The Portuguese property sector continues to show resilience, driven by growth in residential demand and increased investment in commercial assets. However, the success of any property project depends on variables that go beyond the design of the space or the choice of materials.
Architectural consultancy has become essential for investors looking to maximise the profitability of their developments. A project only reaches its true potential when its design combines financial efficiency, constructive feasibility and regulatory compliance.
According to the latest INE figures, property prices grew by an average of 8.5% in 2024, with a marked appreciation in secondary markets. At the same time, construction costs have risen by 6.7% in the last year, forcing investors to adopt cost optimisation and risk mitigation strategies.
In this article, we explore the three fundamental pillars for a successful property investment: financial viability, licensing management and efficient construction planning.
1. Financial Viability in Architectural Consultancy: From Cost Analysis to Long-Term Profitability
The financial viability of a property project depends on a structured approach, taking into account not only the initial acquisition and construction costs, but also the cost of maintaining the asset, the return on investment (ROI) cycle and resilience in the face of market fluctuations.
Key Profitability Indicators
✔ Gross Yield Index: Measures the property's gross annual yield in relation to its total purchase cost. In Lisbon and Porto, this index varies between 4.5% and 6.8%, depending on the location and type of property.
✔ Net Yield: After deducting operating costs, the net yield is on average between 3% and 5%.
✔ Rate of Return (IRR): Projects with an IRR of more than 8 per cent are considered financially sustainable in the long term, depending on the type of asset and the financing structure.
Factors impacting viability
✔ Total Cost of Ownership (TCO) analysis: Includes tax costs (IMT, IMI), condominium fees and energy costs.
✔ Sensitivity to inflation and interest rate fluctuations: The increase in interest rates in 2024 has impacted financing costs, making it essential to choose more efficient capital structures, such as hybrid debt and equity instruments.
✔ Operational efficiency and energy costs: Properties with A+ or B energy certification have an average valuation 5% higher than properties without energy efficiency measures.
2. Construction Strategies and Operational Efficiency: The New Approach to Profitability
With construction costs set to rise by an average of 6.7% by 2024, driven by rising material prices and a shortage of skilled labour, it is essential to adopt smart construction and resource optimisation strategies.
Solutions to optimise costs and deadlines
✔ Modular and prefabricated construction: Reduction of up to 30 per cent in construction time and lower costs by around 15 per cent compared to traditional methods.
✔ Use of low environmental impact materials: Recyclable materials and sustainable energy solutions guarantee lower operating costs and greater asset value.
✔ Integration of Building Information Modelling (BIM): Studies indicate that the use of intelligent digital models can reduce waste on site by up to 20% and optimise coordination between project teams.
By Piedade Duarte Oliveira
3. Licensing and Building Viability: How to Reduce Delays and Costs
The average time taken to obtain planning permission in Portugal varies between 9 and 24 months, depending on the complexity of the project and the region. The lack of a structured licensing strategy can result in cost overruns of more than 15 per cent of the planned budget and significant delays in the execution of the development.
Strategies for optimising the licensing process
✔ Urban due diligence before acquisition: Identifying environmental, property and regulatory restrictions avoids unforeseen costs.
✔ Risk modelling and proactive management of the licensing process: Prior presentations to regulatory bodies and the involvement of specialist consultants speed up project approval.
✔ Adaptation to the Municipal Master Plan (PDM): Projects that already comply with legal requirements from the outset are 40 per cent less likely to face revisions and requests for alterations.
Want to maximise the efficiency of your construction? MBM Company offers consultancy solutions to optimise costs and guarantee profitability.
The success of a property project doesn't just depend on a good location or an innovative concept. The real differentiator for investors lies in the ability to plan strategically, integrating financial analysis, legal compliance and construction efficiency.
Specialised consultancy makes it possible to anticipate risks, optimise costs and ensure that the investment responds to market needs while maintaining solid and predictable profitability.
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