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Portugal commercial real estate investment trends


Portugal commercial real estate investment trends - portugal news
Portugal commercial real estate investment trends - Portugal Business News





Portugal real estate investment news – What are the investment trends for commercial real estate in Portugal? The latest investment report on the Portuguese commercial real estate market published by CBRE shows the Key Performance Indicators for Q4, 2023 for the retail, hotel, and logistics subsectors.

 

 

What are the investment trends for commercial real estate in Portugal?

 

Investments in commercial real estate in Portugal are following an upward trend for its main subsectors and the last quarter of 2023 was the strongest, with a total investment volume of 1.6 billion euros, according to a report by CBRE.

 

However, despite having registered the largest investment volume in a quarter, Q4 2023 still showed a YoY decrease of -60% when compared to Q3. The slowdown of the investment activity in Portugal has not been driven by the operational performance of the assets, which is quite positive across all economic sectors, but it is mostly motivated by an overly cautious investor approach.   

 

The investment trends in Portugal’s main commercial real estate subsectors for 2024 show that the total investment volume will increase a little above 15%, going from 1.6 billion euros in 2023 to 1.8 billion euros in 2024.

 

 

What are the highest-performing commercial real estate subsectors in Portugal?


1 – Portugal's hotel real estate sector is the top performer

 

While Portugal’s hotel and retail real estate sectors boosted the capital inflow for commercial real estate in 2023, the hotel property sector was the star of the year, accounting for 40% of the total investment to reach 605 million euros. The largest investment in the hotel real estate sector in 2023 was for a portfolio of six hotels.

 

The trends in Portugal’s hotel real estate sector in 2024 show an expected investment volume that is robust, especially considering the significant transaction pipeline of projects, according to a report by CBRE.    

 

 

2 – Portugal’s retail real estate sector receives major investments


Portugal’s retail real estate sector stood out in 2023 with a 35% share of the investment volume to reach 550 million euros. The second largest transaction of the year in Portugal was a portfolio of 150 supermarkets during the first half of the year. The solid performance and the relatively high yields of Portugal’s retail real estate sector has been attracting a growing number of investors towards the different retail subsectors including shopping centers, while the high street retail new openings are driven by the Food and Beverages sector, according to CBRE.

 

CBRE, that is based in the US, is the global leader in the field of commercial real estate services and investment. Shopping centers managed by CBRE in Spain and Portugal registered an increase in traffic of 8.6% in 2023, with a total of 300.3 million visitors, compared to 276 million from the previous year. Commercial real estate data across 50 assets managed by CBRE shows that Spain closed 2023 with a facility occupancy of 91.4%, while Portugal had a facility occupancy of 95.9%.

 

 

What is the Prime Yield for Portugal’s commercial real estate sector

 

Portugal’s Shopping Centers Prime Yield in Q4 2023 is 6.50%

Portugal’s Retail Parks Prime Yield in Q4 2023 is 6.50%

Portugal’s Supermarkets Prime Yield in Q4 2023 is 6.25%

Logistics in Lisbon Prime Yield in Q4 2023 is 5.75%

Hotels in Lisbon Prime Yield in Q4 2023 is 5.50%

Offices in Lisbon’s CBD Prime Yield in Q4 2023 is 5.25%

High Street Retail in Lisbon Prime Yield in Q4 2023 is 4.75%





  

 

 

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