices. Will the Outlet concept embrace this bargain buying trend? And what about the brands?

The Freeport slogan ‘Great Brands, Great Discounts’ sums up the key characteristics of this retail centre. The commercial products on offer is very broad and made up of strong brands, with extremely attractive discounts available all-year-round, rather than at specific periods.

Freeport can marry choices that are increasingly price competitive with the desire and appetite for luxury brands. At a time of economic slowdown, people place a higher value on value for money.

The presence of prestigious international brands available at Freeport has no parallel compared to other commercial centres and this is a crucial factor when it comes to attracting visitors.Having big prestigious brands is undoubtedly a factor in the Outlet’s success.

An Outlet that hasn’t got a well defined range of products would find it difficult to be attractive, and therefore, profitable. Freeport really is positioned at the junction between ‘smart shopping’ and ‘affordable luxury’, and the fact that the range of fashion items available is well known has contributed considerably to this image.

Freeport’s marketing strategy (based on 4 pillars: promotion, fashion, leisure, and tourism) has always been dedicated to a strong fashion bent, not just in terms of the brands that are present, but precisely to counter some preconceptions about outlets.

Obviously in this equation outlets stand to gain because of their intrinsic characteristics and Freeport in particular, because of the quality of its range of goods, which is fundamental in order to stand out amid the current trend of attempting to convert 2nd line shopping centers with weak peformances into outlet or mixed centers. Following the same line of logic, it makes increasingly more sense for brands to have a presence in an outlet, to clear-out increasingly greater leftovers of stock while not prejudicing the sustainability of the brand itself that would find it difficult to withstand a constant policy of knock-down prices for full price items.

How far has Freeport’s financing card helped increase sales and brand loyalty?

The results of this work, seen namely through the existence of a lifestyle and fashion magazine, a television programme that ran for 3 years and a specialist blog, can be felt today in the way we are perceived in the market, both by customers and partners. This positioning also places us at an advantage in terms of preference from tourists.

In the premium segment, Freeport has registered growth rates in the order of 23%, sustained overall by an increase in the number of non-EU tourists, especially Brazilians and Angolans, followed by Russians and Chinese with remarkable growth rates. Freeport consolidated second place in the market share of non-EU tourist spending, a preference which is reflected in the business turnover.

Freeport is currently responsible for 33% of transactions made by Brazilian tourists when shopping in the Greater Lisbon area, a remarkable quota by any standard.

Freeport was the first commercial outlet in Portugal to launch a payment card, in September 2011, for its customers. This card offers various ways of associated payment, from immediate debit to classic credit with easy pay installments.

There has been a slowdown in consumer demand

Associated with the card we’ve got an exclusive loyalty | 35

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programme in the market which enables customers to be associated to a range of advantages and permanent discounts being Freeport an Outlet. The Freeport card is exactly an example of one of our mottoes: ‘discounts with the best conditions.’ This card is not just a commercial tool for customers, but also for the network of shops here that are members.

nappy changing room, WC, breast feeding area, a toddlers play area, and a refreshment area. Freeport has a constant programme of renovation and recreation going on for the public areas, with the esplanades being done up from time-to-time, along with the garden and other leisure areas, while at the same time making the most of the potential of its walkways and open air squares.

Throughout this year we’ve launched very strong campaigns like, for example, our campaigns without interest which don’t have a buying limit and don’t have any associated cost for the customer because these are wholly borne by Freeport. This way we enable our customers to up their purchasing power and range. It makes it easier to have ‘that’ item or simply manage one’s finances more comfortably. At the same time we want to provide a specific service for these customers, which means having a reserved parking space or invitations and exclusive offers.

Are you expecting any expansion at Freeport within the next few years? Have you got many brands to come on board in the pipeline?

Above all it enables a greater closeness to customers, via a far easier segmentation and understanding the needs that allow us to adjust our products and services according to the feedback we receive while at the same time making our direct relationship with our customers more effective, but also in relation to the brands with the same.

The Freeport brand has a very family orientated concept in the sense of offering relaxed and leisure moments within a shopping context. What activities have been undertaken to promote this concept?

The well being of Freeport visitors is key to the overall experience offered, vital, on a par with the shopping experience, for repeat visits and recommending the outlet to others. We’re seeking through our complimentary range of services to capitalise on the success of our commercial range. Our strategy ranges from offering customers enjoyable musical experiences, entertainment, a specific programme for children, but also to provide good conditions at the site. For example, last year we inaugurated a unique area, conceived, fitted out and decorated with the basic conditions and needs of families with babies in mind, with a 36 | Consumer Trends

The present economic situation has generally put retail expansion projects on ice and Freeport is no exception. We’re currently developing a project for the area previously occupied by the cinema halls, an area which will become a new congress centre which will be a complimentary business driver to Freeport’s core business. With a 96% occupation rate on Floor 0, we’re currently concluding the process of welcoming some new international brands which should take place by the 4th quarter of 2012 with others at the beginning of 2013.

How have visitor numbers developed; the average purchasing amount and business turnover in the past 9 months compared to 2011? What are your predictions for 2013?

Freeport’s performance during the last tax year was characterised, generally, by a maintenance of sales turnover and a reduction in the number of visitors. Less visitors but with far superior average spending (+8%). A trend that can be explained by examining the consumer profile, i.e., consumers retaining their purchasing power seeking the smart buy alternative. Until the end of 2012 we’re anticipating this trend, which we’re seeing at the moment, maintaining.

For 2013, and taking into account the effects on consumer purchasing imposed by the Portuguese economic context, we’re confident and determined to up sales turnover through loyalty programmes and beefing up the positioning of the commercial area with the best range of shops in Portugal. 

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“ The Potential of the

Angolan Market has not reached maturity yet.

”

FRANCISCO HORTA E COSTA | Manager Director, CBRE

38 | Consumer Trends

CBRE

Portugal needs to re-attract

foreign tourism investment LUIS FIGUEIREDO | Interview

Francisco Horta e Costa, CBRE’s new Managing Director in Portugal, speaks about the challenges of leading a company during difficult times for the Portuguese economy, revealing his strategy for reorganisation and the perspectives for the local and international market.

As the new Managing Director are you going to reorganise CBRE internally in Portugal?

The current reorganisation will be carried out by me with the help of the two senior directors in the company: Ana Gentil Martins, who has been with us for 18 years, who runs the Financial, Administrative, HR and Compliance areas - all vital for the successful operation of the company; André Almada who is in charge of all the agencies as well of the coordination of all CBRE’s international business - Angola and Brazilian Desk. In this way a more decentralised management will be created, one in which our strong team can play a greater part in. In the way we work, we’ve changed the way we hold meetings: every fortnight the directors and other team members involved in the business in question will take part so as to create greater internal cross-selling; as for the monthly meetings, we’ll analyse the financial situation and the business in the pipeline. That way we can achieve a better sharing of information, team participation and motivation so as to boost cross selling. I’m not going to set Capital Markets aside, having the support of Tim Seconde and giving special attention to a new member of the team, Luís Gameiro, who will hold the post of Property Manager.

How is CBRE’s internationalisation operation going in Brazil and Angola?

Our turnover within the internationalisation context already represents 10% of the total, with a tendency to grow, given my strong focus on the potential of the Angolan market, which has not reached maturity yet. In Brazilian Desk has been going really well.

The largest leasing deal done in São Paulo was achieved through our direct involvement. We have supported various Portuguese and Spanish companies in terms of renting premises and we’re starting in the evaluations area. Now we need to give a leap forward in the transactions market, in the area of Brazilian investments in Portugal.

We want to attract institutional investors, having already taken some private entities to Expo Real Munich. Mozambique is a market we’re studying, which seems to hold out promise although, before we do that, we have to know the potential.

interest - an attractive destination for consumers. The prime high street market is currently enjoying an upturn because of tourist flows with strong purchasing power in Lisbon and Porto, which has justified opening luxury outlets. Here, the increase in rents is a reality that has fired a strong interest on the part of investors: but whatever the supply may be, the number of transactions is greater.

Is urban regeneration a strong area for CBRE in Portugal?

The developments area, led by Francisco Sottomayor, is dedicated to the development and modernisation areas. We’ve seen strong demand for historic buildings in the centre of cities for short-term rent and it is a market enjoying strong growth.

How is demand behaving in terms of investment levels in the Portuguese property market currently? Are investors already looking at our market? What are the yields they are seeking for the different sectors?

Demand is less than in previous years. With the pricing alterations which have been happening, we’re slowly kindling the interest of private foreign investors, family offices, from Brazil, the UK and Spain, with the office market the most sought after, which offers a yield of 8,25% to 9% for prime zones with AAA tenants. In Shopping Centres, the prime yields are 7,75%. Rent levels are hard to maintain, so that investors need to make a thorough and conservative analysis from the offset.

What is your vision for the real estate market in Portugal and what should be done?

In the real estate market a distinction should be made between the commercial, residential and tourism segments, particularly looking at residential tourism. In residential, as in residential tourism, we’ve got to create incentives and moderate prices for the market to recover, together with new tax sweeteners and that way attract foreigners from Northern Europe - offering them incentives to live in Portugal. This will provide us with a way of getting a lasting income source. We’ve got to concentrate in a big way on the residential and residential tourism markets given our geographic conditions and unique climate.

With a reduction in Portuguese purchasing power, how But the commercial real estate market depends a lot on external should one redesign the Shopping Centres market in conditions affecting the market itself. The growth of our economy is Portugal? Is high street shopping the big trend for brands? the lever for the growth of our companies and, as a direct There’s a wealth of difference between prime and secondary consequence, for the demand of larger commercial and logistical shopping centres. The first may suffer from a fall in sales but will spaces. We have to recover again the niche of companies that based always be easier to manage and overcome times of crisis. But the themselves in Spain and created simple branch offices in Portugal. secondary shopping centres have to reinvent themselves by being We’ve got excellent products on offer with lower rents, lower salaries more creative and appealing, offering incentives to shop keepers, and unique lifestyle conditions. In the same way, the retail market is recreating environments and turning them into “points” of general fed in our economy by our income and purchasing power.  | 39

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“ New technology

has opened up a world of possibilities to retailers, but the consumer’s experience in the shop continues to be important.

”

PATRÍCIA ARAÚJO | Head of Retail & Consultancy, JLL

40 | Consumer Trends

Jones Lang LaSalle

Communication and adapting products

to customer needs LUIS FIGUEIREDO | Interview

Retailers have to adapt to a changing consumer landscape, with more aggressive marketing, greater innovation and creativity and well-defined concepts for a difficult market. Jones Lang LaSalle’s head of Retail & Consultancy, Patrícia Araújo, explains why the ‘customer is king’ more than ever before.

There has been a strong fall in consumer spend ing. What efforts have been made on the part of shopkeepers and developers to overcome this trend? In relation to fixed rents, what is the out look - is the trend set for them to disappear?

Market players are already taking measures to adapt to the new context. On the one hand, many developers have been giving rent discounts so as to help their shopkeepers survive the fall in sales. On the other hand, some shopkeepers have been trying to adapt the product and positioning of their brand. Marketing strategies have been far more aggressive so as to capture consumers and turn visits into sales. Customer service and quality are musts for the success of any shop. The price, too, in the majority of cases, is a determinant factor when it comes to deciding to purchase. Shopkeepers are aware of these issues and have worked in the sense of overcoming the difficulties they are facing with the best results possible. There are also opportunities to explore, with new concepts that are welcome in the market or internationalisation to new markets. As to fixed rents, the perspectives are to lower them but they won’t disappear.

Is there room for the opening of new shopping centres in Portugal? What were the last inaugurations? Given the current economic circumstances, will existing ones have to undergo adaptations? What kind?

There is room for the opening of some, but few and in very specific locations. Forum Sintra and Aqua Portimão were the last projects to be inaugurated in Portugal, in 2011. The shopping centres in operation will have to be updated, given the entry of new brands which see opportunities within the current economic situation. The adaptation of shopping centres could also involve an analysis of factors that are influencing the performance of commercial equipment, from the catchment area, competition, marketing, consumer profile and new patterns of consumption, so as to evaluate performance and identify those aspects where there’s room for improvement. It means doing a kind of x-ray so equipment can be repositioned to fit the profile of the (new) consumer, tailoring market campaigns and boosting a series of initiatives that can attract customers and encourage them to buy.

Demand for high street shopping has returned. What is the profile of shopkeepers and what are the floor areas most in demand? In relation to the value of rents, is the trend to rise or stabilise?

In fact Lisbon has emerged on the high street map, which has also been rather driven by an increase in the number of tourists to the capital and the city’s greater international projection as a leisure,

fashion and cultural destination. The profile of shopkeepers seeking the high street is above all international, alternative and luxury brands. In terms of locations, Chiado has become a leader in terms of high street trade in the capital, with a very complete mix between mass-market brands and more premium brands, while Avenida da Liberdade is positioned as a location par excellence in luxury shopping. I would also like to mention some locations that have become consolidated on the Lisbon retail map, as is the case with Cais do Sodré, Rua Castilho, Baixa and Terreiro do Paço, the latter having been transformed into a square with a new lease of life. Principe Real also stands out, an area which has become consolidated and is currently one of the most dynamic in the city, with an alternative and innovative trade concept, working a varied and complementary mix. High street rents are likely to keep the levels they currently have, being in the region of €90/m2/monthly in the Chiado.

In terms of consumer behaviour, have there been big changes? What are the consumer trends?

At the moment we’re seeing a contraction in consumer spending, with a consumer that purchases less by impulse and makes purchases that are more carefully thought out and well informed. Before buying, people look for information on the internet, compare prices and products, seek the opinions of friends and consult ‘posts’ on social networks. From there, the importance of shopkeepers and the commercial hardware itself will have a presence on various websites, communicating with customers in an open and transparent way.

New technology has opened up a world of possibilities to retailers, but the consumer’s experience in the shop continues to be equally if not more important, indeed if the service quality doesn’t meet expectations it is unlikely that customer will repeat the experience.

What can be done to boost commerce in shopping centres, retail parks and on high streets?

Marketing has an important role to play here. As has been mentioned, one has to communicate very effectively with the customer and adapt products and concepts to meet what consumers are looking for. Initiatives like ‘Vogue Fashion Night’, ‘Chiado After Work’ and ‘White Nights’ (‘Noites Claras’) are good examples of boosting high street trade, but the shopkeepers themselves also need to make their commercial spaces more dynamic, creative and innovative. At the shopping centres level and their management, that has to be very active by developing activities to draw people in through cultural and leisure activities or others, providing that they have a well-defined concept, are undertaken regularly and well adapted to the target market.  | 41

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Bureau Veritas ENVIRONMENTAL DUE DILIGENCE

One of the keys to success in the M&A process

T

RICARDO FERRO | Director Business Development, BUREAU VERITAS

he coming years will see many company acquisitions and mergers. By 2013 the expectation is that the pace of these operations will intensify.

An important aspect in this type of business is Due Diligence, essential to the operation’s success if undertaken in a prudent and thorough manner. This is a procedure of systematic document analysis and company information, with the goal of gauging actual and potential risks.

the viability of a site’s acquisition. Usually these works do not involve intrusive investigations with the intention of gathering information, such as collecting samples, carrying out tests, analyses, and the measurement of materials (soil, water, air, building materials...).

PHASE 2 Takes place in the sense that possible constraints close to the site could be found, which would demand a more thorough investigation, involving different types of evaluation or simply What is Due Diligence? just validating/confirming or adding to pre-existing information.

The extent of these works should include sound pollution.

Due Diligence takes on a substantial importance in terms of Generally, the scope of Phase 2 is linked with the concern to acquisitions and mergers, being fundamentally used as a means of meet the following questions: identifying problems and the research and analysis of aspects • Will the site be bought or financed without any risk or relevant to the company, be they acquisitions, sell offs or mergers. obligation?

The aim is to work out existing risks - if that’s the case - that • Are the environmental problems to do with the property could affect short, medium and long-term profitability, thus significant or trivial? minimising nasty surprises in the final transactional phase. As a • Do the costs of dealing with these problems outweigh the rule, types of Due Diligence include one or more combinations benefits of the acquisition? of the following aspects: Legal; technical; environmental; health & safety and financial.

PHASE 3 In terms of the importance and personal experience in these types Provides continuity to the research works begun in Phase 2, with of evaluations, there are some practical aspects to be taken into this phase involving cleaning up areas that are dangerous or account. The Due Diligence process is normally done in phases contaminated. The entity that carries out Due Diligence sets out and carried out within tight time frames. Historically, in Europe the extent and deadlines for the works referred to and seeks to and the USA, a three-phase approach has been used, although achieve an agreement between the parties involved, including the Phase 3 (Remediation) is rarely carried out as a part of the merger price and future responsibilities for the buyers associated with and transaction phase due to the tight deadlines involved. the rehabilitation works. So as to protect the interests of the buyer, it may include at the end, an independent inspection of The three phases of Environmental Due Diligence the works and checking and compliance tests. The most common approach is for the purchaser to fix the acquisition or merger PHASE 1 price, taking into account the costs that the rehabilitation costs Takes place, above all, at a research level with a view to gathering will demand (and other possible associated costs) and, detailed information. This phase is also characterised by site visits to depending on these costs the price is reduced accordingly after evaluate how well the company works; implying interviews with the negotiation with the supplier. entities in charge, so as to ensure responsibility and compliance reviews. Often it is necessary to supply the costs of fitting pollution Get a technical report from a suitable entity, using Technical control equipment or evaluate the company’s mitigation measures in Due Diligence, and therefore offsetting and managing the accordance with the liabilities identified in Phase 1 that could affect associated risk from a property transaction.

42 | Consumer Trends

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EXPO REAL 2012

finishes on a high

Opening with a high of 1,700 exhibitors (2011: 1,610) EXPO REAL 2012 can now also report a rise in the number of participants in this 15th International Trade Fair for Commercial Property and Investment – to a total of 38,000 (2011: 37,000).

These figures underline the show´s importance as an international networking platform, as Mike Sales, Managing Director & CIO, Global Property, at Henderson Global Investors, England, confirms: “EXPO REAL is all about contacts; most importantly our clients but also our service providers and not least, it’s a great place to spend quality time with our European colleagues.”

The market in Germany and its neighboring countries in Central Europe proved to be a particular attraction. Dr. Peter Ramsauer, German Federal Minister for Transport, Building and Urban Development, was clear in his comments at the opening of the show: “The real estate industry is especially important to Germany. It is a mainstay of our economic strength and provides investment and jobs.

Real estate accounts for the lion’s share of capital assets. That makes EXPO REAL, as Europe’s largest real estate trade fair, a central plank in the economy.”

For investors from outside Germany, too, EXPO REAL is an excellent gateway to the market. “Germany has always been a ‘darling’ when markets elsewhere were bearish,” says Jörg Banzhaf, CEO Germany of the Dutch real estate project developer Corio. And David Sleath, CEO of the UK-based firm Segro, points out: “There is a large international element which is great but there is also a very German focus, and as Germany is a core market for us it is absolutely critical we are here.” Fritz Mihatsch, Head of Project Development & Sales at ÖBBImmobilienmanagement GmbH, of Austria, agrees: “EXPO REAL has met our expectations; it is the most important trade fair for the South Eastern Europe and Central Eastern Europe regions.”

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in real estate, there is also interest in new segments. Last year hotel property celebrated a premiere at EXPO REAL with a dedicated joint stand, which this year doubled in size. A presentation of logistics property premiered this year at its own joint stand. Andreas Fleischer, Regional Director Germany at the Goodman Group, was satisfied: “EXPO REAL 2012 offered us an ideal platform for increasing the attention paid by market participants to logistics properties as an asset class.

As an international developer of logistics properties and as a European market leader, we reached exactly the real estate industry target groups we wanted to reach in Munich.” In the five forums at the fair experts on international real estate came together to discuss the diverse themes that are moving the international property sector at the moment.

The emphasis here was clearly on finance.

And that will continue to be the main focus, predicted Dr. Wolfgang Schäfers, CEO of IVG Immobilien AG: “Alternative sources of finance and above all innovative financing solutions will continue to set the real estate sector’s agenda in the years ahead. But I don’t see the squeeze mooted in some quarters as being on the cards.”

Other topics, too, were hotly debated, for example sustainability and the energy turnaround. Commenting on this, Dr. Johannes Milde of Siemens, Industry Sector, CEO Building Technologies Division, said: “Energy efficiency is a strong trend – the real estate sector will be increasingly active in this arena in future.” Gerd Hauser, Professor of the Technical University of Munich and Director of the Fraunhofer Institute for Building Physics IBP, sees “the building stock and the city in particular as critical drivers of the clean energy revolution.

Without it, the clean energy revolution isn’t affordable,” he said.

As well as discussing business deals, other main objectives of many of the participants in coming to the show were to make contact with and talk to customers and colleagues. EXPO REAL offers the ideal platform for doing just that. Rolf Lange, Head of Corporate Communication and Public Affairs, EDEKA, agrees. For him EXPO REAL again proved to be “an ideal platform, not only for making and developing contacts but also for developing new, concrete project ideas.”

Out of a total of 38,000 participants, 18,900 were trade visitors (2011: 19,000) and 19,100 were representatives from the exhibiting companies (2011: 18,000). The top ten countries of origin for the visitors, out of a total of 71 different countries, are – in this order – Germany, Great Britain, Austria, Netherlands, Poland, France, Switzerland, Czech Republic, Russian Federation and the US.

The next EXPO REAL takes place from October 7 to 9, 2013 in Munich. www.exporeal.net

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[ PA RT NE R S OPINION ]

New Consumer Identity VICTÓRIA FERNANDES | Sociologist

Since there seems to be no end in sight for the economic downturn consumers have had to employ more creative accounting in order to live on a shoestring.

They can hook up and learn from other consumers over the Internet via tweets and Facebook as well as brands to mould their own lifestyles to suit their pockets and tastes. Consumer identity is expressed in so much more complex ways than through mere consumption alone. These days identity also encompasses online status, research and knowledge, green thrift and attitudes married to reality culture.

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echnology has revolutionised the way consumers access and pay for goods and consumers nowadays are clearly interacting with a different marketplace than they were years ago: the tidy dividing lines between old and new retail have been smashed forever.

Digital is bleeding into physical retail (and vice versa), global retailers are moving into local markets, manufacturers are becoming retailers (and retailers manufacturers) with 46 | Consumer Trends

the Three global trends “ Digitization, Globalization and Polarization” dominating the marketplace and clearly showing the disruption in retail. The “digitialisation” phenomenon continues to shift into e-commerce, incorporating technology into physical stores. Apple made US$2.91 billion in App sales alone in 2012 and 400 million people visited (June 1012) one of Amazon’s sites – that’s 20% of the entire global online population. The increase of globalisation is

partially responsible because a lack of growth in home markets is prompting retailers to rush and expand across the globe (Zara, TopShop; H&M, Uniqlo and Abercrombie & Fitch). Finally, polarisation is in evidence worldwide: more than ever retail is polarising into premium and value segments, with customers happy to shop in both ends of the market. We see luxury retailers such as Louis Vuitton trading well, and at the same time extreme value chains such as Primark

and the myriad of other dollar stores around the world proliferate. Consumers’ ability to take full advantage of the new marketplace is related to their socio-economic status, from possessing the right skills and resources, to having sufficient time and knowledge to make important decisions. Consumers are responding to the socio-economic changes and influences in myriad ways. Amongst the 3 global trends, several consumer trends are shaping the future of retail, many with a social angle, as in the example of the following ones: THE HUMAN TOUCH A repercussion of consumer disillusion is an increasing reliance on other people, which has, in turn, created a desire to have humans at the centre of brand experiences. Some brands are responding by reinvesting in both offline and online customer services.

Technology itself is becoming more human ­marketers are incorporating the human touch into their brand experiences.

It is significant that the global brands that made it into the top 100 ranking of Interbrand’s Annual Best (2012) and Most Valuable Global Brands are those which understood their consumers. The last decade has seen a seismic shift in marketing communications from clever TV ad spots and print campaigns, to true customer experiences. The brands that made it to the top: Coca-Cola, Apple, Google, among others, understand what moves their customer base. From CocaCola which sells “happiness” these days, to Apple which delivers products everyone wants, to Google which has changed our lives. They are brands which integrate themselves into the fabric of our lives, whether social, business or family. That is an example of good branding and marketing. The consumer is also holding these global brands to account, demanding more transparency in business practices in return for supporting them.

REALITY CULTURE AND CONSUMERS Euromonitor International’s Annual Study 2012 found that respondents rank celebrities slightly more highly than political or community leaders in terms of whom they most look up to. Around the world rising stars are claiming the spotlight in terms of consumer attention as well as lifestyle aspirations ­­– creating new brand and communication opportunities.

DETERIORATION IN LOVE FOR BRANDS This trend is the result of the economic downturn’s disproportionate impact on lower and middle income consumers and a feeling of being ignored by institutions, companies and brands. We’re in a period of disengaged materialism.

The recession is also causing many people

to go to lower-end retailers making them less attached to their regular brands and stores. This behaviour is cemented by technology that makes it easier to learn about and buy from new retailers, which increases competition.

SMART CONSUMERS Consumers are suffering from ‘cognitive overload’ where they are presented with too much information and choice when making decisions. This in turn leads to them researching products in greater depth than before. According to a new report as many as 12 % of consumers in the UK, US and Asia-Pacific say they spend more time on research than they did 2 years ago and 20 % saying they re-research a product even after they have made a purchase decision. When consumers spend more time on research, they assign greater importance to what they are going to buy, which results in less confident, less loyal consumers.

Factors such as willingness to try new brands, technology, pricing, discounts and the impact of the economy on switching store brands are disrupting the way consumers make purchase decisions.

GENERATION NICE Sobered by the Recession’s impact on their families and communities, growing up in a highly social online world, for today’s youth it’s cool to be smart, tolerant, inclusive and above all, responsible and socially aware. This new generation is more focused and grounded than their older Millennium kin. Generation Nice is increasingly focused on responsibility, fairness, and being, well, ‘nice’. Value marketers will need to understand them more as they engage with this new generation of new consumers.

MOBILE WALLET POCKET Worldwide, smartphones are the communications accessory of choice, changing the consumer purchase experience. Many of us take our cell phone everywhere – to the cinema, a friend’s place, out to dinner, to the local gym. It’s become a necessity that we carry with us from an in-store research tool to a payment device that replaces the wallet, to an e-commerce channel. Purchasing via smartphones is set to explode in 2013, and it’s a good thing for retailers, because easier payments can translate into bigger baskets. There are currently several ways to pay on a mobile phone, but one of the most exciting technology developments is Near Field Communication (NFC) – which enables the transfer of data between two devices in very close proximity. Starbucks has had huge success this year with a bespoke mobile payment app that allows customers to purchase their Double Shot Caramel Macchiatos via their phones. But

payment systems are just the beginning. In a couple of years we’ll be using phones as identification – licenses, passports, office passes - as keys to unlock our car and apartments, as boarding passes and subway tickets – all from a simple touch. Mobile phones will become “the hub and centre” of our lives.

THE RISE OF SoMoLo SHOPPERS The result of smart phones is the “SoMoLo” phenomena - short for “Social, Mobile, Local”. It describes shoppers with smartphones to instantly share information about their choices with friends and family, researching and buying on the run, and taking advantage of local deals sent to their hand-held devices. It’s arguably the single most defining trend disrupting retail.

SOCIALISATION OF RETAIL Social influence has a major impact on what we buy, and new retail technology helps retailers harness this. From social recommender systems to social window shopping sites such as Pinterest.

GAMIFICATION Uncertain times create a desire for escape and have fun – a means to satisfy the desire for human interaction. We see games and entertainment entering consumer spheres that are generally seen as a chore, or low engagement, such as health and grocery shopping. This means opportunities for brands to put game ideas at the centre of their strategic communications.

VISUALIZATION Culture is increasingly visual. The video lifestyle is upon us as devices create more occasions to consume, create visual content and express ourselves. Social media is the catalyst to taking and sharing photos, and smartphones make it all instantaneous and fun. We also see visualisation increasing in data infographics and in the enduring sharing of Photoshopped images and GIFs which create a level of expression, often viral and socially relevant. Brands need to embrace the trend and be as visually compelling as possible.

In a digital world, the physical store is far from dead (even Amazon is intending to open physical retail stores), but it has to be a place – an experience centre – where people actually want to spend time. The best retailers already understand that “dwell time equals sell time”, and are actively encouraging customers to stay and play.

Apple is a great case in point and a great example of a company redefining the role of the retail store. Even though consumers can purchase Apple products online, the stores have for the most part been a wild success because, for Apple, they’re not just about selling things – developing customer relationships and branding figure highly.  | 47

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POP UP retail?

CHRIS GRAEME | Photos

In an event organised by the Institute for Negotiation and Sales (INV) and Jones Lang LaSalle in Lisbon’s Chiado, the cost-effectiveness and flexibility of temporary stores or pop ups in times of crisis were discussed by retail specialists Patrícia Araújo, João Alberto Catalão and Ana Teresa Penim.

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1. ANA TERESA PENIM | Vice-president, BUSINESSUP, SGPS • JOÃO ALBERTO CATALÃO | CEO, BUSINESSUP, SGPS • PATRÍCIA ARAÚJO | Head of Retail & Consultancy, JONES LANG LASALLE (JLL) 2. CARLA QUEIROZ • MARIA VAQUEIRO • ILDA ARAÚJO 3. LEONOR PERLOIRO | INV • EVA BAPTISTA | INV • AYSSA CHONG | INV 4. PEDRO TEIXEIRA • ANA SOARES 5. FREDERICO CORDEIRO 6. ANA DELGADO | SONAE SIERRA • RICARDO LUZ | CHAVES IDEAL 7. PEDRO LENCASTRE | CEO, JLL 8. MARTA LOUVENJO 9. WALTER FABREGA | JLL • GONÇALO DUARTE | JLL 10. JOÃO SOARES |VODAFONE 11. ANTÓNIO AMARAL | NATE LISBOA • PAULA CARDOSO | NATE LISBOA 12. JOÃO MURTEIRO | JLL • PEDRO MACHADO | JLL 13. PAULA SILVEIRA | SHOPPING CIDADE DE PORTO • PAULA MENA | SHOPPING CIDADE DE PORTO 14. ROSÁRIO CARMONA | MULTIOPTICOS • RUI BORGES • TANIA SILVA | MULTIOPTICOS 15. ALANA ALCINA ALMEIDA 16. DAVID CASTRO | JLL | 49

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Revolutionary concept The Mercedes-Benz CLS 250 CDI Shooting Brake

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ercedes-Benz is once again raising the benchmark when it comes to creativity and design and therefore again highlighting its leading role in the luxury shooting brake arena: in terms of its proportions, the new CLS is quite clearly a coupé, but with five doors and a roof which continues on through to the rear. This car holds out some remarkable new experiences and possibilities.

The proportions of the CLS Shooting Brake are surprising for a coupé, creating a basic statement which makes it look ready for the off: the long bonnet, narrow-look main windows with frameless side windows and dynamic roof sloping back towards

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the rear. In essence, it represents an unprecedented version of a sports car with 5 seats and a large tailgate. It’s the perfect proposition for anyone looking to set themselves apart from the mainstream crowd, yet who do not wish to compromise on either sportiness or baggage space when it comes to travelling in style. The Shooting Brake is yet another star in the innovative luxury vehicle series from Mercedes-Benz.

The reliable and appealing 250 CDI Mercedes engine provides an impressive performance with the quiet and smooth 204 hp coupled with the automatic 7G-Tronic gearbox and low fuel consumption to give a supreme driving pleasure.

Price – since €74.250

Emotive design Mercedes 180 CDI — the new A-Class

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he passionate aesthetics of the new Class A with an AMF Sports look is, without a doubt, elegantly sweeping. Its front part with a sporting facet is well evident, as is the innovative design of the grill, setting this model apart from any other. Altogether, the I80 CDI’s lines are very balanced with a rear that is simply captivating.

On opening the door, one instantly feels the top-of-the-range quality that

the interior exudes. For a start this model is far roomier than previous ones with excellent fixtures and fittings. The sporty front seats, which have the AMG signature, are extremely comfortable and boast fantastic design, while all told the interior is superbly done out to the highest standards of excellence you’d expect from a car of this type.

cm2 109 hp engine. The way this engine accelerates is simply marvellous, as is the speed of the gearbox and the precise steering control that offers excellent road handling and comfort thanks to the suspension. This small family is an excellent town runner with its Start/Stop system, for anyone who wants to gad about in great style but at the same time head for the highway to calmly make a journey with four adults in comfort The long anticipated A 180 CDI model and with excellent fuel consumption has a precise 6-speed manual gear box economy to boot. creating excellent elasticity with the 1500 Price – since €27,900

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Pretty as a Picture Annual Real Estate Agents Luncheon CHRIS GRAEME | Photos

Lisbon Real Estate Agents got the chance to see another side of themselves at the Annual Real Estate Lunch at the Espace Explorer building at Parque das Nações.

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1. MARIA DO CARMO | PRAMERICA 2. CARLA RIBEIRO | PRAMERICA 3. ANGELIQUE DE TERESA | B.PRIME 4. FILIPA CARMO | CUSHMAN & WAKEFIELD 5. FRANCISCO VASCONCELOS 6. MARIANA SEABRA | JONES LANG LASALLE (JLL) 7. JUDITE GIL | ABACUS 8. PEDRO SALEMA GARÇÃO | WORX 9. JORGE BOTA | B.PRIME 10. ANDRÉ ALMADA | CBRE 11. ANA LEMOS | WORX 12. CARLOS OLIVEIRA | CUSHMAN & WAKEFIELD | 53

RT NER SR SC CARAR [ [PAPARTNE ]]

Luxury

Sporting style BMW 640d Gran Coupé

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his Over 5 metres long it’s not surprising that the latest model in the BMW family cuts an impressive figure. The great advantage of this innovative car in the Series 6 is its ability to comfortably carry 4 passengers with ease in an environment that is not only sporty in terms of its lines but is the last word in luxury within.

The BMW 64d Gran Coupé is a car that inspires enthusiasm for motoring for even the most demanding of drivers thanks to the high force of its acceleration and the rapid power projection and reduced fuel consumption. The BMW 64d boasts the innovative BMW Twin Power Turbo technology with a Common Rail direct injection system and Twin Scroll turbo compressor.

54 | 54 Consumer | Consumer Investments TrendsTrends

The 6-cylinder diesel engine allows for supreme economy while at the same time upping performance. It sports a 630 Nm binary giving between 1,500 to 2,500 rmp, even in low turnover, providing a maximum power of 313 CV (230 kW) which translates into an impressive start-up and a spontaneous reaction capacity.

Despite the high-power engine, it is surprisingly quiet with an average fuel consumption of between 5.5 and 5.7 litres of diesel fuel per 100km covered, which can vary depending on the type of wheel rims and tyres. The diesel engine mounted in the BMW Series 6 Gran Coupé enables an impressive acceleration from 0 to 100 km/h in just 5.4 seconds.

Corporate price: from €100,551

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Conversations with the

US Ambassador, Allan Katz and the UK Ambassador Jill Gallard CHRIS GRAEME | Photos

The Americans in Portugal and the Royal British Club enjoy a lunch debate on the British and United States governments’ views on Portuguese, British and American domestic and foreign policies and the international political landscape at the Cascais Cultural Centre 56 | Consumer Trends

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1. ALLAN KATZ | US Ambassador • JILL GALLARD | UK Ambassador 2. ALLAN KATZ | US Ambassador • PAT WESTHEIMER | Americans in Portugal 3. PETER MOTTEK | Country Manager, BARCLAYS BANK • JOHN DUGGAN 4. NANCY COHEN • VIKKI RICCIARDI 5. ANA MAFALDA MAIA • JODY JAKOB • SÃO FERREIRA 6. BRUCE BIRKETT • JOÃO SANTOS SILVA | GLOBALVIA, S.A. PORTUGAL • IRENE POSALASKY • ALLAN KATZ | US Ambassador 7. CAROL MASON • PETER MASON • PATRICIA WILSON 8. JO DAVID • MICHAEL R. REEVE • DAVID WALLIS • MATTHEW KRYSTMAN 9. MADELON JACCKIE • KEYES STOLK • SUZAN STOLK 10. MICHAEL SIMPSON • CAROL BERANEK • SAMUEL REBELO DE ANDRADE 11. SALLY TILLY • FRAN WALLIS | 57

[ PA RT NE R S C AR ]

It’s all in the S Honda Accord Tourer S 2.2 DTEC Executive

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his is Honda’s most powerful diesel engine ever, with the Type S treading the middle ground between fun and function: quick and fun to drive, but refined, economical and very well-equipped. Well worth considering if you’re after a big estate car.

The Accord Tourer S2.2 DTEC Executive is one of the most stylish and sporting vehicles on the market, despite losing some practicality as a result. The diesel engine is the perfect match, too.

The Honda Accord Tourer boasts sleek lines while offering the legendary reliability and excellent build quality that one is accustomed to from the Honda family. The Accord

58 | Consumer InvestmentsTrends

Tourer’s interior is a quality product indeed - Honda has used soft-to-the-touch materials wherever possible to give the car a premium feel.

The Accord Tourer S has an excellent diesel engine and very smooth manual gearboxes to boot to make the Tourer a good drive that will satisfy most, especially those doing lots of motorway driving.

The Honda Accord Tourer S 2.2 DTEC Executive offers good looks for an estate, an excellent build quality and reliability you can trust - knowing that it won’t break down. It would make almost any family proud, with its elastic engine and low-fuel consumption.

Corporate price: from €44.500

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Portuguese French Chamber of Commerce and Industry celebrate

125 years of Excellence CHRIS GRAEME | Photos

The Portuguese-French Chamber of Commerce and Industry celebrates its 125th anniversary with a Gala Dinner at the Pestana Palace Hotel in Lisbon at which this year’s French Trophy winners were announced.

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1. PAULO ANJOS | DOREL • CARLOS MORGADINHO | CIMD • RAYNALD JOLY | RENAULT CACIA • MANUEL SOARES FERREIRA REGALADO | PORTUCEL • JEAN MARC CHARRITON | LAUAK PORTUGAL — NOMINEES 2. COMENDADOR NABEIRO | President, DELTA CAFÉS 3. RECEPTION OF THE CCILF 125TH ANNIVERSARY CAKE 4. PAULO ANJOS | CEO, DOREL — TROPHY: Investment 5. MANUEL SOARES FERREIRA REGALADO | PORTUCEL — TROPHY: Export – Large Companies 6. VÍTOR MARTINS | Environmental Director, SONAE — TROPHY: Sustainable Development 7. JEAN MARC CHARRITON | LAUAK PORTUGAL — TROPHY: Export – Company with 500 employees or less 8. JORGE SANTOS | CEO, VIPEX — TROPHY: SME 9. CARLA GUEDES | REPUTATION • MOREIRA DA SILVA | RENAULT • HELENA DUARTE | IAPMEI 10. LUÍS BARREIROS | • BERNARD CHANTRELLE | President, CCLF • FRANÇOISE RAMBIER 11. PAULO MAURÍCIO • MURIEL ROUX • FREDERICO ROUX | EUROPAMUT 12. FILOMENA FAUSTINO • CLÉMENTINE FÉLIX | CCLF 13. FILIPA MENEZES • RUI HORTA | 61

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A state without a welfare state

isn’t a social democracy at all!

CHRIS GRAEME | Photos

At an International Club of Portugal dinner held at the Fontana Park hotel in Lisbon at the end of October, socialist economist and PS advisor Dr. Artur Baptista da Silva warned that the Government risked social rupture and the destruction of social democracy if the welfare state was destroyed. Portugal’s debt needed rescheduling with more generous repayment periods and lower interest rates.

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1. MAHOMED IQBAL • EUGÉNIO JOSÉ DA CRUZ FONSECA | President, CARITAS PORTUGUESA • MANUEL RAMALHO | President, ICPT • GONÇALO CARRILHO • GUSTAVO GOUVEIA 2. JOSÉ ZULUAR BASÍLIO | UNIVERSIDADE LUSÓFONA • MANUEL RAMALHO | President, ICPT • TIAGO BASTOS | President, DIREÇÃO KARINGANA 3. JOÃO BAPTISTA DA SILVA • CARMEN BAPTISTA DA SILVA • ARTUR BAPTISTA DA SILVA • FILIPA BAPTISTA DA SILVA 4. FILIPE BALTAZAR | FB&A SOCIEDADE DE ADVOGADOS • NUNO ROMÃO | FB&A SOCIEDADE DE ADVOGADOS 5. FILIPE QUINTAS FERREIRA | Director, SANTANDER TOTTA • RODRIGO JOAQUIM QUEIROZ VALÉRIO | Consultant 6. JOÃO BELEZA • MANUEL RAMALHO | President, ICPT 7. FRANCISCO SANTIAGO | LISBON FILM ORCHESTRA • RUI MESSIAS | CEO, TIPOLINHA • MANUEL RAMALHO | President, ICPT 8. ANTÓNIO RUIVO • ANALISA COSTA REIS • MANUEL RAMALHO | President, ICP 9. GONÇALO CARRILHO • HENRIQUE SÁ NOGUEIRA • ANTÓNIO CORREIA • JOSÉ CARIA 10. JOÃO BARROSO | SIBS • ARTUR BAPTISTA DA SILVA • EUGÉNIO JOSÉ DA CRUZ FONSECA | President, CÁRITAS PORTUGUESA 11. ARTUR BAPTISTA DA SILVA • MANUEL RAMALHO | President, ICPT 12. RUI MESSIAS | CEO, TIPOLINHA • MANUEL RAMALHO | President, ICPT • MIGUEL CUNHA | Commercial director, TIPOLINHA 13. SÉRGIO ALBUQUEQUE | VITALOBRAS • JOAQUIM VALE | Board member, SANTOS E VALE | 65

[ PA RT NE R S OPINION ]

HOW CHRISTMAS VALUES

CAN IMPACT YOUR PERSONAL AND ORGANISATION’S RESULTS! VALTER ALCOFORADO BARREIRA | Executive Director, KNOWING COUNTS

The simple act of giving – getting into the Christmas spirit all year round

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ithin the Christmas perspective people usually adopt or reinforce specific values, behaviours and attitudes that aren’t so evident the rest of the year. Concern for the next man, greeting everybody, contributing towards other introspections and spiritual reflections, attention to the less fortunate, making our time available, giving to others – even those we don’t know – by way of donations and presents, are just some examples of the things we can take pleasure in experiencing in this festive season. Which is also why I love Christmas.

The main driver for this Christmas behaviour, namely the act of giving, has its roots in our culture and stems from social pressure and rules and is either limited to one day (Christmas Day) or a period of time (the Christmas season), with this giving being fairly predictable and even expected. We can therefore say that there’s a certain cultural pressure which turns into a ritual obligation.

But any reason to give is a good one and apart from the one just mentioned, there are other and different types of motives to do so, one of them of an eminently professional nature. Each motive and the equivalent type of gift encompasses different objectives and benefits for those doing the giving.

Therefore, another kind of gift is one that also has a low degree of self-interest and is spontaneous and voluntary. It means giving without asking for anything in return, as happens in altruistic behaviour, for example, taking a cake to a neighbour that is laid low in bed, taking part in an act of charitable voluntary work, or giving up our time to go and speak to kids in a school. This kind of gift is very gratifying and such generosity pays dividends in itself.

According to a recent article in the magazine ‘Visão’, charitable behaviour and gestures work on the brain, releasing the feel-good hormones (Dopamine and Ocitocine), even encouraging the creation of new neurons and strengthening the immune system (Prof. Stephen G. Post).

This endogenous compensation phenomenon is already well-known in the behaviour and gestures linked to love and friendship, a third type of reason to give, indeed doing something that we feel like doing and is satisfying has exactly the same chemical-hormonal reaction. In this case, the type of gifts has a high degree of selfinterest and takes on a ‘obligational’ character, at the very least a certain prism. Lastly, these are the most important gifts in the world of business, namely in professional networking activities, which are

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motivated by the demand to create reciprocity. The act of giving is to proactively help other professionals, sharing resources that can contribute to the professional or personal success for those receiving what could be information, opinions, opportunities, access, introductions, or even recommendations and referrals.

Those receiving will want to reciprocate, even going that extra mile in exceeding the perceived benefit, and therefore also contribute significantly towards the success of the person who created the asset in the first place, cultivating a mutually beneficial relationship and fostering a culture of abundant resources. This type of gift is of a voluntary character, spontaneous, pro-active and encapsulates a high degree of self-interest. This might seem paradoxical, for in respect to professional networking good practices – and that’s what I recommend – is giving without expecting anything in return, receiving without forgetting and always being thankful for the benefits received and the choices that we were beneficiaries of. However, this does not prevent us from knowing beforehand the potential of the actions we take, and that is how reciprocity works – that one day these gifts will probably return to us in greater measure, if not from the person who benefited directly from our actions or recommendations, then certainly from another.

In this way, we can observe that enshrined in the values and spirit of Christmas, the actions of giving, of doing good for other people, of doing good for our fellow human beings, of sowing our life with good actions, have an equivalent at the business level, which is cultivating relationships, namely giving generously without demanding an immediate return; contributing to the development of the stages in professional relations, and reaping the fruits of high levels of confidence that are contained within them. Which is why, as professionals, we should foster the values, behaviour and attitudes typical of Christmas all-year-round, particularly in 2013 (and not just at festive periods), creating an abundance of resource and reference sources that will decisively contribute towards the success of our buisness dealings and career.

I’d like to offer all Partner in Business readers and my clients a sincere wish for a Happy Christmas and prosperous New Year for 2012. Note: this essay is based on a business workshop created by Valter Alcoforado Barreira. If you would like to find out more about this speech and others for your Christmas event in 2012 contact Valter via e-mail: VAB@KNOWINGCOUNTS.NET