Portugal’s real estate sector is today experiencing boom times, as a surge in tourists and foreign investors usher in a renaissance for the country’s hitherto derelict urban areas. Amongst the companies riding this growth wave, JPS Group has left its mark via an integrated business model and agile approach. João Sousa, CEO at JPS Group, speaks of how the real estate sector and tourism are pushing the economy forward, what needs to be done to sustain growth and how JPS Group is positioning itself for the future.
How does JPS Group position itself within the real estate market?We operate in a slightly different way than the rest of real estate developers. As a group, JPS has all the teams needed to develop a real estate project within the company. We have our team of architects, lawyers, engineers, marketers and a commercial department. We manage to grab a project and close it completely all within the company. What do we get out of it? Time. And we gain solidity in knowing what our customers want because all departments communicate quickly with each other. That’s why I say we’re different.
What has changed in the Portuguese market since the crisis?
In recent years, Portugal has begun to arouse the interest of foreign investors, which has translated to a lot of liquidity in terms of investment, and is starting to produce growth in all sectors. The country is recovering considerably on account of the tourism and the real estate sectors. Until the crisis, we did not know how to sell ourselves abroad, but today Portugal is able to position itself competitively in relation to Northern European markets, leveraging its favourable weather conditions, its food and its relatively low cost of living, which starts to attract not only upper-class Europeans but also the middle class. Today, all sectors affected by the financial crisis, especially those who were more exposed to risk, like banking or real estate, begin to recover very solidly.
Is the Portuguese economy too dependent on tourism and real estate?
Those are two great economic engines, but I do not believe that they have created a problematic within the whole economic spectrum. For any country to thrive, it has to grab two or three sectors and encourage and energize these sectors in order to drive the economy forward. It has to leverage its strengths, and not try to compete in less developed sectors that offer no strategic advantages compared to other countries. This is not a problem as long as the central engine sectors are promoted and developed with great professionalism and skill. Portugal today is not only an attraction for tourism and real estate. Today, Portugal is attracting companies like Google, which is now make a considerable investment in the country and is just one among several global companies.
Is the technology sector a potential new economic engine for the country?
I think it can be. The technology sector in particular has recently attracted a lot of investment from foreign companies, which through events such as the Web Summit and new technological centres, such as the one being created in Marvila, have discovered Portugal. The sector is already attracting a considerable amount of people, which in turn have an impact on the tourism and real estate sector. I really think these two industries are important economic movers, but they are attracting more than that. We are seeing more and more people that come to stay in Portugal, live and establish roots, which means they will have an impact on every economic sector.
Regarding the real estate sector, what can be done to further promote growth?
There are a few different ways in which the business environment could be improved. I understand that a proposal is already on the table to extend tax benefits for real estate development from just the refurbishment of derelict old buildings to new real estate developments. However, changes in tax law always present a challenge. More than looking at reducing taxes, it is necessary for bureaucracy in Portugal to be more agile, to give more speed to the processes. Sometimes just reducing taxes is not enough, making things work faster amounts to much more than just cutting tax. My business might see great demand today, but if I do not have a licensing system that can keep up with my demand, it will complicate my investment. It is important to create incentives, but it is also important to adjust the state to the sector’s needs and give security and support to all processes.