Now that the first quarter of the year is over, there is every indication that commercial real estate investors have reason to be optimistic: according to the European Property Outlook H1 2025, investment in the commercial real estate sector will take off again this year and resume its upward trajectory.
This confidence that the investment market may be approaching a positive turning point is the main conclusion of the latest report by BNP Paribas Real Estate, in strategic partnership with WORX Real Estate Consultants, as a partner for the Portuguese market.
According to the projections of WORX and BNP Paribas Real Estate experts, the fall in inflation and the continued easing of key rates, by making the debt markets less restrictive, have allowed easier access to financing, albeit at higher costs than in the relatively recent past. This combination of factors allows more alternative investors to enter the market, helping to mitigate the absence of core investors.
Even if the uncertainty surrounding global trade policy leads some investors to hesitate, the expectation is for a steady increase in the volume of investment in commercial real estate, led above all by the German and British markets. Projections point to an average annual increase of 7% across Europe over the next 5 years, with Portugal expected to grow by 5% per year over the projection horizon. Capital values are also expected to rise, after two consecutive years of decline due to rising yields, this time largely based on rental growth; yields are expected to remain high for some time to come, requiring investors to redouble their focus on managing their portfolio in order to achieve the expected returns.
In this context, Lisbon should be the 3rd capital with the highest increase in capital value in the office segment, 4th in shopping centers and 8th in logistics, out of the 18 European markets analyzed in the Study.
April 2nd, 2025
