Commercial Real Estate in Portugal: Strategic Investment Opportunities

Portuguese Commercial Real Estate: Market Trends and Forecasts

As we’ve mentioned, commercial properties in Portugal are in high demand, with a growing number of investors looking for opportunities in the country. Below, we outline the key trends of 2024 and what we can expect in 2025, taking stock of the findings of CBRE’s latest Real Estate Market Outlook.

Retail and hotels to attract the most investment

In 2025, the main sector for investors is expected to be retail, closely followed by hotels. Investing in retail in Portugal offers strong potential given Portugal’s growing economy, booming tourism sector, and increasing consumer spending. Throughout the past decade, retail has formed a significant proportion of overall investments in Portugal, and therefore it is perhaps unsurprising that investing in retail is expected to be popular in 2025, while hotels have only increased in prominence since 2019, perhaps in line with increased tourism numbers.

Office rents in Lisbon to increase

The office sector in Lisbon underwent significant growth in 2024, with a 71 percent increase in take-up year-on-year. In 2025, the sector is projected to follow the same pattern, with office rents projected to continue increasing. Lisbon rents are approaching €30 per month as new office products are expected to reach the market, with it being possible to tap into the high demand for quality spaces. This will not just be for the Central Business District but across several parts of the city.

Portugal now a strategic hub in Europe

Portugal offers access to a highly qualified, diverse workforce that is highly proficient in English – the country ranks sixth in the English Proficiency Index, ahead of countries such as Denmark, Germany, and South Africa – and has increasingly become a south-after destination for multinational companies seeking to establish competence centers.

This has led to many multinational companies establishing competence centers in Portugal. Although the GDP per worker is lower than in many European countries, the significantly lower salaries make Portugal an attractive option, whereby investors have access to top talent while maximizing financial resources.

Industrial take-up at a record high, logistics remains a strong choice

The industrial and logistics sector experienced notable momentum in 2024, with strong take-up and rent increases even as new stock entered the market—resulting in vacancy levels still below the European average. To put this into perspective, industrial take-up reached its highest level on record since the establishment of the Portuguese Industrial Prime Index, due to favorable geopolitical conditions for nearshoring and Portugal’s solid economic foundations.

Hotels in Lisbon and Porto to have a record year

We’ve already touched upon the importance of hotels as a key foundation of commercial real estate. More tourists than ever before are visiting Lisbon and Porto. 29.7 million tourists visited Portugal last year (up to November), a 5.3 percent year-on-year increase. If you look specifically at Lisbon, the Portuguese capital saw a 3 percent increase in disembarked passengers in August 2024, compared with the previous year. Porto stands out for more pronounced growth in percentage terms, with 4 percent disembarked passengers in 2024, highlighting the growing attractiveness of Northen Portugal for business and tourism.

As we mentioned, tourism is projected to grow by 9 percent in 2025, with both Lisbon and Porto key destinations. This increased interest in Portugal goes hand in hand with foreign investments into the Portuguese hotel sector, with investments in this sector highly likely to provide a strong return on your investment.

Sustainability now taking center stage

Sustainability in commercial properties has now become the standard. While properties that meet compliance requirements may still attract higher prices, those that do not comply are valued much lower. In 2023, investors were willing to pay a notable premium for buildings that met sustainability standards. However, this trend has shifted, with premiums becoming less significant, indicating that sustainability is now expected rather than a distinguishing factor.