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INTERVIEW “OUR GOAL FOR 2017 ISTO CONTINUE TO GROW” FREDERICO BORGES DE CASTRO Member of the CBRE Executive Committee OPEN SPACE MARKET WATCH NWOW Claude Kandiyoti The property market reviewed New Ways of WorkingCEO of Krest Real Estate Investment in detail per sector CBRE’s revolutionary concept which talks of his passion for Portugal is changing the way we work

The information contained in this publication has been carefully compiled. Although its accuracy has been confirmed, CBRE makes no guarantees or representations about it. The information relates to April 2017 and is subject to change without notice. The information is provided solely to CBRE clients and may not be reproduced without CBRE’s prior consent. © April 2017. All rights reserved.

PA N O R Â M I C A 05 20 32 Editorial Market watch Trends 01| High Street Retail How do the Millennials live? \"And yet it moves...\" Francisco Horta e Costa. High street retail is increasingly back in The CBRE study \"Millennials: myths fashion, with a fresh new start due to the and reality \" answers this and other 06 questions about this new generation. Short news increase in tourism. 34 The latest news from 22 Workflow in and outside CBRE. Market watch New Ways of Working 02| Retail Management 10 This concept favours a new workplace Interview Shopping centres managed by CBRE are model: more modern, versatile and A day in the life of ... reinventing themselves in order to give innovative design, based on people.Frederico Borges de Castro ensures us their consumers new experiences. 38\"luck is nothing more than initiative, Innovation 24 The Internet of Things work and boldness \". Market watch CISCO Portugal Managing Director 14 03| Offices explains everything about this 360° View Lisbon is ranked 26th amongst Europe’s technological revolution, which promisesCBRE is a company with 360º services. 35 most technological cities. to change the way we live. 16 26 40 Open space Market watch Rooftop Claude Kandiyoti, 04| Logistics Capturing the essence of urban life CEO of Krest Real Estate Investment, is the goal of the Urban Photographer fell in love with Lisbon and now deals Online shopping is leading the increase in the demand for storage of the Year competition now in all real estate sectors. in its 10th edition. facilities near major cities. 18 42 Quickview 28 Milestones Market watch Analysis of the property market in 05| Residential The latest prizes and awardsPortugal, in 2016, when CBRE recorded won by CBRE. Golden visas and tax incentives are growth of 25%. attracting increasing numbers of foreign residents to our country. 30 Market watch 06| Tourism International recognition has caused tourism in Porto to rocket in recent years with a major impact on urban renewal. PA N O R Â M I C A 3

DatasheetOwnership CBRE | Design and production How - House of Words, Lda. Photography Nuno André Santos, Gettyimages e Thinkstock Printers Lidergraf | Print run 200 | Deposit copy 431013/17

EDITORIAL Francisco Horta e Costa CBRE Portugal Managing Director AND YET, IT MOVES …T he sentence that Galileo whispered number of prizes we have received in Since we live and work in an ecosystem to the Head of the Holy Office the field of tourism. In the league table that necessarily involves the surrounding of Inquisition in 1633 to defend of European cities, Lisbon and Porto are community, we have signed a multiannual his heliocentric theory, perfectly flying high and rubbing shoulders with agreement with the Just a Changeillustrates the behaviour of the property Madrid, Barcelona, Paris and London as organisation aimed at actively helpingmarket in Portugal. Despite the difficulties a place to live and work, where you can society’s less fortunate. To borrow a linethat the Portuguese economy still faces, the feel the creativity and entrepreneurship. from Mother Teresa of Calcutta: “Everythingproperty market is more robust than ever, Despite this favourable climate, at CBRE that is not given is lost”.as the “stars are aligned” in a way never we always strive for quality and innovationseen before. Every day investors from all in the services we provide. Every day we Thank you, we are counting on you.corners of the world land in Portugal (and I come to work motivated and with theam deliberately not just referring to Lisbon) drive to contribute to our clients success! Every day weto study the investment opportunities in What keeps us up at night is the desire to come to workour country, as well as companies planning be the best, to be different and to go one motivated andto set up or expand their business here step farther, in short - the “CBRE Edge”. with the drive toand people who wish to change direction To turn this into a reality we have invested contribute to ourand come to live in this charming corner and will continue to invest in technology clients success!of Europe. Some 35,000 foreign students and in our most important resource: Peoplefrom around 200 countries are studying at (with a capital P!). The CBRE team inPortuguese universities which accounts for Portugal currently comprises a staff of overan increase of 75% from 2011 to 2016. Even 140 working in various departments withwe, the Portuguese are clearly proud of our tenants and investors. In this edition youcities which are continuously requalified will find the results of our work: by a teamand continuously more beautiful and of whose know-how and experience are put toseeing how often Portugal is praised in the the service (and to the test!) of our clientsforeign press, not forgetting the countless every day. PA N O R Â M I C A 5

SHORT NEWSNewCBREvehiclesaroundLisbonThe CBRE FacilitiesManagement teamhas four new vehiclesbearing the company’simage. The aimis to support thepreventative andcorrective maintenancework undertakenby our staff dailyfor our clients inthe Lisbon area.CBRE providesinfrastructuremanagement servicesto some of the world’smost importantcompanies. JUST A CHANGE SUPPORTED BY CBRE 3 years At the end of 2016 CBRE In a framework of medium to a genuine need of Lisbon’s entered into a partnership long-term social responsibility, poorest residents and of others CBRE has agreed with Just a Change, a charity Just a Change is an institution living in rural areas. In recent to fund the purchase that refurbishes the homes that falls within the scope of years CBRE has supported a of families in need. CBRE has CBRE’s business, in particular number of social initiatives, of materials to agreed to fund the purchase urban rehabilitation.Just a such as Nariz Vermelho and refurbish two of materials to refurbish two Change seeks to respond to Make-a-Wish. homes of families in homes of families in need, per need, per year, for year, over the next three years. the next three years. The partnership also covers the collecting of funds and goods,6 PANORÂMICA plus voluntary work.

NEW WAYS New Ways of WorkingOF WORKING (NWOW) has beenIN LISBON implemented at the office. A cocktail party that brought together clients and staff was held on the 15th September. The event took place in the new terrace with the theme \"travel around the world\" serving Portuguese, Japanese, Italian and French food specialties. Music was provided by a jazz band and speeches were given by Francisco Horta e Costa, CBRE Portugal Managing Director, and Adolfo Ramírez-Escudero, Chairman Capital Markets Continental Europe, CEO CBRE Spain. PA N O R Â M I C A 7

SHORT NEWSCBRE holds first conference onproperty market trends at the BelémCultural CentreCBRE held its firstconference on MarketTrends in Portugal on 31January 2017. The eventtook place at the BelémCultural Centre from8.30 to 12.00, with mediapartner Expresso, wasattended by 200 people.In this event a high levelof commercial investmentforecast for this year wasannounced, along withnew building projects bya number of investors.Portugal may remain a“safe haven” in a worldthat is going througha particularly unstabletime, as underlined by theCBRE Managing Director.According to FranciscoHorta e Costa, \"despitesome alarm\" over theelection of Donald Trumpas President of the UnitedStates, “the outlook isoptimistic for real estate, aseverything is as stable aspossible\".Pedro Santos Guerreiro,Editor-in-Chief of Expresso,presented his viewson the outlook for thePortuguese economy thisyear, while the Directors ofInvestment, Offices, Retail,Logistics, Residential andTourism, together withCristina Arouca, CBREDirector of Research,presented their forecastsfor the year.The conference endedwith a debate entitled \"Theinvestor and OccupierPerspective\", withparticipants from BNPParibas, Merlin and SquareAsset Management.8 PANORÂMICA

Be Well, for health and well-being \"Be Well\" was the name of the campaign run by CBRE from 26 September to 14 October 2016 so as to promote health and well- being amongst its staff. Frederico Borges de Castro was responsible for providing advice on a daily basis during the campaign, in order to bring about a healthier lifestyle founded on three pillars: Eat Smart, Think Well and Be Active. During the first week CBRE staff took part in a workplace gymnastics class, where they learnt a number of techniques and exercises to keep them in good shape. The second week they had a nutrition class, followed by a healthy lunch. In the last week, there was still time for a mindfulness class. The CBRE team had the chance to learn how to meditate, and to use this technique to be more focused at the workplace.PADDLE TENNIS FOR A GOOD CAUSEIn 2016, CBRE organised its years, these occasions have had the addition of athird Paddle Tennis Tournament social responsibility role, and the outcome is now- this time Paddle By Night invaluable. We seek to add value to everything we do,- a fund raising event which and once again we have supported Just a Change,donated the entry fees to the which does inspiring work in Portugal restoring theJust a Change organisation. homes of families in need”, said Francisco Horta eThe team consisting of Caetana Costa, CBRE Portugal Managing Director.Correia de Barros, AntónioCastello Branco, João ArbuésMoreira, João Gois, MiguelFerreira and Ricardo Serranowon the tournament which washeld at night at Clube VII inLisbon. “CBRE held this tournamentas a way of strengtheningrelations between clients, staffand Partners. In recent PA N O R Â M I C A 9

A day in the life of...F R E D E R I C O B O R G E S D E C A S T R O , Director of Valuation Advisory and Consultancy and Member of the CBRE Portugal Executive Committee“I WAS ALWAYSVERY CURIOUSTO KNOWWHAT THE REALWORLD WAS LIKE,OUTSIDE THAT ARESUBLIMINALLYTHRUST UPON US”A free thinker, free of the preconceived ideas, Frederico Borges de Castrohas been around the world and confesses that he carries Brazil in his heart.At the age of 52, he rides a Harley Davidson and is going to be a father.The man who managed to double the turnover of the CBRE ValuationAdvisory Line of Business ensures us that luck is nothing more than initiative,work and audacity.10 P A N O R Â M I C A

Life is so much simpler He studied in Portugal, in seen through a Brazil, the USA and in England and became a spreadsheet. But, not man with an entrepreneurial for me, I am naturally spirit and an open mind.more human and more He became involved in real estate by chance and fell real than that in love with it. At the age of 28, Frederico Borges de Castro was already a partner in a valuation firm. He has been at CBRE for 10 years and leads a winning team. When he was young he dreamed of being an explorer and he loved discovering new places, going into caves and finding things that nobody had seen before. He lived on his grandfather’s farm in Barcarena, where he enjoyed adventuring on his own and choosing his own hideouts. Following the revolution in Portugal in 1974 there was a great deal of uncertainty and his family chose to move to Brazil. “At the time my father was in his early thirties and he had four children. He went to Brazil, found a job and came back to get all of us”, explains Frederico Borges de Castro. He lived in Brazil from the age of nine to seventeen, first in São Paulo and then in Rio de Janeiro, and he doesn’t hide the fact that it was a very important phase in his life. “I loved Brazil, especially Rio de Janeiro, and I still feel Brazil in my heart”. When he got to Brazil it was all so new and people did not understand what he said. Nonetheless he recalls it was very easy to adapt. As he explains, at that time Portugal was a very conservative country, unlike Brazil, which was very liberal and a country where people were very open-minded. He feels that to date Brazilians think differently. “Like North Americans they do not have so many taboos and they are not so programmed. For them the world is an opportunity. We think a lot and act a little”, he adds. Frederico Borges de Castro was a mediocre student of English and his father sent him to the USA during his vacations to study the language: first when he was 14 then again at 16. On the second occasion, he had to make the 36-hour trip alone and had to stopover at a number of airports in Latin and Northern America. At one of them he was surprised by bad weather and the plane could not take off. He was forced to find a hotel room for the night in Los Angeles. He believes it was this experience which forced him to become an adult and taught him that he could handle any situation on his own. “I never had many holidays because as soon as school was out my father would send me somewhere”, he admits, unable to conceal a smile.When he P A N O R Â M I C A 11

A day in the life of...F R E D E R I C O B O R G E S D E C A S T R O , Director of Valuation Advisory and Consultancy and Member of the CBRE Executive Comittee, Portugalwas 17 his parents decided to return home. contributed to achieving this important milestone father returned as a successful man from Brazil, In Portugal in the 80’s people always looked at such a young age. as he was hastily tidying some papers, he said: you know son, a lot of people say I have beenmiserable, whereas in Brazil joy was contagious. “At the time I felt as big as the world”, says lucky in life. That is not the case. A little bit moreHe says it was a “traumatising” return. After Frederico Borges de Castro. In the early 90’s, initiative, a little bit more work and a little bitaround two years in Portugal, he spent three at the age of 28, he was already a partner in more boldness, that is what other people oftenmonths in France before moving on to the South a company that was a benchmark in the market call luck”.of England where he took a course in Automobile where he had the opportunity to take part inEngineering and Motor Company Management the privatisation of many of the largest public Borges de Castro is a fan of old cars andat the Chelsea College of Aeronautical and corporations including TLP, Telecom Portugal, motorbikesAutomobile Engineering, in Shoreham-by-sea, TMN and many others. After six years, in 1999,near Brighton. There the culture shock was very he left the firm and in the following years worked Ever since he started studying mechanicalstrong. When he arrived, things were not easy: for other real estate companies before joining engineering Frederico Borges de Castro wasit was always raining – this came after living CBRE in 2007. He quickly realised that this was drawn to old cars. He became a collector andopposite the beach in Rio de Janeiro – and the the company where he should have been for has owned old cars all his life.residents of Shoreham-by-sea were mainly retired many years “from the beginning I have felt thatpeople who did not appreciate young foreigners. CBRE gets the best out of the best of us”. His first car was a classic: it was a TriumphThis made the atmosphere even more grim and GT6 which he loved. Even today he still has ansad. On his own in a grey land where he did Today, aged 52, Frederico Borges de Castro old car that is being restored. He has taken partnot feel welcome,he admits that at first it was is going to be the father of a little girl. He in a number of competitions and Motor Showsdifficult to adapt. Only when he was taking his confesses he is happy. And he tells how his motto but now his passion are the Harley Davidsons.second course, the one he truly liked – Company for life was born. “Some years ago, when my He has a number of them and every FridayManagement – did everything change. We have managed As soon as he got back to Portugal, he spent to double our18 months doing national service and one week turnover inafter that he started working at the Portuguese 10 years.Institute for Foreign Trade (ICEP). “So, I never had We have beena holiday”, he recalls. market leaders for the last three years At ICEP – an entity aimed at promoting exports and our goal for– he worked in the field for which he had trained 2017 is to continuein the metalworking and metallurgy sector, which to grow and to servehe describes as a great schooling. He worked our clients betterthere for two years and came to the conclusionthat if he wished to develop professionally hecould not spend too much time in one place.\"Life was much simpler then\", he admits. He sentjust three CV’s and was called to two interviewswith the opportunity to choose between twocompanies. He chose an American companyand that was how he got into valuations. Heworked there for two years before he wasinvited by the former manager to set up a firmand become a partner. His open mind andexperience of life abroad must surely have A DAY FOR 7h00 8h15 9h15 Frederico Borges de Castro He likes to start the day early, even on He arrives early and uses As the day moves ahead the weekend. In the shower, he prepares the early morning quiet to he attempts to deal with12 P A N O R Â M I C A for the day ahead. He watches the news go through his email and the simpler problems and on the international channels while he speak to those European requests straight away, so has breakfast and then walks the 2 km colleagues who are already that later he doesn’t have from his home to the office. working at 100%. to waste time on them.

Our valuation and on weekends he rides a motorbike. “It is a team is different lifestyle – freer, younger”, he admits with a twinkle in his eye. exceptional. Our success He was always and adventurer: he learnt to comes from parachute, he has loved skiing and waterskiing the fact that almost since he was born – a sport all the family, including his parents, do. “My goal for 2017 is we are all to take up waterskiing again after a ten-year lay in sync off – I am finally in shape to do it again.” But these days he is also very keen to take long hikes on weekends, which he finds very relaxing and beneficial for a healthier lifestyle. He also paints. Self-taught, at one time in his life he painted over 40 pictures for his house and to give to close friends. In another phase of his life he was given to more introspection and wrote down his reflections on what he felt was the reality of the world and God. He was not connected to any religion but at the age of 27 he suddenly became filled with an unshakeable Catholic faith and he feels lucky to have it. The CBRE Valuations Advisory Line of Business managed to double its turnover in 10 years Valuations are a benchmark for CBRE. “We have been market leaders for the last three years and our goal for 2017 is to continue to grow and serve our clients better” states Frederico Borges de Castro. “Life would be easier if I was a spreadsheet. But I cannot become one” He does not fully share the Western mentality of only thinking about numbers above all else. “Life is so much simpler seen through a spreadsheet. But, not for me, I am naturally more human and more real than that”, he emphasises. His goal is to do more and do it better, and he is always available to help his clients take difficult decisions. The secret of this business is the team he states. “Our valuations team is exceptional. Our success comes from the fact that we are all in sync.: if we fail we are all responsible and the same is true when we succeed.”13h00 14h00 18h30 18h45He often goes home He prefers to communicate He prepares the agenda He tries not to leave anyfor lunch and when with colleagues personally for the next day and later because he has otherhe does, he enjoys a rather than by email. So he recalls which matters need commitments and at home he15-minute nap. often walks around the office. to be dealt with in the is the cook and nobody else. morning with a clear head. P A N O R Â M I C A 13

360º ViewCBRE25% GROWTHIN PORTUGALIN 2016CBRE accompanies its clients through allstages of the real estate cycle.C BRE has over 130 Amongst last year’s deals we point out the and comprises eight floors and an area of employees who specialise sale of the Diário de Notícias Building to around 6,500 sq m. According to Francisco in the property market and an international property developer and the Sottomayor, Director of Development at CBRE, advise owners, investors management of three shopping centres on “the sale of the Diário de Notícias Building was and tenants. behalf of a foreign bank. a very interesting project, not only because of its This team helps to define history and symbolism – which in my opinion is not only the real estate Diário de Notícias: From Avenida to one of the most extraordinary buildings in Lisbonstrategy but also renders advice on the Torres de Lisboa – but also because of all the work that wasdevelopment, purchase, sale, financing, undertaken beforehand, leading to the Globalleasing, valuation and management of CBRE was responsible for the sale of the Media Group leaving the property”.assets. emblematic Diário de Notícias Building at Avenida da Liberdade, in Lisbon, to an It should be noted that CBRE was also Last year CBRE recorded a growth of international property developer. Inaugurated responsible for placing the Global Media25%, in Portugal and deals on April 24th1940, the building was designed Group – comprising Diário de Notícias, Jornaltotalling 400,000 sq m. by the architect Porfírio Pardal Monteiro de Notícias, O Jogo, TSF and Dinheiro Vivo – in Tower E, of the Torres de Lisboa complex. In this14 P A N O R Â M I C A deal CBRE represented the Global Media Group in the search for and identification of the best real estate solution that would allow the Group to concentrate its activities in a single building in Lisbon. André Almada, Senior Director of CBRE Advisory and Transaction Services, points out that \"the great challenge for CBRE was to consolidate of the media group companies in one single location in Lisbon.\" The printed media were located in Avenida da Liberdade while the TSF radio station was situated in eastern Lisbon. Torres de Lisboa was the best choice because they are top quality premises, offer good access and a strong public transport network, and have a modern, prestigious image”. Sale of Dolce Vita Shopping Centres: one of the largest deals in the last ten years Amongst the emblematic deals conducted by CBRE, we highlight the sale of three shopping

130 Employees specialising in the real estate market 25% Growth recorded last yearcentres at the end of 2015 – Dolce Vita 360ºCoimbra, Dolce Vita Porto and Dolce Vita Douro– with a total area of around 100,000 sq m. The CBRE team accompanies not onlyto an international bank, It was considered the defining of the real estate strategy butto be one of the largest deals in the sector in also renders advice on the development,the last ten years in Portugal. In 2016 CBRE purchase, sale, financing, leasing, valuationwas appointed to manage the three shopping and management of assetscentres, having undertaken the rebranding ofthe shopping malls. The three shopping centres P A N O R Â M I C A 15became known as Alma Shopping (Coimbra),Nosso Shopping (Douro) and Alameda Shop& Spot (Porto). The creation of a brand for each shoppingcentre also led to their remodelling. AlmaShopping took as its inspiration on Coimbra'shistoric importance and the fact it is located inthe heart of the city. The new graphic imagewas inspired by the Coimbra guitar and tears,and seeks to embrace the city’s identity andcolours. As for Nosso Shopping, there is a directappeal to consumer emotions and to the senseof belonging to a region. While the name Alameda, Shop & Spottakes into account the centre’s location and thefact that it will be a point of convergence anda restoring landmark, acting as a true meetingpoint for the city of Porto and Alameda dasAntas to landmark status. The new brand hasgiven rise to a new name and a totally reneweddesign. CBRE has also been instructed with themarketing of the three shopping centres, anddeals have already been concluded for 30new stores, covering 6,500 sq m. Lastly, theremodelling project for Nosso Shopping wasalso designed and managed by CBRE.

Open SpaceC L A U D E K A N D I Y O T I , CEO of Krest Real Estate InvestmentCLAUDE KANDIYOTI“KRESTLIS HASBEEN GROWINGIN PORTUGAL”SINCE 2013He fell in love with the Portuguese capitalwhen it was still “a rough diamond”. Heliked the open-mindedness and the desireto change that he felt in the country andhe decided to invest. At the age of 44,Claude Kandiyoti, CEO of Krest Real EstateInvestment, already has businesses in all thereal estate sectors: from industrial premisesto offices and more recently hotels. He hasbuilt a new hotel in Lisbon, and he willshortly start building houses in prime areasof the capital.16 P A N O R Â M I C A

What made you fall in love with Portugal/ Lisbon? When we arrived inLisbon, the city had not yet gone throughthe big transformations that we arewitnessing today. It felt like an untoucheddiamond, a city preserved with greatpotential. We spoke with many residentsand we felt that there was an openmentality for change with at the same timea wish to preserve the essence of the city.It inspired us to analyze the potential ofthe market at a time when very few foreigninvestors dared investing in the country.Why did you come to Portugal? In terms of the as easy as possible and the result is there, moreWhen did you come? local authorities, foreign investors in the past 3 years.Through our core business, textile trading, you can feel thatwe have been operating in Portugal for the there has been a What recommendations would youpast 25 years. Portugal is our second market real change in the give to a new investor in Portugal?in Europe, a strong one therefore we have past few years. Analyze well the market. If possible findalways had a strong presence. As a part of The processes are local partners who know the market and whothe industrial economy of the country we saw more efficient, would be incentivated to make the projectthat the real crisis was not in 2011-2014 particularly in a success. Have a good lawyer and taxbut rather in 2008. All the economic factors Lisbon adviser from start.at least in our industry were on the green.That is when we decided that there was a Do you think there are enough When did Krestlis Real Estategood window of opportunity to invest in the incentives for international investors Investments start its activity inreal estate. to come to Portugal? Portugal? What were the initial goals? There are some good incentives for investments Our company had already built a warehouseWhat is your opinion of the in Portugal. Two of them being the Golden in 2010 in Paços de Ferreira. We started toPortuguese real estate market? visa and the Golden tax which have attracted analyze the Lisbon real estate in SeptemberSince we entered, the real estate market in many foreign investors into the country. There 2013. We made our first acquisition inLisbon has risen by at least 30% in value. are questions though about the future of these February 2015 which was a package ofWhile there are still opportunities one ought reforms. In terms of Real Estate, the incentives building hosting ministries. Our goal wasto be very vigilant in term of prices and the for redevelopment are good and there are initially to buy a patrimonial portfolio rentedtype of product which might not always be some tax system incentivizing to invest more. for long term period by government entities.suitable for the market. To summarize, the incentives are good, the way We never believed that Portugal was going to to obtain them is not always clear but there is be bankrupt. We then started to acquire someWhat is your experience as an a will to make the journey for foreign investors land for future development.investor/developer in Portugal? Isit difficult or easy? What are Krestlis Real EstateFirst of all Portugal has very experienced Investments goals for Portugal in theand creative architects, who work in a next years?very efficient way. Our team here is very Since 2013 Krestlis has grown in Portugalprofessional and we are in time in our and we are touching today every area ofschedule. In terms of the local authorities, real estate. Starting from warehousing,you can feel that there has been a offices and lastly hospitality with thereal change in the past few years. The development of a new hotel in Lisbon.processes are more efficient, particularly in We will soon start developing someLisbon through its new Master Plan which residential in Lisbon prime locations.made the delays in licensing much short. So we are in Portugal for the long term.So far my experience is excellent becausethere is a strong will of cooperation betweenthe public and private sector, that is one ofthe key element to attract investors. P A N O R Â M I C A 17

QuickviewCOMMERCIAL REAL STATE IN 2017ECONOMIC GROWTHDRIVES INVESTMENTOF OVER 2,000 MILLIONEUROSAccording to the latest CBRE study, “Outlook 2017”, in 2017 the volumeof investment in commercial real estate should exceed 2,000 million euros,surpassing the amount invested in 2015.This report was prepared in the context of In the industrial and logistics sector, the 15 stores in buildings that are being totally an estimated sustained economic growth, need to develop built-to suit projects should remodelled for residential occupation will associated with a fall in unemployment, a lead to an increase in prime rents and become available. With regards to shoppingrecovery in investment and a continued rise in medium and long-term contracts in order to centres, 2017 should see the expansion ofprivate consumption attract the interest of developers. Investment Colombo in Lisbon and NorteShopping in Porto. in low temperature storage facilities it is also At the same time, a number of shopping centres The document forecasts that in 2017 forecasted. will strengthen their position by remodelling theinvestors will begin to undertake house building leisure areas, especially the food courts, restprojects and favour large scale transactions, NEW RETAIL BRANDS areas and children’s play areas. As for rents,whereas up to now they have been more active The study also foresees the expansion and the market recovery and the limited availabilityin the residential refurbishment sector. of shops in prime shopping centres will lead to entry of a number of food and non-food retail increases. Interest in development should also be brands, attracted by the growth in tourism.seen in the office sector and in the first HOUSING: RENTS AND HIGHERstudent accommodation construction projects In Chiado, in Lisbon, as well as in Santa SALES VALUESundertaken by international investors. The Catarina in Porto, the scarcity of spaces for rentstudy suggests that prime yields will stabilise will drive up prime rents. While in Avenida da In the housing sector 2017 will be marked byalthough there may be decreases in some Liberdade supply will be greater, as this yearsectors depending, above all, on changes inPortuguese debt interest rates.OFFICES AND INDUSTRIAL: NEW REAL ESTATE INVESTMENT 2042 157COMPANIES, NEW OPPORTUNITIES BY SECTOR IN PORTUGAL 330 1401 1311 437 In the office market the report points to the 1402: TOTAL INVESTMENT 442arrival in Portugal of new companies from theBusiness Process Outsourcing (BPO) and IT 829 181sectors that will require quality buildings with 987 169large areas per floor. However, the availability 62of such spaces is still limited, which could 947 51continue to be the case in the next two years, 385 81since the buildings under development have 123reduced space available. 711 142 195 Therefore, we can expect to see three or four 106 419large scale construction projects starting up 637during the year. At the same time, we should 307expect an increase in the number of pre-let 898agreements, although their occupation will notimpact on 2017. 2004 2004 2005 2005 Since the availability rate will continue to fall 2006 2006in all office zones of Lisbon, prime and average 2007 2007rents can be expected to rise in most zones. 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 : OFFICES18 P A N O R Â M I C A

the shortage of apartments for rent which will ECONOMIC GROWTH INVESTMENT ESTIMATE FOR 2017:lead to an increase in the amounts charged. – DROP IN UNEMPLOYMENT – OVER 2,000 Supply should remain low with little diversity GROWTH IN PRIVATE MILLION EUROSthis year and the next. The limited number of CONSUMPTIONproperties available to be refurbished in thecapital’s historic heart means new buildings FORECAST OF HIGHEST VOLUME OF INVESTMENTwill have to be constructed to meet the strong IN THE LAST 17 YEARSdemand. According to CBRE’s analysis oneor two construction projects should begin this INVESTOR INTEREST IN 2017 GROWTH IN TOURISMyear in Lisbon. As for prime refurbishments inthe historic heart of the city, there is likely to Housing construction projects Opening of over 20 hotelsbe a slight rise in sales prices since supply is Growth in retailincreasingly conditioned. Construction of 3 or 4 large scale projects in the offices sector Growth in food and beverageTOURISM REMAINS STRONG The hotel sector should continue to grow Construction of student accommodationwith the opening of over 20 new hotels,the majority of them in Lisbon. RevPAR (revenue per available room) inLisbon, should continue to rise in 2017, dueto the increase in the average price foreseento stand between 5% and 10%. In Porto toothe price of hotel units should continue to rise,while occupation rates are also expectedto continue to increase. As for the Algarveregion, we can expect an increment inthe occupation rate in the shoulder season(the period between the peak and off-peakseasons) and, consequently, a generalincrement in the occupation rate as well asthe average price.1131 263 1177 2972004 96 2004 16 2005 472 110 2005 4 2006 371 123 2006 67 2007 767 170 2007 139 2008 439 154 2008 2009 50 148 2009 42 2010 437 2010 41 2011 71 23 2011 0 2012 16 53 2012 2 2013 175 64 2013 1 2014 546 2014 3 2015 19 2015 2016 562 5 2016 74 7 38 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016: RETAIL : INDUSTRIAL AND LOGISTICS : OTHER PA N O R Â M I C A 19

MARKET WATCH01|HIGH STREET RETAIL TOURISM DRIVES BUSINESS H igh street retail will record new growth this year, IN OLD LISBON AND PORTO driven by the increase in tourism and by urban redevelopment. In Avenida da Liberdade alone RETAIL IS some 17 new stores are expected to open from 2017 to BACK ON 2018. New units are also due to open in Porto. THE HIGH STREET In 2016 the retail turnover index and the retail trade confidence index stood at the highest level for the last ten High street retail is increasingly back years. Tourism which had a very positive impact on high in fashion. It had a fresh start with the street retail also set a new record last year with 53.5 increase in tourism and the restoration million nights in hotels, which accounts for an increase of of several historic buildings that house around 10% when compared to 2015. new brands and new forms of business. Shopping in the open-air CBRE also estimates that high street retail will continue is now a trend. to rise this year, on the back of the increase in tourism and the refurbishing of a number of buildings in the country’s20 P A N O R Â M I C A major cities. The tourist trade is benefitting the retail zones and food and beverage establishments, especially in the most visited areas of the cities. The public works being undertaken in Lisbon are giving birth to wider pavements with space for pavement cafés and leading to the opening of gourmet restaurants that are much sought after by the Portuguese and tourists. In Avenida da Liberdade, the capital’s prime high segment retail zone, 17 new stores are expected to open between 2017 and 2018 in entirely restored buildings. In Chiado, particularly in Rua Garrett, available spaces are scare and those that are vacant are quickly occupied, which will contribute to the rise in rents. Given the shortage of space, brands will begin to expand to the side streets of Rua Augusta and thus increase retail supply in this area. This increase in high street retail is spreading quickly to other zones in Lisbon, such as Príncipe Real, Alvalade, Restelo and Av. Roma, a reversal of the trend seen in recent years.

High Street Retail Carlos Récio DIRECTOR RETAIL ADVISORY & TRANSACTION SERVICESGiven the shortage of When the CBRE study councils have made an effort tospace in Chiado, brands “Property Market Trends modernise infrastructures andwill begin to expand to 2017” was presented you “humanise” locations- This hasthe side streets of Rua mentioned that it would helped to make zones moreAugusta and thus increase be a “great year for attractive and more sought afterretail supply in this area high street retail”. What by operators, thus creating leads you to believe that synergies and new opportunities. In Porto, in Rua de Santa Catarina – the major high street traditional retail will be on Finally, the specific renewalretail area – there should be new increases in prime rents a high in 2017? of city zones has contributedof around 10% due to the shortage of available spaces. to the transfer of corporateAvenida dos Aliados is stepping closer to being a prime All the indicators we have headquarters (for instance, to theretail area in the city. Last year saw the sale of a number of point to a continued trend seen riverside area of Lisbon) whichbuildings in this street and their refurbishment is expected to in recent months, which has helped to create new retailbring new opportunities in terms of attracting premium and contributed to strong growth development hubs.luxury brands. A number of new stores should open in 2017, in high street retail. Thisalthough the area will only be consolidated in 2018 and dynamism is based on: What part did urban2019. 1 – The availability of new renewal play in the premises/market opportunities growth of high street At the same time, new food and beverage units (without them it would be retail?establishments are expected to open in Rua das Flores, Largo impossible to meet the existing Urban renewal has playedde São Domingos and Rua Mouzinho da Silveira. demand) and the vitality seen a very important part. The in urban renewal, which played change in the lease law together a crucial role; with the dynamism in the 2 – Continuous growth in the refurbishment sector has brought number of tourists visiting new properties to the market Portugal, with new records being and introduced a residential set yearly; component to zones where 3 – An explosion in specific normally opportunities and businesses such as food and residents do not exist (they were beverage, which is enjoying zones used to services that had a boom and the appearance run-down or vacant buildings). of new concepts developed by national and international Do you think this growth operators, in most cases highly trend in high street retail qualified and professional. will continue in the coming years? Do you think this trend is Yes, as I said earlier, the spreading to other zones indicators that sustain high in Lisbon and Porto? If so, street retail development why? are unquestionable and no Definitely. The dynamism that significant changes are expected was initially concentrated in that could lead to a decline in the historic areas of Lisbon and them or a U-turn. On the other Porto, ended up spreading to hand, the shopping centre other zones. On the one hand, market is a mature market that because the urban centres has reached its peak in terms and most popular streets have of growth, and some centres or reduced capacity, and on the locations will be less competitive other due to the fact that local than high street retail. P A N O R Â M I C A 21

MARKET WATCH02|RETAIL MANAGEMENT POWER COMES FROM EXPERIENCE The shopping centres managed by CBRE are reinventing themselves in order to offer consumers new experiences. Efforts are directed towards renewing food courts and leisure areas, pop up markets and events such as workshops and concerts. Forum Aveiro and Alameda Shop & Spot are good examples of this.22 P A N O R Â M I C A

A t a time when shopping centres Therefore, on floor 1 there is a new food court Mocho, Pink Movement and Ás de Copos. are competing for the attention with four sections: one for quick meals and one These events produced proven results of consumers who see high street for meals in groups; a lounge area so visitorsretail and online shopping as alternatives can spend more time there, and an area for that had a major impact amongst local andwhen buying, these spaces have reinvented outdoor meals. In addition, the new court is fully national media, and also led to repetition ofthemselves and now provide continuously air-conditioned and offers free wi-fi. many of the brands as they rented temporarymore complete experiences. spaces in Alameda Shop & Spot. The idea is to provide increased comfort, Shopping centres are still Portuguese life and vibrancy to the customer experience, Alameda Market is currently an ICSCshoppers favourite place (69%), when in line with the new consumption trends, as Marketing Awards finalist.compared to high street (9%), according implemented in Alameda Shop & Spot. Atto figures published in “The Consumer that shopping centre, near the Estádio do A strong supplyExperience” study conducted by CBRE in 13 Dragão football stadium in Porto, a new pop in this area fits incountries to over 13,000 consumers across up market concept was introduced, Alameda with the notionEurope. Despite these results the trend is Market. It is an interior market inspired by the that a visit to adownwards and the European average is now architecture and commercial dynamics to be shopping centre55%. On the other hand, online shopping is a found in the major European cities, in order is a leisure activityreality, with 15% of the Portuguese preferring to attract new brands and new themes to this and not just athis to shopping in a store. retail space. desire to shop A shopping centre is more than the sum of Thus, every weekend from October toits parts: it is worth the value proposal it offers December in 2016 Alameda Shop & Spot’sto consumers. A strong supply in this area fits central plaza hosted ten different Pop Upin with the notion that a visit to a shopping Markets, built on wooden and iron pallets,centre is a leisure activity and not just a desire which welcomed over 100 different brands.to shop. Alameda Market also had a lounge, an events stage and diverse programmes, such For this reason, last year Forum Aveiro, as workshops with bloggers, performanceswhich is managed by CBRE since 2014, and concerts. In order to implement this newreceived a new food court with a different concept. Partnerships were established withconcept: a completely renewed space, that is famous people and entities including Mariamore modern, functional, has natural light and Cerqueira Gomes, Maria Gambina, Inêssophisticated decor.Luís Teodoro What is the remodelling projects stores and the common to the fact that some importance of the under way? areas and services. of the food outlets are DIRECTOR consumer experience Yes, at the moment there is associated with unhealthy to shopping centres? the Nosso Shopping project “The Consumer food. However, in recentASSET SERVICES At a time where there is and there are very likely Experience” study years the market has taken strong competition not to be others in the near also showed that, on board food concepts only between shopping future. with regards to food of higher quality that centres but also with other and beverage, 69% have a better image, and shopping destinations, such What other services of the Portuguese sometimes at higher prices as high street retail and do shopping centres look for places that than traditional fast food. e-commerce, the consumer provide, and to what can provide quick On the other hand, we have experience in a shopping extent are they still service along with seen remodelling that have centre is of the most the first option for the quality that exceeds improved the experience importance and brings Portuguese? that of the Fast Food of shopping centres giving added value compared to At the moment, we chains. To what rise to more comfortable, the alternative shopping are working on and extent will this fact better decorated food destinations. preparing a “customer affect shopping centre courts aimed at a different experience” strategy for positioning? type of consumer, that Forum Aveiro is an the shopping centres under The Fast Food image that is are connected to outdoor example of CBRE’s our management aimed associated with these food areas, as well as other investment in the at improving the entire courts is due above all to improvements, that have customer experience. customer experience, from the fact that these places greatly benefited the Are there other the moment one enters the are generally unappealing experience of having a shopping centre car park and including the and uncomfortable, and meal in a shopping centre. P A N O R Â M I C A 23

MARKET WATCH03|OFFICESLISBONRANKED THE26TH MOSTTECHNOLOGICALCITY Technology is changing the world: this sector L isbon was ranked the 26th most technological city absorbs an increasing part of the labour force out of 35 European cities rated by CBRE. According and the real estate market is not indifferent to to the ”Understanding European Technology these changes. A few years ago, the financial Clusters” study, the technology sector has been the and banking sector was the market leader in driving force behind the office market in Europe since office occupation, today it has been overtaken 2010. In this report, which analyses the main features of by the technology sector. technology clusters and seeks to understand the business opportunities offered by technological and emerging24 P A N O R Â M I C A cities in Europe, London came out on top, followed by Paris, Berlin, Munich and Madrid. The technology sector will continue to grow and to drive growth in the office market and its contribution has exceeded that of the finance and banking sector for the last five years. In the European core office markets, technology companies accounted for less than 10% of take-up in 2008-2009, but rose to 16% in December 2016. This trend can also be seen in Portugal. A good example of this is the BNP Paribas group that chose to locate its shared services in Portugal, withdrawing mainly from North Africa and Eastern Europe. At the moment, it has around six thousand employees spread over an area of 60,000 sq m in Lisbon and 15,000 sq m in Porto. The speedy development in the technology sector is also contributing to the increase in the employment rate in Europe, which rose by some 9% from 2010 to 2015, compared to a growth of 5.5% in other business sectors.

From the 35 “London and Paris are the leading technological MAJOREuropean cities cities in Europe” TECHNOLOGICALstudied, London CITIES IN EUROPEcame out on top The British capital is thought to be the world leader in tech companies, thanks to its location, 1 LONDONThis trend should continue in the coming years. In Lisbon, language, legal and political structure, financialthe employment rate amongst tech companies recorded system and the existence of business clusters. 2 PARISgrowth above the European average of 15.4%. The report also identifies emerging European 3 BERLIN In Portugal, we are also witnessing the transformation of tech companies which are seeing the highestcertain companies, such as consultants and marketing and growth rates, as is the case with Bucharest, 4 MUNICHadvertising agencies, into digital companies. The Web Budapest and Istanbul. For their part, London,Summit – the largest conference on entrepreneurship, Munich and Paris have lodged the highest number 5 MADRIDtechnology and innovation – which was held in Portugal of high tech patent applications with the Europeanfor the first time in 2016 – also acted as a stimulus for Patents Institute. 6 DUBLINthe technology sector. Another edition is planned forNovember of this year. Technology covers a wide range of activities, although some hubs manage to attract specific The opening of a new Creativity and Enterprise hub subsectors. For example, digital advertising carriesin Lisbon has been announced. It will be housed in the significant weight in Berlin, while IT services areformer Military Manintence Base in Beato and will be a more represented in Budapest.benchmark place for the capital and the country, with itsmaster plan being completed by the end of the year. This “London and Paris are the leading technologicalproject includes zones for business incubators, food and cities in Europe”, as Richard Holberton, Seniorbeverage, artists residences and support services and will Director of Research at CBRE explains. Theseemploy approximately three thousand people. European cities are seeing “strong demand and a wide variety of tenants, in terms of both type and All these factors, which have been present since 2010, size”. Nonetheless the CBRE study shows that therealong with the interest shown by companies, wishing to is broad range of attractive technological centres.enter Portugal, confirm this trend is here to stay. “Hamburg, Sofia and Warsaw are technological hubs that are increasingly important in Europe. Cologne, Turin and Utrecht continue to experience large concentrations of employment in this sector, while Lyon and Zurich should see more significant growth in tech employment compared to other, larger, cities”, adds Holberton.André Almada Do you think it is important that Has this phenomenon had an 7 BUDAPEST Lisbon is ranked 26th amongst impact on the office market in 8 BUCAREST SENIOR DIRECTOR Europe’s most technological our country? Which companies 9 ISTANBULOFFICES ADVISORY cities? are seeking to concentrate their 10 TEL AVIV Undoubtedly appearing in the ranking activities in this sector? 26 LISBON & TRANSACTION of Europe’s most technological cities is Given that technology is key to near SERVICES a reason for Portugal to be proud of, shore companies, its impact has been especially the city of Lisbon. enormous on the Lisbon office market Portuguese have the capacity, curiosity since 2009. We can confidently state and capability for new technology, that over the last 8 years this segment which together with their entrepreneurial has been responsible for the take-up of spirit are certainly factors that have over 200,000 sq m, which represents contributed to that performance. around 30% of the total offices area placed from 2009 to 2016. What can Lisbon do to move up in this ranking? I believe Lisbon’s rise up in the ranking is irreversible. Conditions and incentives are being created by the political, local government and business sectors that stimulates the segment through projects such as the Web Summit and the Beato Creative Hub. P A N O R Â M I C A 25

MARKET WATCH04|LOGISTICS ONLINE SHOPPING INCREASES DEMAND FOR WAREHOUSES NEAR MAJOR URBAN CENTRES E-commerce is driving the rise in demand for storage facilities close to major cities. That is the conclusion of the “Last Mile/ City Logistics” study conducted by CBRE which compared different consumption habits in a number of countries.26 P A N O R Â M I C A

As e-commerce grows Nuno Pereira da Silva and modifies the market, the use of ASSOCIATE DIRECTOR vertical structures INDUSTRIAL & LOGISTICS ADVISORY & TRANSACTION SERVICES will inevitably be an influential factor in In Portugal, we are At the same time, logistics growth on also beginning to a number of logistics the urban perimeter feel the need for the operators are studying last link in the supply existing structures with theThe growth in internet shopping is challenging the supply chain, chain to be closer to purpose of vacating these replacing regional logistics platforms by an urban logistics model. major cities? Are there sooner or later, given the Retailers and distributors are being pressured to make deliveries figures? need to readapt to the newto their clients within ever tighter deadlines, and this is leading to the Yes, there are no concrete reality.need to create storage units near major cities. figures at the moment but Portugal is no exception What is the demand This transformation in consumption, seen on a global level, has been to the rule, and buildings growth forecast forbrought on by the so-called “millennial generation”, young people have been adapted for this type of space,aged between 22 and 29 who are used to immediate satisfaction. It this purpose, especially in namely warehouses,is a generation that is increasingly opting to shop online and wants to Lisbon and Porto. At the for the coming years?receive its orders at home or at the office, on the same day, or within same time, we are aware We are expecting growth24 hours. of a number of projects for this type of space, that logistics operators but that growth is very This is where the online shopping platforms come in: they are are attempting to develop dependent on investornow beginning to offer real time information on the shipping of the in this direction, buying sensitivity and demand,products, their location and the estimated delivery time. new structures or adapting since generally logistics existing ones. operators are not property As e-commerce grows and transforms the market, the use of vertical owners.structures will inevitably be an influential factor in logistics growth What impact is thison the urban perimeter. There are already a number of innovative phenomenon having Can you give us somestrategies in the final link in the supply chain to meet this demand. They on real estate? national examples?include multi-floor warehouses, self-service lockers, collection points This phenomenon has Examples of logisticsand storage centres, that are beginning to take shape near cities. led to the readapting of platforms that have adapted effective demand for space to this reality are the Sonae Therefore, the last link in the supply chain has become a real from logistics operators, warehouse in Telheiras andchallenge for retailers and suppliers, bearing in mind the convenience specifically in terms of the Chronopost logisticsand speed demanded by these consumers. This new reality has led existing warehouses and platform in the north –logistics operators to adapt, developing new distribution chain formats building land, near major Alfena, which was builtand consequently, new buildings for this purpose, adapting to market cities. from scratch.demands, in order to survive in a highly competitive sector, creating agreat opportunity for the real estate sector. P A N O R Â M I C A 27

MARKET WATCH05|RESIDENTIAL FOREIGNERS INCREASING IN THE RESIDENTIAL SECTOROUR NEWNEIGHBOURS The number of foreigners who are leaving their country of birth to come to live in Portugal is on the rise. Safety, good weather, beaches, as well as golden visas and tax incentives have all contributed to the increase in the sale of homes to foreigners, a trend that is expected to continue in 2017.28 P A N O R Â M I C A

G olden visas and tax incentives are Chinese investors, who can benefit from NUMBERS attracting an increasing number golden visas, have purchased less houses of foreign residents to our country. in our country, and accounted for 7% In 2016, 23% of homes sold inBut they are not the only reasons: as well of total units sold last year, compared to Portugal were purchased byas being a safe country, Portugal, is thought 18% in 2014. foreigners.to be an excellent destination, due its fineclimate, singular cuisine, coupled with the Foreign investment in Portugal should French investors purchased thestability that it conveys to small and large continue to grow in 2017, especially most homes, benefitting frominvestors alike. These reasons have supported French investment. Nevertheless, the non-permanent resident status.growth, not just in tourism, but also in the situation may be influenced by the outcomeresidential property sector. of this year’s presidential elections, if the British investors were the second future leader chooses not to pursue a policy largest purchasers of homes in our The residential market in our country has of taxing wealth. country in 2016 with a market sharebeen recovering over the last four years, as thenumber of homes sold have increased, mainly In addition to French investors, the of 18%.as a result of sales to foreigners and small Swedish, Danish, Belgian and Dutch marketsprivate investors. should continue to grow compared to the The purchase of homes by Chinese British market which could slow down in citizens, covered by the Golden Visa According to the official House Price Index, 2017, due to the instability of the pound, scheme, fell to 7% in 2016, comparedfollowing a series of falls, the total number while the Irish market should begin aof homes sold has been increasing by 14% recovery. These figures can be found in to 18% in 2014.per year since 2012. Based on the growth CBRE \"Real Estate Market Trends 2017\"recorded in the first three quarters of the year, study, which predicts that this year will alsoCBRE estimates that in 2016 around 130,000 be marked by an increase in the number ofhomes were sold, the same number as in Turkish investors, given the current instability2010, a growth of 20% when compared to the in that country.previous year. A large portion of the product that hasThe French were the main foreign investors been developed is aimed at the foreignin Portugal market and short rentals, while there is a shortage of suitable housing for the national According to figures published by the market, in terms of both type and price, asPortuguese Real Estate Professionals and Brokers well as for sale and rent. The majority ofAssociation (APEMIP), in 2016, around 23% of properties on offer are part of refurbishedthe homes sold in Portugal were purchased by buildings converted into small apartmentsforeigners. Amongst the foreign investors, the (studios, T1 and T2), that have little or noFrench purchased the largest number of homes parking space, an American style kitchenin Portugal, taking advantage of the tax rules and high prices, compared to the typicalfor non-permanent residents, and accounted financial standing of the national market.for around 25% of all sales, followed by theBritish with 18%, according to the CBRE report Bearing in mind projects under“Portugal Property Perspective 2017.” construction, supply will remain small and undiversified in 2017 and 2018.Frederico Mendonça Will this year (2017) with Portugal and the house in Portugal with the We can indeed feel a be marked by the Portuguese. tax savings alone. On the slowdown in the British DIRECTOR arrival of a number of other hand, we are talking market, despite the fact that Turkish investors? What is it that attracts about countries, which the impact of Brexit appears RESIDENTIAL ADVISORY Turkey is going through a investors from Benelux climate is too aggressive to be less than expected particularly complicated and Scandinavian for retired persons, making (although there are no & TRANSACTION SERVICES time, both politically and countries to our the idea of coming to a official figures available economically. It is to be country? Southern European country yet). As for the Irish market, expected that a significant In this market, we have even more attractive: where the feeling is that this number of people will have more incentives other than in winter the sun sets at 6pm market will recover in 2017, a “plan B”, in case the taxes. Taking Sweden as and not 2pm. On top of this mainly for cultural reasons. situation becomes worse. an example, we have an there is the possibility of First of all, the Irish feel Portugal is very well placed explosive combination. A playing golf in 15ºC almost very close to Portugal, with to attract residents from that Swedish couple that has an all year round. regards to holidays as well country. First of all because income of 60,000 euros as investment. Secondly, we have a very strong and annually, loses 56% in You feel that the because it is part of the Irish efficient system for acquiring income tax, where as if they British market will culture to buy an overseas a Residence Permit based move to Portugal as a tax slow down in 2017 property, and this is a on Investment (Golden Visa) resident there is a strong while the Irish market socially important factor. and, secondly, because possibility they save those will begin a recovery. Turkish people identify 56%, and use it to buy a Why? P A N O R Â M I C A 29

MARKET WATCH06|TOURISM PORTO RECORDED A RISE OF 18% IN OVERNIGHT STAYSPORTO, THEDESTINATIONOF CHOICEIN 2017 The city of Porto could not be more fashionable. This year it was voted the best European destination, winning this award for the third time. The spotlights are increasingly shining on the north of the country, causing tourism, urban renewal and the restaurant industry to rocket.30 P A N O R Â M I C A

Porto won the best European destination Porto has gained new impetus from winning Porto also recorded demand in the offices category this year, having already won several national and international awards sector, in 2016, especially amongst tech the award in 2012 and 2014, and and this third best European destination companies and Business Process Outsourcingfinished ahead of Milan (Italy) and Gdansk prize, awarded in 2017, means the city companies, where gross uptake of offices was(Poland) on the podium for the three most will continue to earn greater international around 40,000 sq m in 2016, more thanvoted cities. acclaim. In 2016, Porto recorded a rise double the area occupied in the previous year. of 18,94% in overnight stays compared to The title is awarded by the European 2015, totalling 2.8 million. Porto has wonBest Destination organisation, located in the best EuropeanBrussels, Belgium, following an online vote The increment in tourism in Porto has led destination foramongst travellers from 174 countries. The to an increasing demand in the city’s main the third timeaward shows how attractive Porto is to both thoroughfares, with 19 new stores openingsthe Portuguese and tourists from around the in Rua de Santa Catarina, Clérigos andworld. This international recognition has Cardosas, most notably New Balance in Ruamade tourism in the city to rocket in recent de Santa Catarina and the Hard Rock Caféyears causing a major impact on urban next to Avenida dos Aliados. At the samerenewal – particularly in the city’s historic time, a number of restaurants have openedcentre – and driven the appearance of new in Rua das Flores, in Largo de São Domingoshotels belonging to national and international and in Rua Mouzinho da Silveira. In 2017, achains, as well as new high street stores and number of internationally renowned hotels willrestaurants. also be built or open in Porto. PRIZES – PORTO Eduardo Abreu, Local Accommodation legislation. attract tourists for whom shopping is a 2012 Restaurants, in more frequented supplementary source of motivation. PARTNER, NEOTURIS, areas, are also sought-after assets for The planned cruise ship terminal Best European Destination developing new concepts and taking may also contribute to market PARTIALLY OWNED BY CBRE advantage of growing demand. diversification. 2014The city of Porto was elected How would you rate what This year changes in Best European Destinationthe best European destination Porto has done to attract the legislation on localfor the third time. What will Tourism? accommodation are expected. 2017be the impact of this award I rate it highly. In particular the Why do you think that “weon tourism and subsequently policies to attract and develop new will see the creation of new Best European Destinationurban renewal, real estate, airlinks, the development of new units in this category, as wellhotels and food and beverage? issuer markets, public and private as the withdrawal of the less 2,8Tourism has been thriving in Porto investment in visitor attractions, the professional accommodation?in recent years, with the annual emphasis on urban renewal and As I said before, the tourist perimeter Million overnight staysgrowth rate in overnight stays up by cross-selling with other regions such in Porto is currently small and Up 18.9% on 2015around 10% from 2009 to 2016. as Minho and, especially, the Douro consequently the number of propertiesLast year recorded the largest growth Valley. is reduced; this immediately implies 40.000 m2in a decade with an increase of there will be a slowdown in the Gross take-up18.9%. The growth resulting from What do you feel is still creation of new units. of offices in 2016the award has a transversal impact. missing in this field? As for existing units, and without P A N O R Â M I C A 31In tourism because it retains the Rather than what is missing, it is wishing to speculate about possiblecity’s visibility and interest amongst important to push on with the existing changes in legislation, it is naturalinternational tourists visiting the measures, namely it will be important that the less professional ones willcity, in urban renewal as it attracts to promote geographical dispersal in tend to close if operating requirementsinvestors to at least three asset supply (and consequently in demand) become stricter; currently this type ofcategories: hotels already operating, so as to attenuate the concentration accommodation with its lower ratesbuildings awaiting refurbishment for of tourists within limited areas of the of return (since they are occupieduse as hotels and short-term rental city. It is also important to bring retail less and at lower prices) is alreadyapartments, taking advantage of the back to the centre of Porto; the Bolhão suffering with the tax increase. Market renewal and the renovation of The bottom line is that as with any commercial premises in Rua da Santa market where entry and exit barriers Catarina could contribute greatly to are low, there will be a tendency for geographical dispersal and to the best to succeed.

TrendsMILLENNIALSMILLENNIALSHOW DOES THISGENERATION LIVE?They were born between 1980 and 1996, they see life differentlyto their parents, they bring new habits, behaviour and priorities– they are the Millennials. To better understand this generationCBRE undertook the “Millennials: myths and reality” study.Among people aged 22 to 29, some and personal life becomes one of the 65% prefer to rent rather than most important factors, as well as a good buy a home, due to their lack of workplace environment.financial standing. As regards shopping, almost half of the That is one of the conclusions of the respondents look for immediate access to aCBRE study “Millennials: myths and reality”, product. The millennial generation likes towhich comprised 13,000 interviews in 12 see, touch, feel and test the product in thedifferent countries. shops, so only 27% of purchases are made online. However, the popularity of internet The report was aimed to assess how the so- shopping varies greatly from country tocalled millennial generation lives, works and country. In countries where internationalplays, as well as their impact on future trends retail networks are well established, onlinein the real estate market. penetration is much higher than in countries where retailers are locally based. It is The study shows that these young people clear that when the millennials make onlineface significant difficulties when searching purchases they wish to receive the goodsfor places to live, above all due to the high immediately at home, at the workplace, or asprice of properties and rents, as well as their a last option, via click and collect.job insecurity. Almost half of the millennials(49%) still live with their parents and 74% For these young people leisure is ansay that their salaries do not keep up with increasingly important part of their lives, andproperty prices, which is one of the main 50% of their earnings is channelled to eatingreasons why they still live with their family. out, shopping, movies and shows. The study underlines that 64% of these The millennial generationyoung people feel lucky to have a job and likes to see, touch, feel andwould like to work for a limited number of test the product in the shopscompanies over the course of their career.Nonetheless loyalty to an employer is nothigh, given that workers are willing tochange job should a better opportunitycome along in terms of salary, training,professional development and the chance towork with people with similar interests. According to the study 78% of therespondents say the quality of the workplaceis a key factor when choosing a company towork for. The salary and the perks continueto be the main factors when choosing ajob. However, if money is taken out ofthe equation, the balance between work32 P A N O R Â M I C A

The report assessedhow the millennial generation lives, works and plays SOURCE: CBRE STUDY HOME JOB 65% 64% of young people of these young peoplechoose to rent instead feel they are lucky to have a job of buying a home 78%49% say quality in of millennials the workplace still live with is a key factor their parents INCOME OUTLAYS74% 27% of these youngsay that their earnings people’s purchases do not keep up with property prices are made online70% 50% of these young people’s purchases of their income is spentare still made in shops on meals, shopping, movies and shows P A N O R Â M I C A 33

Wo r k f l o wN E W WAY S O F W O R K I N G ( N W O W )THE BESTOFFICES TOWORK INThey are the true offices of the future I f your company is to design that increases productivity,and are revolutionising the way we grow, does your office while cutting costs and increasingwork. The “New Ways of Working” also need to grow? employee satisfaction.concept favours a new workplace Will you be able to increasemodel: more modern, versatile and productivity and satisfy staff This concept places CBRE ininnovative design, based on people by changing your working the vanguard of Office Design,and not hierarchies. space philosophy? Is it really and translates into a modern, necessary to go to the office flexible and more collaborative34 P A N O R Â M I C A every day? working environment. CBRE thought about this and other questions and decided This concept is based on a to adopt the \"New Ways of versatile and inspirational layout, Working\" concept, a model based on tasks and which has with a new philosophy and been adopted in offices such as Lisbon, Prague, Warsaw, Amsterdam, Los Angeles,

Chicago, Madrid and Toronto, with the laptop and documents concentration, interaction and, LISBOAas well as in other client offices. relating to their projects. With even, confidentiality required in this model, the office can be every situation. also include the paperlessNo reserved seats designed and structured to concept, limiting the number of According to an analysis create other types of space Thus, flexible work printed documents. As well as the and work, but at the same time encourages employees to opt savings on paper and recycling,conducted by CBRE in its offices, encourage cooperation and for the workplace that best it is also possible to reduceindividual workplaces are only better relations between staff and matches the task at hand. energy costs.occupied around 50% of the teams. According to CBRE, opentime. Therefore, under this new space offices are outdated: an In the Lisbon office, there CBRE is already implementingconcept there are less individual innovative office encompasses are three types of space: work \"New Ways of Working\" in localworkplaces and no reserved different environments and work areas, meeting and telephone and multinational companiesseats. Each member of staff spaces, that take into account, conference areas – for in Portugal and throughout thehas their own locker to store for example, the degree of individual or team use – and world.their personal belongings along more informal meeting areas. The new ways of working P A N O R Â M I C A 35

LOS ANGELES CBRE is already SYDNEY implementing the \"New WaysTOKYO of Working\" 36 P A N O R Â M I C A in local and multinational companies in Portugal and throughout the World.

CHICAGO MADRID HONG KONGMEXICO CITY P A N O R Â M I C A 37

InnovationS O F I A T E N R E I R O , CISCO Portugal Managing DirectorINTERNET OF THINGS“REAL ESTATECOULD BECOMEONE OF THE MAINBENEFICIARIES OFTHE POSSIBILITY OFLINKING PEOPLE,PROCESSES, DATAAND THINGS”Do you know what the internet of things is? that investment will bring infinite in the most intelligent manner. AsThe CISCO Portugal Managing Director, Sofia business opportunities. a microcosm of the Internet ofTenreiro, explains all about the technological Everything, the real estate sectorrevolution that is underway and promises to What impact will IoT have may become one of the mainchange the way we live and work. on real estate? beneficiaries of the possibility of The real estate sector is intrinsically linking people, processes, dataHow would you define According to the Business linked to the way we work and and things. For this to happen it willthe Internet of Things (IoT) Insider´s Intelligence report, live. To give an idea of what I be necessary to take advantageconcept? this silent revolution should am talking about: 23% of global of this opportunity to access dataThe simplest way to define the reach its peak in 2020. electricity consumption is by which are inaccessible at theInternet of Things is to think of a Cisco estimates that 99% of things commercial buildings; 40% of moment and transform them intoworld in which things are linked are still not linked. This means that at a building’s operating costs is information, that may be employedto themselves and to people, the present time around ten thousand lighting; 60% of workstations to take better decisions, providingcommunicating and sharing million things are linked out of an are not occupied throughout the for more efficient organisations orinformation in real time. This will estimated total of 1.5 billion. After day; companies’ third largest new sources of revenue.make it possible to automate the the industrial revolution and the expenditure after salaries and cost The changes associated withright things, reduce risks, bring democratisation of internet access, of goods sold is on real estate and IoT are already underway andintelligence, efficiency and speed the IoT is a technological revolution associated costs. buildings are central to thatto the processes and, therefore, in progress and with enormous Therefore smart, real time transformation.bring uncountable improvements disruptive potential. management of properties based Nonetheless, as the numberto people’s jobs and lives. The It is also estimated that the IoT could on the analysis of information of networks and the need toIoT or the Digital Transformation connect 99.2% of the existing things, received from devices, including link various devices within thewill provide unprecedented from energy networks, factories, access, people’s whereabouts, buildings grow, the associatedefficiency gains and significantly healthcare devices, vehicles, etc. routes and timetables, provides costs and the complexity becomeimprove the way organisations It is said that the 500 thousand visible and immediate advantages unsupportable. The convergence ofcan be managed, aid the sharing million devices will be linked to in terms of cost efficiency and may separate systems such as sensors,of information between people, the Internet in 2030. During this be the difference that enables a lighting, heating, ventilation andsystems, sensors, mobile devices process of change there will be business to succeed. On the other air conditioning, security andand any other smart objects. investment from all parties, from hand, given the profusion of linked audio and video equipment into a the State to private companies, but things, and sharing information in single communication platform is real time with data centres, building key to the digital transformation of management may be conducted buildings.38 P A N O R Â M I C A

CBRE announced the but they are also potential sources Therefore, the advantage, 99,2%opening of a Smart of additional revenue. Cisco has instrumental to the revolution, The Internet ofBuilding Client Experience been a forerunner for this type of of having advanced access Things could connectCenter, in Milwaukee, to applications and the opening up cover and broadband in 99.2% of the existingdisclose the of its solutions to programmers, place. And, lastly, we have things – from energylatest technological with APIs, and the forming of a countless examples of this networks, factories,solutions in the real developers’ community, known as revolution among innovativeestate sector. How can Dev-Net, in which anyone can buildings and innovative healthcare devices,this building facilitate take part for free. public and private services to vehicles, etc.the construction of more citizens and customers.smarter buildings and What is being done 500smarter workplaces? in Portugal in this area? The IoT bringsFor every client, it is essential The latest example is the project opportunities but also THOUSANDthey understand that success developed in partnership between challenges, such as MILLIONexists: both concepts that prove Futebol Clube do Porto and the ability to store atheir efficiency and solutions that Cisco, under which the Estádio do huge amount of data, It is estimated thatmanufacturers or companies bring Dragão football stadium will be a questions of privacy and 500 thousand millionto the market that provide answers model of technological innovation, security. devices will be linkedto challenges they face – be they combining the dynamics of The organisations that manage to the Internet in 2030.cost cuts, increased productivity, a sports and performing arts to take advantage of the dataor the creating of the conditions complex with the latest generation available and transform it intoand the comfort needed to of platform, Cisco Connected strategic information will be thelive or work better. Cisco runs Sports & Entertainment Solutions, leaders in their business sectorExecutive Briefing Centers – to offer the public a customised through digital transformation.which in practical terms are and totally innovative experience. At the same time – faced byexperience centres – that make the challenge of interconnectingthose advantages more visible to When will this all the devices – security alsoclients.You defend the idea that revolution become becomes critically important.networks should be monetised reality in Portugal? With the data explosion willand create value… The revolution is already a come cyber-attacks on “things”Proactive management of buildings reality. – which will have major impactand the respective operations, The globalisation of access in the real estate sector, goingdetection of breakdowns, to things and to devices, also from security cameras tooptimisation of space usage, brought about by the Internet and electricity grids.higher levels of security for the online market, means that Therefore, it is imperative topeople and goods, services that today Portugal is not an island. include security in all decisionsenhance tenants’ comfort and On the contrary, the country relating to the transportingthe experience, guarantee higher has traditionally been an early and processing of this massivelevels of satisfaction and efficiency, adopter of emerging technology. amount of data. Proactive management of buildings and the respective operations, (…) guarantee higher levels of satisfaction and efficiency, but they are also potential sources of additional revenue P A N O R Â M I C A 39

Rooftop10 YEARS 2W220IN000N019E96ROF URBANPHOTOGRAPHEROF THE YEAR To capture the essence of the move: People, Places andurban life at any time of day and Perspectives”.anywhere in the world is the goalof the Urban Photographer of the Moin Ahmed was the winnerYear. The photo competition was of the 2016 edition with a photolaunched in 2007 by CBRE and called 'A Man's Stare', in whichis still going strong today. This he captures the face of a traininitiative aims at rewarding images passenger on a rainy day inof daily life in urban environments, Bangladesh. It is a strong portraitcaptured by photography lovers, of the daily life of these people.and is currently the largestcompetition of its kind. The competition, which invites photographers to submit photos that The first three editions were only transmit moments of daily life inheld in Portugal and were a joint cities, is open to professionals andventure between CBRE and IADE amateurs. Each participant mayuniversity. However, the success of submit up to 24 images, one forthe event was such that it began to each hour of the day. The winnerbe held on a European level, and is is awarded a photography trip forcurrently a global event. two people to the destination of his/her choice. The other prizes The 10th edition of the Urban include categories for drones,Photographer of the Year GoPro and other gadgets linkedcompetition, held in 2016, was to the world of photography.based on the theme “Cities on On behalf of every person who2007 2008 2009 2010 2011 European EuropeanPortuguese Portuguese Portuguese edition edition edition edition edition 14 41 47 6.250 10.000 participants participants participants participants participants40 P A N O R Â M I C A

takes part in the competition, CBRE makes a donation to Plan International to support this NGO’s work in promoting children’s rights and gender equality. “CBRE Portugal is proud to see this competition grow and reach photographers from the four corners of the globe. This is a unique opportunity for CBRE to play an important role in the way we celebrate the diversity of movements in cities, to encourage photographers to capture the essence of the urban environment”, underlines Teresa Posser de Andrade, Director of Marketing and Communication at CBRE Portugal. Over 29,000 people from 111 countries around the world took part in this tenth edition.2012 2013 2014 2015 2016 World World World World World edition edition edition edition edition8.000 12.500 11.500 21.000 29.000participants participants participants participants participants PA N O R Â M I C A 41

Milestones AWARDS WON IN 2016 CBRE was ranked CBRE was named CBRE was named in the ranking Nº1 IN BEST REAL ESTATE of the COMMERCIAL CONSULTANT IN THE WORLD “MOST PROPERTY ADMIRED INVESTMENT by EUROMONEY Real COMPANIES Estate Awards and received SALES prizes in all categories at the IN THE WORLD” throughout the world national level: by Real Capital Analytics by Fortune BEST REAL ESTATE magazine for the (RCA) CONSULTANT fourth year running CBRE was recognised BEST VALUATIONS CBRE was named as the DEPARTMENT one of the MOST ETHICAL BEST AGENCY 100 BEST COMPANY IN OUTSOURCING THE WORLD BEST RESEARCH DEPARTMENT SERVICES for the third year COMPANIES, running by CBRE was named by Lipsey Company the for the 10th year ETHISPHERE running by the INSTITUTE, TOP GLOBAL BRAND IN COMMERCIAL International an independent REAL ESTATE Association research centre of Outsourcing promoting good for the 15th consecutive year. Professionals (IAOP) governance and institutional ethics42 P A N O R Â M I C A



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