2021 is expected to be a dynamic year for the real estate sector in Portugal, bringing a gradual recovery to the retail sector and stability to the residential sector.

During 2020, the retail sector has been severely affected by Covid-19 pandemic and mobility restrictions, experiencing a decrease in footfall of 35%. The least affected retail segment was retail parks, due to their larger size and open format, aiding to comply with social distancing. Interest for retail parks was illustrated by the development of 2 new projects during 2020 and several more scheduled for 2021. On the contrary, high street retail will experience a slower recovery, until international tourism is fully re-established.

The residential sector is set to perform unevenly in 2021, with segments that rely on foreign investment (coastal market and redevelopments) expected to perform worse than mid and upper-tier products aimed at domestic investors, which will exhibit better performance due to the shortage of supply. BTR, despite being a growing trend in Europe and in the neighbouring Spain, is still gaining traction slowly in Portugal.

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