The combination of keenly priced prime real estate and flexible immigration policies is attracting waves of seasoned investors to Lisbon.

With prime property rents dropping in London and capital growth stuttering in Paris, foreign investors are looking elsewhere in Europe for their prime property nest egg. And it seems that those willing to look as far as Europe’s westernmost capital are finding the property holy grail of a bottoming out market and solid rental yields.

Prices of both new and existing property in Portugal increased by 2.9% in the second quarter of 2015, breaking a three quarter run of zero growth or drops. Yet despite this rise prime property is still a fraction of the price of its neighbouring European counterparts.

Nicholas Leach, a partner at Athena Advisors, a company selling prime Lisbon apartments to Brazilian and European investors says that it is this huge price disparity that is the biggest draw for investors. “In London, prime real estate can reach up to €30,000 per square metre and in Paris it’s the same. Properties in Lisbon with equivalent locations to the Champs-Élysées and Bond Street can currently be bought for under €8,000 per square metre. It’s essentially like being able to buy in Paris 35 years ago.”

Of course Lisbon is very different from Paris or London in terms of culture and style, but this seems to be part of its appeal and for those buying purely as an investment, it’s only really the numbers that matter. “For investors with a ten to fifteen year plan it’s a simple strategy,” adds Leach. “Either use it as a pied-a-terre or rent it out. Well located real estate in Lisbon is positioned for growth and if you look at prime real estate around the world, rental occupancy is never an issue as long as you have the location and sufficient quality.”

For rentals on the whole, Portugal performs well by Europeans standards. Figures from show that Lisbon has the second highest rental yields of all European capitals with returns well above 5.0%, yet housing costs are low, with the city back in an affordable 12th position.

But it’s not just the mechanics of bricks and mortar that’s attracting well-heeled investors to Lisbon. Portugal’s residency programme, known as the Golden Visa programme, is another string to its bow. Since it’s launch in October 2012 to the end of September this year Golden Visa’s €1.52 billion of investing to the country. And whilst there is more than one way of investing to obtain a golden visa, the vast majority, over 90% (€1.37 billion), have gone to those investing €500,000 or more in real estate, with the remainder (€146 million) down to capital transfers of €1 million.

“At first Golden Visas give holders the ability to pass freely through Europe’s Schengen countries, but it’s the possibility for owners to apply for Portuguese citizenship after six years which underpins the appetite for the programme,” adds Leach.

Portugal isn’t the only country trying to lure foreign investors to its real estate market using residency permits as a sweetener. Spain and Greece both have similar programmes which began a little later, no doubt as their own respective governments saw potential investment heading to Portugal.

But it’s Portugal’s programme though that seems to be the pick of the bunch so far. To the end of September 2015 over 2,500 Golden Visas were granted, whilst in Spain only 530 visa were granted between its launch in September 2013 and March 2015.

Some Golden Visa investors are looking south to the Algarve, but the majority are looking towards specific districts in Lisbon. “Prime redevelopment projects on Lisbon’s biggest avenues are selling very quick right now. Avenida da Liberdade is probably the most sought after address in the city but regeneration areas like Mouraria are also getting a lot of attention, probably as the scope for uplift is even higher.”

Liberdade 71, complete with a unique roof top terrace and pool
Liberdade 71, complete with a unique roof top terrace and pool

On Avenida da Liberdade, the central thoroughfare Lisbon a two bedroom property at Liberdade 71 is going for €900,000 (€7,021 per square metre). The other 16 properties at this development also have access to a unique roof top terrace with pool and 24/7 concierge (Athena Advisors,, +44(0) 20 7471 4500).

Elsewhere on the sloping streets of Mouraria, an old district still showing Moorish heritage, a huge regeneration programme is underway. Period residential buildings and commercial spaces are being renovated to create a new ‘community’. Here the latest phase has just been launched with it’s own private pool and gardens. Called Terracos das Olarias (Athena Advisors) the one to four bedroom apartments are priced from €255,000 with a two bedroom property going for €435,000 (€4,484 per square metre).

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