• CG Capital Europe: Portuguese Real Estate Market in 2022

    May, 2023

FY22 was a turning point for real estate investment in Portugal, reaching c. €3.0 billion. This represents a growth of c. +50% vs FY21. During last year, there was a considerable inflow of foreign capital, representing 78% of the overall investment volume.

The office market transacted c. 270,000 sq.m. inLisbon, setting a historical record. Throughout the year, the Portuguese office market achieved an investment volume of c. €700 million. The high demand in this sector led prime rents to increase to €26/sq.m./month while prime yields stood at 4%.

The demand for retail space rose by 6% fuelled by tourism, together with an increase in private consumption. Total investment volume accounted for c. €360 million over the last year. Whilst prime rents increased to €127.5/sq.m./month, prime yields stood at 4.50% in the high street.

The logistics market recorded more than 600,000 sq.m. of take-up, representing an increase of c. 21%. Investment volume in this sector accounted for an all-time record of c. €620 million. Regarding prime rents and yields, these reached to c. €4.5/sq.m./month and 5.50%, respectively.

The hospitality sector has also witnessed a record in investment volume with more than €900 million transacted. After compressing at the beginning of the year, and decompressing towards the end of FY22, prime yields were finally set at 6.00%.

The living market remains a strong sector, high demand and falling supply have kept pressure on prices, which have risen both in Lisbon and Porto, standing at €4,220/sq.m. and €3,120/sq.m., respectively.