Porto, the second-largest city in Portugal behind Lisbon, is gaining speed as a top destination for foreign investment. Business and trade are booming, with many global companies choosing to set up a base in the city.
Meanwhile, global visitors are favouring Porto, enticed by its captivating historic centre and the wider Douro wine region. A number are even deciding to call the city home.
We take a look at some of the main factors driving foreign investment in Porto, Portugal.
An International Hub For Business & Trade
With a GDP of €79.1 billion, Porto and NW Portugal is central to the Portuguese economy. Staggeringly, the region supplies almost half (47%) of Portuguese exports and is home to over 40% of the country’s total workforce.
The city has managed to establish itself as an international hub for business, largely thanks to its connectivity. Francisco Sá Carneiro Airport, also known as Porto International Airport, is less than 20 minutes from the city centre. Additionally, the Port of Leixões, located just outside of Porto, is the busiest port in the country based on the number of ships handled per year.
As one of the Iberian Peninsula’s largest commercial centres, with a strong employment market, Porto is attracting foreign businesses in huge swathes. More than 2,250 foreign-owned companies have a base in the Porto metro area, and just last year, investment from foreign businesses totalled a record-breaking 1.1 billion euros.
The city is home to major corporations, such as Natixis, Euronext, BNP Paribas, FedEx, and Maersk. It is one of Europe’s leading startup hubs, with 550+ startups and 10+ unicorns including Revolut and Farfetch.
Foreign direct investors are favouring one sector in particular. Travel, Personal & Leisure received the most investment—a total of €788 million over the last five years.
A Growing Expat Population
It isn’t just businesses landing on Porto as the place to be. The city’s foreign population has more than doubled over the last five years, with a 140% increase since 2016. Today, multicultural Porto is home to 58,000 foreign residents from 156 communities.
Expats are drawn to the city by its pleasant weather, beautiful architecture, and truly enchanting culture. Moreover, with copious opportunities for work and business, Porto is attracting professionals and entrepreneurs from across the globe.
The overall cost of living for an expat is around 19% lower than in Lisbon, according to Nomad List. This, combined with all that the city has to offer, makes Porto a strong rival to the capital.
Property Investment in Porto
Foreign investors looking to buy property abroad are also favouring Porto.
As the city gains renown as a top city break destination, tourist numbers are rising quickly. Only last year, Porto was named the World’s Leading City Destination by the prestigious World Travel Awards. With a growing number of international visitors, short-term lets in the city present an attractive opportunity.
On the other hand, demand for long-term rentals is also strong thanks to the city’s booming employment market and its large pool of professional tenants. According to Idealista, rent prices increased by a startling 36.6% in the year to January.
Property prices are also rising steadily, with an 8.4% annual increase in prices per sqm at the beginning of the year.
A strong and growing demand for homes makes Porto one of the best places to invest in the country. As well as high yields and excellent long-term returns, Porto offers much lower entry prices than Portugal’s capital, Lisbon. Foreign investors are eager to take advantage of this opportunity whilst prices are still affordable—and who can blame them?
Contact us today to discover our available properties in Porto.
