PORTUGAL - Real Estate & Construction
CEO, Portugal Homes
David Poston’s entire working life was in sales, experiencing many different aspects of how to look after a client. In 2005 he grabbed the opportunity to come to Portugal with his family and learn all about the Portuguese real estate market by experiencing every type of sale/purchase challenge there can be. He felt welcome in Portugal and has lived there with his family ever since. After being regional manager for one of the biggest real estate companies in the world, his vision to offer investors an unrivalled service drove him to build the Harland & Poston Group of brands, tailored to help overseas investors build their portfolio.
David Poston, CEO of Portugal Homes, talks to TBY about Portugal Homes’ credentials as a developer and provider of real estate services.
What makes Portugal Homes’ services stand out among real estate players in Portugal?
Our distinguishing feature in the market is that we offer a complete service. This is crucial for foreign investors who are driving the real estate market within Lisbon and make up 90% of all our clients. The needs and requirements of these buyers are different, and we noticed a market gap. We are focused on offering complementary services, and one of our strengths lies in our After Sales Department, an important sector that provides fiscal representation, property management, property inspection or snagging, along with leisure concierge services that go above and beyond for the client’s assurance and comfort, while we take care of their properties overseas. It is not just about finding the right investment and returns in Portugal for a foreign investor, but about making sure everything is taken care of throughout the purchasing process, and successfully doing so while they are away. For example, many Asian clients like to come and have their trip arranged for them, and our leisure concierge services are the perfect solution. Another example has to do with American clients, who are currently driving demand. They are used to having property snagging or inspection made. This means someone goes in and checks for any discrepancies before the property’s handed over, and if needed a full engineer’s report, which doesn’t exist in Portugal for 98% of transactions. Our after sales department covers all these areas, which is why we don’t call it property management but aftersales. We are not interested in doing rentals or making money from that aspect. We are trying to look after the clients and their entire experience when investing in Portugal. Cultural sensitivity is a huge differentiating factor for Portugal Homes. Understanding the difference between clients, how they invest, and what they expect from their investment is important for us. We have been in the market for 17 years, so the property side is easy for us. It ticks all those boxes that each nationality needs and is used to receiving.
What has been Portugal Homes’ experience in real estate construction?
We recently started investing in the project development and construction industry, this way we can please two investors in the same transaction if we can find a building at less than market value, renovate it, and still offer it at less than market value (to the end user). The main role of this company and our experience and knowledge is an investment. We show clients how to make returns. We decided to start our own construction company to better facilitate our investors, in a developing market developers can get greedy, and we wanted to ensure that our clients were getting the right deal and in the right areas. In just three years we have developed seven projects in the historical center of Lisbon and three across the Algarve, two of which were hotel resorts of more than 200 rooms. We are currently working on two more large projects in central Lisbon and Porto to release in early 2023. Offering a complete service to our clients, from Construction to after sales, allows us to benefit from a lot of repeat business as well as referrals, which currently make up 30% of all our deals. This gives us confidence to keep improving our clients’ experience and evolving as much as possible within the market.
What currently are the main business development objectives for Portugal Homes?
The goal is to move Portugal Homes further into the real estate realm, as at this time 80-85% of our clients are purely investment related; they are here for returns, to make money, and receive a yield from the property. We want the Portugal Homes brand to become a pure real estate company over the next three to seven years whilst allowing our investors to still make returns through our projects and investments with HP Invest. The idea is to appeal to everyone looking for a second home that they can enjoy and also live in. There are also people looking for retirement and many non-habitual resident (NHR) clients here. The Algarve is a holiday home destination. Lisbon is more of a tech area. Once again, being sensitive to cultural differences will allow us to match the right real estate property with the right cultural profile and the right buyer. It will take time to grow and it’s very important we don’t move into an area or industry and not know it back to front. We need to make sure that we bring the right people in to give the best advice and ensure we have the best properties.
What are the specific attributes of the jurisdiction that make Portugal the right place for real estate investment?
There are several factors that make Portugal attractive. Markets across Europe between 2002 to 2009 saw double-digit growth. The Algarve grew at an average of around 10% per year; however, Central Lisbon in the historical center only grew 1.2% from 2003 to 2008. The reason for that was rent control. The change in the law that started to remove rent control from the city center has started to take effect over the past 10 years, allowing buildings to be fully renovated and restored; this year it has now been fully abolished. Lisbon has been lagging behind the rest of Europe during the previous 15 years with the average price per square meter and rental income much lower than that of other major cities. Lisbon missed out when there was a boom in the early 2000s. We are starting to see the city slowly regenerate and redevelop itself. For example, seven years ago the average price on the best street was about six and a half thousand euros per square meter. It is now somewhere near 13. Compared to the rest of Europe, it is still relatively low. Meanwhile, some areas have gone up more than they should have and we will see a bit of correction over the next few years, especially in the current conjuncture. The priority for us as a business is to always understand the market and where clients can make money. Lisbon is still at the mid-point of its true potential.
To what do you attribute Portugal Homes’ international reach and what are your main business development objectives going forward?
We prioritize having high-quality interactions with clients and use technology in our favor. We generated more than EUR100 million in sales in central Lisbon, all remotely, in the first year of COVID-19. Over 50% of our business today is still done remotely, with a lot of our focus now going toward helping clients that do not want to travel. We have done tremendous work toward understanding each client’s home country, and which prerequisites are relevant and important in order to provide service excellence. Our team at Portugal Homes and Harland & Poston Group are devoted to adapting to our foreign clients. Meanwhile, we were the biggest Golden Visa company provider in Portugal during the pandemic, which was a huge step forward for our company. By having our own in-house digital marketing department, and choosing to not outsource, this provides strong leverage for Portugal Homes in the real estate industry. We intend to grow this department, and further develop new projects and brands within Harland & Poston Group. Currently, our clientele baseline is over 60 countries, and we market in around 40 countries. This means that we need to be present and understand the lay of the land everywhere we go. We are much stronger beyond Portugal than in it because many of our policies are based on international clients and bringing them in. And so, Portugal Homes stands out as one of the more international real estate advisory firms, with a huge online presence. It is important for us to have everybody in-house, so our team understands our values. We find that we learn much more and progress faster that way.
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