The city of Porto is increasingly on the foreign investment radar. It is a city that has managed to attract both startups and large multinationals, especially in the field of technology. The city has many advantages and so it is able to compete head-to-head with other European cities.
Natixis, BNP Paribas, Devexperts, Euronext and Vestas are just some of the major companies that have chosen to invest in Porto. The city has gained ground on other European cities for a number of reasons. Among them is the fact it has highly-skilled human capital, a supply of talent, cooperation in terms of technology and investment incentives. On the other hand, the universities have learnt how to create synergies with companies, a prime example being Porto University’s Science and Technology Park (UPTEC). Through its attempts to attract direct foreign investment Porto has gained, in addition to prestige, know-how and hundreds of jobs.
Natixis, the international corporate & investment banking, asset management, insurance and financial services arm of the BPCE group – Banque Populaire & Caisse d’Epargne, set-up its 12,000 sq m offices in Porto. BNP Paribas will occupy the Urbbo building, which is currently being built and will have more than 13,000 sq m. While the German multinational, Devexperts, which provides software services to financial sector companies, chose Porto over the Czech Republic and Hungary as its home for a research and development centre.
A little more than a year ago, one of the largest exchange networks in the world, Euronext, opted to leave Belfast, Northern Ireland, and set up in Avenida da Boavista too. The opening of the Euronext Tech Center led to the creation of 140 jobs, making, Portugal the company’s second largest employer in Europe, after France.
At the end of 2017, the Danish company Vestas, which specializes in wind turbines for wind farms chose Porto out of 99 candidate cities, to set up a technology basic research centre. It is currently located in the Centro Empresarial Lionesa, a space that is around 800 sq m and is constructing an office building that will be around 3,000 sq m in the same location, which will become its headquarters.
However, there are more examples of companies that have opted for Porto when setting up and developing their businesses. Farfetch is a great example. The first “unicorn” startup founded by a Portuguese entrepreneur in 2008, developed a website which allows users to buy luxury clothes and accessories from over 300 multi-brand stores from around the world. The company has offices in London, Los Angeles, New York, São Paulo, Tokyo, Guimarães, Lisbon and, of course, Porto.
Likewise the US company, Sitel, one of the world’s largest suppliers of customer support management services and the market leader in contact centres, is also in Porto where it provides outsourcing services to major international brands.
The Porto property market has grown exponentially
The property market in Porto has grown exponentially in recent years. Growth in tourism, driven by the arrival of the low cost airlines Ryanair, in 2005, and EasyJet, in 2015, has led, in the last five years, to growth in the number of tourists. The number of passengers landing at the city's Sá Carneiro airport was up by about 15% in 2017, compared to the previous year.
In 2017, six new hotels opened in Porto, offering 392 rooms to the city. Besides the hotel sector, Porto has also recorded very significant growth in the remaining real estate sectors. High street retail in the historic zone of the city is also dynamic, buoyed by the tourism, by the renewal of various properties and the opening of a diverse range of new stores.
In the offices market, the dynamism was began in 2015, with large scale transactions (1,000 sq m and over), rather
than the traditional demand for 100 and 200 sq m spaces. The following year, however, was the year that the market made a significant leap, where the take-up volume doubled that of 2015, and setting a record of 49,000 sq m. Undeniably, there is an increasing number of foreign companies seeking offices in Porto in order to open up shared services. However, for the moment this sector’s dynamism is constrained by the scarcity of quality offices.
As for the commercial property investment market, we have seen some deals in Porto and a number of others are in the pipeline. It is important to highlight that large plots of development land and properties to be refurbished have been purchased by foreign investors, therefore we can expect to see the start of new projects.