Rich Kenyans are looking to buy second and third homes in Portugal, a shift from a previous rush to the UK and Dubai, as they seek to diversify their wealth and buy houses which promise higher returns while allowing them to get citizenship.
Francisco Salgueiro, an investment and immigration lawyer who is in Kenya currently says Portugal's property values have risen by 87 percent in the last five years, promising good returns for homebuyers.
Investing in real estate is also an easier way for Kenyans to acquire a second citizenship in Portugal where they will have access to better education for their children, technology and standards of living.
Lisbon has also become a must-visit holiday destination for wealthy Kenyans and having a home there has its benefits.
''People are looking for investment alternatives, especially those coming from countries where currency devaluation is a big issue, the possibility of diversifying investment portfolios in more stable areas is very attractive'," Mr Salgueiro tells BusinessDaily.
In the past, wealthy Kenyans have sought second homes in St Kitts and Nevis, a two-island county in North America. Reason? Its education system is better, it is affordable to get citizenship because the investment requirement is fairer than in other countries and it is crypto-friendly hence attractive to technology investors and entrepreneurs.
St Kitts and Nevis is home to some of the top most sought-after medical institutions and enrolment in high school is 91 percent, meaning that if a Kenyan passes security checks, invests a minimum of Sh30.6 million to Sh45.9 million ($200,000 to $300,000) in real estate, they can pass their citizenship to their children who would benefit from upper-class education and healthcare.
Portugal, which is now courting Africans, is slightly pricier.
"Many investors and entrepreneurs may have the financial capacity, but the visa process is a deal breaker," Mr Salgueiro says.
"One needs Sh46.6 million (280,000 euros) in investment to get a residence permit, whether you live in Portugal or not. The residency permit can eventually lead to citizenship in five years. You do not have to be a Portuguese citizen or live there to invest in property," he adds.
Previously, the top migrant homebuyers in Portugal were the Chinese but were later overtaken by the Americans. In Africa, more South Africans are investing in real estate in Portugal than any other nationalities.
So what are the benefits for Kenyan investors?
Trushar Khetia, the founder and CEO of Casa Capital, a private investment firm which provides opportunities for those seeking to be Kenyan-Portuguese, says with the residency permit, one gets every single benefit of being a citizen, except the ability to vote.
Kenyan-Portuguese have the freedom to travel, work and live in any country in Europe and can pass on citizenship from generation to generation because there is no tax on inheriting property.
"Most people are now looking to own property and transfer their citizenship to Portugal because of the favourable benefits and affordable living, especially by European standards," he says.
One has an option of buying commercial buildings, apartments or hotels.
Mr Salgueiro says that, on average, an investor can recoup their investment in rental apartments after one year with a return on investment of at least five percent.
For those looking for a second or third home, a two-bedroom apartment in Lisbon, for example, sells for Sh83.3 million and earns about Sh2 million a year when rented out on a short-term basis.
On the other hand, a three-bedroom apartment will cost them only Sh109 million.
"It earns you a double-digit property appreciation, to be precise, 87 percent in five years. Rental yields have done so well that they allow very smart investors to diversify and at the same time earn appreciation in rental income. For others, we encourage also to build a property portfolio by buying and selling,’’ said Mr Khetia.
Demand for investors
Investments overseas have become attractive as Nairobi suburbs such as Runda and Spring Valley cut asking prices by double-digit rates amid tightening liquidity.
Mr Khetia, who is also an investor, says Portugal's cost of living is also low compared to neighbouring countries.
''Since 2019, foreign buyers have had a significant impact on the market, acquiring 40,700 homes and contributing to an investment of €12 billion. Their contribution, however, represents only six percent of the sales transactions and 11 percent of the sales volume,'' Mr Khetia tells Business Daily.
In addition, Portugal has the fifth most powerful passport in the world in 2023 which gives access to 187 destinations visa-free. The weather is also good, not characterised by the extreme harshness in winter.
''Tourism is booming, with 80 percent of flights being international. About 23 percent more people came as visitors. This tells you that there are still more people willing to invest,'' adds Mr Khetia.