WORX Real Estate Consultants has just presented the WMarket Year-end 2024-2025 study, a biannual publication that analyzes the various commercial real estate sectors in Portugal.
WORX Real Estate Consultants’ Research Department highlights the main indicators analyzed in the WMarket Review Year-end 2024-2025 and highlights the attraction of investment in commercial real estate in Portugal, which amounted to around €2,370 million in 2024, 47% more than in 2023. The consultancy mentions that the recent reductions in interest rates have led to some acceleration in investment activity, noting that there has already been a reduction in the differences in the negotiation of purchase and sale values, as financing conditions become more favorable. A more substantial recovery in investment activity is therefore expected in 2025.
Prime yields in Portugal have generally stabilized, following the general decompression of prime yields in 2023. However, some significant transactions, mainly in the fourth quarter of 2024, provided evidence to support a fall in prime yields for retail, namely shopping centers and high street retail, and industrial and logistics, in the order of 10-25 basis points.
Offices
The office rental market recorded its third best year ever, with an occupancy volume of around 222,000 m² in Greater Lisbon in 2024, spread over 173 operations. This occupancy figure also represents a notable increase compared to 2023, having almost doubled. Looking ahead, some adjustments to remote and hybrid working policies, aimed at reducing the number of days in these schemes, are expected to contribute to moderate growth in office demand in 2025.
After a general rise in prime office rents, with particular emphasis on the more central areas, they stabilized over the course of 2024, with prime rents standing at €28/m2/month.
Retail
Retail sales accelerated slightly to an average index of 111.3 by November 2024, reflecting growth of 4%. After maintaining prime rents throughout 2024, the fourth quarter saw a general increase in the various retail segments:
Lisbon’s prime street retail rent is still slightly below the pre-pandemic period, currently standing at €135.0/m²/month;
Oporto’s prime street retail rent at €75.0/m²/month;
Shopping centers at €95.0/m²/month, equaling the pre-pandemic values of 2019;
And retail parks at €12.0/m²/month, continuing the growth trend of recent years.
Industrial and logistics
The industrial and logistics sector recorded more than 778,500 m² occupied in 2024, almost doubling the take-up of 2023, as this had been a year of sharp decline. The vast majority of operations in new space consisted of developments for own occupation, which reflects, on the one hand, the shortage of stock and, on the other, the inadequacy of the conditions of the existing offer in relation to the requirements and demands of the tenants.
The entry of new products onto the market favored growth in the sector’s prime rent, which rose to €5.25/m2/month.
Hotels
Overnight stays in tourist accommodation grew by 4% to 76.1 million by November 2024, leading to increases in total revenue and revenue from accommodation. In operational terms, the average revenue per room (RevPAR) reached €72.0 and the price per night (ADR) €121.6 in the accumulated period from January to November 2024, corresponding to increases of around 7%.
The occupancy rate for tourist accommodation in the cities of Lisbon and Porto was naturally well above the national average, with 74% in Lisbon and 69% in Porto until October 2024. The ADR in the capital was €158 per night and €127 per night in Porto. RevPAR was also high, particularly in the 5-star hotels.
Residential
The housing sector recorded new home loans to individuals in line with the previous year, in the order of €22.3 billion until November 2024. The average underlying interest rate was 3.7%, 0.3 percentage points lower than in the same period in 2023.
The residential markets in the Lisbon and Porto Metropolitan Areas showed a slowdown in the growth of sales values when compared to previous years. In the city of Lisbon, sales values fell by 3% to €4,790/m2 and in Porto they rose by 2% to €3,310/m2.
Regarding this analysis, Pedro Rutkowski, CEO of WORX Real Estate Consultants, reinforces the importance of sharing this study “The WMarket Review Year-end 2024-2025 reflects WORX’s commitment to providing clear and well-founded information on the real estate market in Portugal. In a context of economic recovery and strategic adjustments in the various sectors, we believe that this report is an essential tool for investors, developers and occupiers to make informed and sustainable decisions. It is with great pride that we continue to contribute to the development and transparency of the country’s real estate sector, standing out for the difference in the way we deliver value to our clients.”
Read the full report at: WMarket Year-end 2024-2025
January 30th, 2025
