Lisbon's azure skies are dotted with forests of cranes as scores of construction workers give Portugal's capital a shiny and new, if pricey, veneer.
For years the local construction industry lay in the doldrums - but today the city is a hive of activity, a boon for those involved in its overhaul.
"Eight years ago, with my colleague, we were going from door to door offering our services," recalls Roman Kurtysh, a stonemason from Ukraine who specialises in facade revamps and working at height.
"I still don't know how we survived," grins Mr Kurtysh, a stocky man in his 40s with a thinning beard who left his homeland for Portugal almost two decades ago.
He tried his hand at various jobs before setting up Rkesa, an urban renewal firm, with compatriot Oleksandr Shulyak in 2009.
"In those days, at the end of the month we would draw a salary of €53 (Dh233) each," says Mr Kurtysh. "We were ready to throw in the towel."
Early 2014 brought a turning point. Three years after receiving an EU bailout loan package of €78 billion Portugal began to drag itself out of a deep-seated economic crisis.
The two Ukrainians took full advantage.
"From that point on, our order books began filling up," says Mr Shulyak, who leads the firm's team of "steel monkeys" - high-rise workers who scale 16 Rkesa sites in the capital alone.
Rkesa is just one example of the surge in construction activity with planning permissions and projects soaring after years of urban decline.
By mid-2017, the sector employed 310,000 people, 8 per cent more than the 287,000 of one year earlier, according to Portugal's National Statistical Institute (INE).
Sector production rose 5.9 per cent in 2017, in contrast with a 52 per cent slump in the 19 years that went before, estimates the Portuguese construction industry federation Fepicop.
"In the past five years, restoration has been a key driver, accounting for more than 80 per cent" of construction activity, notes Jose Velez of real estate consultants Prime Yield.
Before 2013, in Lisbon "one building in three was empty, decrepit or in an advanced state of disrepair", says Luis Mendes, a researcher at the University of Lisbon's Institute of Geography and Spatial Planning.
That is no longer the case, with many of Lisbon's typical flaking and weatherbeaten ochre facades masked by swathes of scaffolding behind which brand new buildings are emerging.
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A batch of regulatory measures has enabled the building revamp to move on apace, says Mr Mendes, singling out the lifting of a decades-long freeze on rents as well as the introduction of "golden visas" for non-EU nationals to take up residency if they spent at least €500,000 on property.
Another measure has been the recent introduction of a preferential tax regime for "non-habitual residents" regularly spending time in Portugal or owning real estate there.
Beyond that, the government has introduced a raft of fiscal measures including a five-year exemption from local taxes for purchasers of an old building earmarked for renovation as well as a reduced value added tax rate of 6 per cent.
"Today, the country is less dependent on these programmes. It has gained repute and Lisbon is trendy," says Luis Lima, president of Portugal's association of real estate professionals and agents Apemip.
Furthermore, "the [construction] sector is benefiting from a highly favourable backdrop," says Rui Campos, head of the Association of Civil Construction Industries and Public Works.
Other positive factors are last year's record 20 million tourists, coupled with economic growth of 2.7 per cent and low interest rates.
"There remains much to do in the renovation market," says Mr Campos.
"We are talking around one million homes requiring repairs in Portugal ... for a market valued at an estimated €24bn."
The market is primarily concentrated on Lisbon and second city Porto, where prices have been spiralling, forcing less well-off residents to move out of central districts.
"There is a market for this rehabilitation, and we must make the most of it," says Rafael Ascenso, who heads the Porta da Frente real estate brokerage specialising in luxury homes.
Campo das Cebolas was traditionally a popular, once rather decrepit district low on appeal with a slew of crumbling buildings and off the tourist beat despite being near the centre of town.
Today, it is enjoying a new lease of life, as witnessed by a renovated apartment with a view over the River Tagus which helps it to command a price tag of €900,000.
"This investor allure has allowed the creation of a pleasant city as well as the revival of districts which had been abandoned. It's a one-off opportunity," Mr Ascenso concludes.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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