INVESTOR BENEFITS

Portugal Development Co focuses on the types of properties and neighborhoods that most developers avoid. We specialise in uninhabited and historically significant buildings in older city centers, where thoughtful design, planning expertise, and patience are required to unlock real value. This work sits at the intersection of heritage, regeneration, and modern living, and it demands a different skill set than conventional development.

Our approach stands out in several ways:

• A mission driven strategy that aligns investor outcomes with the revitalisation of Portugal’s historic neighborhoods.

• A focus on complexity rather than scale, allowing us to pursue projects with strong latent value that are overlooked by volume builders.

• Hands on oversight of design, planning, and renovation, combined with careful sequencing and disciplined execution.

• A preferred return structure that places investor outcomes first and aligns incentives throughout the project.

• Strong local insight into ARU designated districts, regulatory pathways, and the specific dynamics of older Portuguese neighborhoods.

This combination allows us to deliver projects that are financially compelling, architecturally respectful, and supportive of the communities where we work.

We source projects through a combination of direct owner relationships, local agent networks, and targeted research into historic city center areas. Many opportunities come from long uninhabited buildings or overlooked properties that require a developer with design capability, patience, and the ability to close with confidence.

Each potential project is evaluated for its capacity to deliver meaningful value creation. Our assessment focuses on:

• Architectural character and structural potential

• Planning and licensing feasibility, including expandability

• Acquisition cost per square meter compared to expected net value once additional usable area is created

• Construction complexity, cost efficiency, and expected resale strength

We prioritise properties where thoughtful design and increased usability create a clear spread between total input costs and projected resale value.

We focus on historic, uninhabited properties and architecturally significant buildings located in walkable city center neighborhoods. These assets usually have strong character, underused or inefficient layouts, and clear potential for value creation through thoughtful design and renovation. Each project is selected for its ability to deliver meaningful improvement in usability, space, and resale value within areas that attract long term buyer demand.

We create value by acquiring underused historic properties and transforming them into high quality homes through thoughtful design, disciplined execution, and a clear focus on buyer demand. Each project is selected because it offers a meaningful gap between total input cost and expected resale value.

Our value creation approach includes:

• Identifying properties with strong architectural potential and room for improvement

• Unlocking additional usable space through design, engineering, and layout optimisation

• Managing renovation budgets tightly and maintaining close oversight of contractors

• Positioning the finished homes for strong resale within walkable, high demand neighborhoods

This combination of strategic acquisition, design led development, and operational discipline supports attractive outcomes for investors and lasting value for the communities we work in.

Each project is held inside a dedicated project company in Portugal. Investors provide capital through a bilingual loan agreement that defines their preferred economic position. The structure is designed so that investor outcomes are prioritised ahead of any developer participation.

The investment model includes:

• A preferred interest rate on invested capital

• A defined share of the project’s upside linked to final sale outcomes

• A clear repayment order that places investors ahead of the developer

This approach aligns incentives, provides transparency, and ensures that investors benefit first from the value created through each project.

Investors earn a combination of preferred interest and a defined share of the project’s upside. The exact terms are outlined in the loan agreement for each phase or project. While the specific rates and profit share may vary between phases, the structure always places investor returns ahead of any developer participation.

The return model is designed so that:

• Investors receive a preferred interest rate on their capital

• Investors participate in a share of the project’s profit once properties are sold

• Developer compensation is only considered after investors receive their full preferred return

This ensures alignment and prioritises investor outcomes in every project.

Investors hold a preferred economic position within each project company. Their returns are prioritised ahead of any developer participation. This means investors receive their preferred interest and profit share first, and developer compensation is only considered once investor outcomes have been met.

This structure creates clear alignment of incentives. If a project takes longer due to licensing, heritage reviews, or construction timelines, the preferred interest continues to accrue for investors. This creates a natural pressure on the developer to manage timelines responsibly, since delays increase investor returns before the developer earns anything. The result is a model where both sides remain focused on disciplined planning, thoughtful decision making, and delivering projects that perform well for investors.

Project timelines vary by phase, but most follow a three to five year cycle. This accounts for acquisition, design, licensing, construction, sales, and final distribution. Phase II will be planned on a five year horizon to coordinate multiple properties within a single structure. Each project sets out its expected timeline in the investment overview and loan agreement.

Investor returns are paid at the end of each phase once the project company has completed its work, sold the finished homes, and final accounts have been prepared. Distributions are made during the wind up of the project company, typically within ninety days of the final sale and completion of closing procedures. The exact timeline is outlined in each phase agreement so investors know what to expect.

The minimum investment per phase is fifty thousand euros. We set this level to keep administration efficient and to match the scale of our developments. For existing investors we can offer more flexibility and work together to manage allocations across phases. Larger commitments can be placed into a single project or distributed across multiple phases depending on availability.

Investors sign a bilingual loan agreement with the project company. It outlines the investment amount, preferred return structure, profit share, repayment order, and each party’s core responsibilities. The agreement is designed to be clear, understandable, and practical to execute, giving investors a solid and transparent foundation for their participation in each phase.

We provide structured updates throughout each phase. Investors receive quarterly updates at minimum, along with additional communication whenever a major milestone is reached or when plans materially change. Our goal is to keep investors informed in a clear and predictable way without adding unnecessary complexity or administration.

At completion, you receive a final summary covering project performance and the distribution process.

Portugal has tax treaties with many countries, and the final tax treatment often depends on the investor’s own jurisdiction. Returns may also be subject to Portuguese withholding tax depending on the nature of the payment and the investor’s residency status.

When withholding tax applies, the project company deducts the required amount and transfers the net payment to the investor. You will also receive documentation showing the gross value, the tax withheld, and the final amount paid.

Because cross-border taxation is personal and treaty dependent, we encourage investors to consult their own tax representative. Our role is to handle any required Portuguese withholding and to provide all supporting documentation investors need for their individual filings.

Working with historic properties in centuries old neighborhoods often requires patience. Approvals can take longer due to planning reviews, heritage considerations, or archaeological assessments. These factors are a normal part of regenerating older urban areas and are included in our project planning.

If timelines extend or the market slows, we adjust the schedule rather than force a sale or compromise quality. Our approach includes:

• Flexibility to extend development or sales periods when this strengthens results

• Sequencing work to protect budgets and maintain project standards

• Holding or renting completed units if market timing is not optimal

Our preferred interest rate first structure is designed to protect investors in the event of delays. Because investor returns are prioritised ahead of developer participation, incentives remain aligned even when timelines shift.

Yes. We welcome investors who want to see our work on the ground. Property visits and in person meetings can be arranged by appointment so we can coordinate schedules and access. These visits offer a direct look at the neighborhoods we focus on and the approach we take to restoring historic properties.

Working with historic, uninhabited properties carries specific risks, including licensing delays, heritage or archaeological requirements, construction complexity, and changes in market conditions. These factors are normal in older city centers and are built into our planning and sequencing.

We mitigate these risks through:

• Conservative assumptions on timelines, construction budgets, and resale values

• Early due diligence on licensing pathways, heritage constraints, and structural conditions

• Hands on oversight of architects, engineers, and contractors

• Flexible project sequencing that allows us to adjust timelines without compromising quality

• A preferred investor structure that prioritises investor outcomes even if timelines extend

Our goal is not to eliminate all risk, but to manage it responsibly and transparently so that each project is positioned for strong long term results.

We take a hands on and disciplined approach to managing every stage of the development process. Cost control begins before acquisition and continues through design, licensing, construction, and final delivery.

Our approach includes:

• Detailed scoping and budgeting before work begins

• Working with trusted architects, engineers, and contractors who understand historic properties

• Clear sequencing of tasks to avoid rework and unnecessary costs

• Regular site visits and active oversight of progress

• Transparent review of invoices, variations, and timelines

This disciplined approach helps protect budgets, maintain quality, and ensure that each project is delivered with investor outcomes in mind.

Portugal’s historic city centers offer a rare combination of strong demand, undervalued properties, and meaningful public support. Many buildings in these areas have been uninhabited for years and hold significant potential for value creation through thoughtful restoration.

The government actively encourages this type of redevelopment through Urban Rehabilitation Areas, known in Portuguese as ARU zones. These are designated districts where the state provides tax benefits, reduced VAT on construction, faster permitting pathways, and other incentives to promote the renewal of older neighborhoods.

By focusing on these areas, we are able to:

• Restore important buildings with architectural and cultural value

• Benefit from public incentives that strengthen project economics

• Deliver high quality homes in walkable, desirable neighborhoods where supply is limited and demand is consistent

This alignment between market fundamentals and government policy makes historic city centers a compelling focus for both mission driven outcomes and strong investment performance.