As the first quarter of the year draws to a close, Worx Real Estate Consultants is launching its first reports on the Commercial Real Estate Investment Market in Portugal and the Lisbon Office Market, with a detailed analysis of activity during the quarter.
These Outlooks not only provide a retrospective analysis of the period in question, but also highlight trends and prospects for the future. Based on the in-depth knowledge and experience of its Research, Capital Markets and Agency Departments, and on the fundamentals of the economic and financial context, Worx looks at the behavior of the different players and the attractiveness of the sector in this context.
Therefore, in highlights duly detailed in the aforementioned Outlooks, here are the Consultant’s perspectives on commercial real estate trends in the coming months:
- According to data from the Bank of Portugal, the Portuguese economy is expected to grow by 2.3% in 2025, slowing to 2.1% in 2026 and 1.7% in 2027. These projections are, however, shrouded in uncertainty, given the destabilization that could result from the geostrategic and trade policy of one of the world’s leading economies, the US, and ongoing armed conflicts.
- In the first quarter of the year Portugal attracted €640 million in the commercial real estate (CRE) market, which represents a year-on-year increase of 156%, with the sale of 50% of Norteshopping for around €340 million being the highlight. Worx anticipates that the volume of investment in 2025 should exceed that of last year.
- Prime yields in the commercial real estate market compressed at the beginning of the year, given the slowdown in financing conditions and financial costs; market fundamentals remain solid and capital is flowing, allowing investment activity in the commercial real estate market to accelerate. In the 1st quarter, prime yields fell by 25 basis points overall, with the exception of prime shopping centers.
- In the 1st quarter, the Lisbon office market absorbed 16,300 m2 (down 78% on the same period last year) in 33 transactions. The biggest deal came from a technology company which occupied 2,800 m2 in Lagoas Park. Looking ahead, 2025 has the potential to maintain the occupancy level of 2024, close to 220,000 m2, given the ongoing negotiation of some operations with scale, and it is also anticipated that some organizations will make space adjustments as a result of the reduction in remote and hybrid work, contributing to moderate growth in office demand in 2025.
- Prime office rents increased in the Prime CBD (zone 1), CBD (zone 2) and Historic Zone (zone 4) by around 4% year-on-year and quarter-on-quarter. The prime rent now stands at €29/m²/month. As long as there are new buildings coming onto the market and deals being closed in these well-located, high-quality spaces, as is the case with Cais 5 and República 5 completed in this 1st quarter, we believe there will continue to be room for prime rents to rise.
See the full reports at: Outlook Q1 2025 – Lisbon Office Market and in Outlook and Outlook Q1 2025 – Commercial Real Estate Investment.
April 30th, 2025
