Violas Ferreira is a real estate investment and development family office, originally from Northern Portugal with completed projects including Porto Office Park.
Violas Ferreira has a very rich history, can you please illustrate for us in broad strokes the current footprint of the company?
Violas Ferreira is a family office started by my grandfather in the 1940's, so we're almost 80 years of age. In 2005 we split the group into two branches. Ours became a real estate and financial assets holding. I have been consolidating our footprint for 17 years now and if in 2005 we were registering a recurrent revenue of EUR 1,5 million, in 2021 this increased to about EUR 9,5 million.
At this moment, our portfolio is shared between three sectors: offices that take up 75%, retail that amounts to 5% and residential that gets the remainder 20%. Offices are our core business, so we've made it our mission to provide our tenants not only beautiful buildings, but also premium services similar to those found in New York or London.
What are the elements that attracted you to Porto and why is it a good place for office development?
The area of Porto where we chose to develop our prized office project (Porto Office Park) is in the vicinity of five universities, so it's fairly easy to get in touch with the pool of graduate students that floods the market each year.
As a whole, Portugal is a favored destination for offices because it has great political and economic stability, an educated workforce - fluent in several languages and a nice proximity to the United States, South America and Africa. Our international tenants also talk about how the quality of life found in Portugal helps them easily recruit new employees. Having all these elements put together, we decided to raise things up a notch and include high class amenities into our POP units: padel courts, gyms, meeting rooms, cafeterias and restaurants.
Seeing how much of the investment made in Portugal is actually foreign, what is the profile of your tenants?
It's true that there is a lot of demand coming from foreign companies and we've actually experienced this through our portfolio that is made up of a domestic company (law firm), four multinationals based in Portugal and a myriad of international brands coming from a mix of industries: consultancy, financial, services, IT, etc. They are primarily interested in premium offices.
Since we inaugurated POP (Porto Office Park) a lot of demand came in, so much that if we had some extra 10,000 or 20,000 square meters they would have been immediately rented out. All this hunger is due to the well-known demand versus offer imbalance that characterizes Portugal at this point in time.
The pandemic affected the various sectors in different ways, offices remaining surprisingly resilient - how did you experience the impact?
In the first three months of the pandemic, the employees were content with their impromptu vacation but starting with the end of 2020 and until now, they have been begging to come back to working in an actual office space. We thus took over massive projects in our pipeline and are actually curious how the market will be able to digest them. For example, we're having some 60,000 square meters of development in the works for Farfetch.
Besides offices, we are also developing an interesting residential project, similar to the famous Greenstone. It is called Pharmacia because is a refurbishment of the Former University of Pharmaceutics in Baixa (downtown Porto, dating back from 1905).
For a company like yours, what are the most challenging aspects of driving a business in Portugal?
Since all the regulations and taxes are under constant change, it's difficult to navigate this unpredictable context. Hopefully, the new elections will bring more stability. If the genie in bottle could grant me one wish that would be to change our collective mentality towards more liberal economics. A more entrepreneurial spirit should be promoted amongst young people, sustaining them through a friendlier tax environment being of utmost importance. It's true that service companies always find good candidates in Portugal because people seem to be drawn to them, but this lack of interest towards setting up their own ventures could prove to be actually detrimental to the economy, in the long run.
What are the main ambitions you wish to achieve in the next two to three years?
We always aim to work on projects that reflect our values, as such developing a new POP project in other Portuguese cities, or even in other countries with the same business and social environment, would be an amazing achievement. We have ambitious plans and in the following three years we expect to have a development revenue of EUR 12 million per year.
What would be a final message that you want to share about the real estate market in Portugal?
I believe there's one word that perfectly summarizes our whole culture: friendliness. This trait can be found in day-to-day life but also in business, which is simply amazing for a new investor that wants to initiate a venture in Portugal.
