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WORX publishes WMarket Review Year-end 2022-2023

Worx Real Estate Consultants has just presented the WMarket Review Year-end 2022-2023 study, a biannual publication that analyzes the various commercial real estate sectors in Portugal and presents trends and forecasts for the coming months.

Regarding this analysis and presentation of trends, Pedro Rutkowski, CEO of Worx Real Estate Consultants, reinforces the importance of sharing these insights: “In this edition of the WMarket Review Year-End 2022-2023, we presented some new features that we considered particularly relevant and seek to meet our clients’ and partners’ need for information and knowledge of the real estate market. Given the challenging times we are going through in macroeconomic conditions, we have given priority to highlighting the trends and forecasts for the near future. These same perspectives have been corroborated and complemented with the opinions we have gathered from 18 highly relevant players with a high knowledge of the real estate market, which constitutes another innovation in this edition and which we believe greatly enriches it. Finally, and because real estate sustainability is already an unavoidable topic in the sector, we have incorporated an exclusive chapter on this topic, in which we address its emergence, the consolidation of sustainability certifications and the regulatory pressure (Taxonomy, CSRD and SFDR)”.


Key highlights from WMarket Review Year-end 2022-2023:

  • Occupational market resilience remains robust across all real estate sectors. In 2022, offices recorded a historic take-up figure of 272,000 sqm, retail achieved a 6% increase in sales volumes, for logistics it was the second best year with 605,000 sqm taken up, and tourism recorded a recovery to 69.5 million overnight stays.


  • The high level of demand has allowed operating indicators to be maintained and even, in many cases, rental values to rise to new levels. Worthy of note are offices, which reached a prime rent of €26/m2/month, while traditional logistics reached €4.35/m2/month on the prime axis.


  • Portugal recorded its third best year ever and was also the 3rd fastest growing European market in terms of volume, with €3 billion invested by 2022. Compared to the European market, it not only registered an inverse growth trend (PT +45%, EU -14%) but also a capital allocation by sectors (PT Hospitality 31%, EU Offices 36%).


The report analyses the most relevant areas that contribute to the dynamism and growth of the economy, especially the residential, tourism, logistics, retail and office markets, always with good practices in terms of sustainability framework, with special penetration of certifications in the office market this year. Sustainability is already part of the action plan of companies, whatever their core business, and there will even be an upward trend in capital flows into sustainable assets and funds in the near future, which will continue.

The Research Department of Worx Real Estate Consultants highlights the main indicators analysed in the WMarket Review Year-end 2022-2023 and points out the €3,000 million in investment in the commercial real estate (CRE) market, which this year registered the third best year ever and represents growth of 45%. A trend that goes in the opposite direction to the European market, whose volume invested in CRE fell 14%. This is a sign that the substantial increase in the cost of financing was felt earlier in the other geographic areas, given the greater liquidity of those markets.

Already in 2023, the volume of investment should register a slowdown, expected especially in the first half of the year, given the current macroeconomic context.

Prime yields in Portugal have generally decompressed by 25 basis points in the last year. The office sector and the retail park segment are the exception, as they have returned to 2021 values, after slight compressions in mid-2022. A further increase in yields is expected this year in all sectors, as the domestic market hasn’t comported in integrity this movement yet, and is expected to be more moderate than in other European markets. This will establish a “new normal” for benchmark yields in 2023. Nevertheless, exit capital gains are not expected to fall sharply in Portugal given the resilience of the occupational market which continues to positively pressure rents in some sectors.



In 2022, the office market transacted a volume of 272,000 sq.m in Greater Lisbon, distributed by 200 deals. This level of demand represents a 68% growth compared to 2021, reaching a historical record that exceeds the previous peak of 2018.

After an historic year, office demand seems to remain resilient to adverse exogenous factors. Demand in 2023 is expected to remain above the average of the last five years. The market continues to register several new requests from companies that are setting up in Portugal for the first time, as well as a continuous growth of tech companies, which associated to the increasing absorption of space from flex office operators, will mark the occupational dynamics of the Lisbon office market in 2023.

Prime rents in the office market have registered slight increases over the last year. The Prime CBD and the Historic Area stand out, with prime rents of €26.0/sq.m/month and €24.0/sq.m/month, representing year-on-year growth of 4% and 20%, respectively. Gross prime rents should still show room for slight increases in prime and riverside zones. However, given the sharp increases in fit-out costs, landlords are likely to be more willing to provide incentives and contributions to motivate companies to move in.



The retail sector has recovered, with private consumption and tourism activity supporting tenant performance, which saw sales grow by 6%, and demand for new retail space in 2022.

Prime rents have remained stable over the last year, at €127.5/sq.m/month in Lisbon’s high street retail, which is still 9% lower than in 2019. In Porto’s high street retail, the prime rent remained close to full recovery, at €67.5/sq.m/month. The prime rent charged in shopping centres registered a decrease of 5% in comparison to 2019, remaining in 2022 at €95.0/sq.m/month. Retail parks were the exception, with prime rents increasing to €11.5/sq.m/month.

Omnichannel solutions, which combine online and physical sales, and local consumption concepts with a growing demand for convenience and proximity retail shops, are the main trends in the retail sector.


Industrial and Logistics

Activity in the I&L sector in Portugal recorded almost 605,000 sq.m of take-up in 2022, reflecting a year-on-year fall of 21%. The average deal size increased to 7,960 sq.m in 2022 with a total of 76 deals accounted for, which compares with 7,290 sq.m in 2021.

The recorded fall is justified by the strong demand registered in 2021, since the COVID-19 pandemic drastically changed the scenario of the sector with the increase in online commerce and consumer demand in general.

This demand puts pressure on logistics operators’ need to stock and expand, resulting in historic occupancy levels in 2021 and considerably high levels in 2022.

In Q4 2022, there was an upward trend in prime rents in the locations closest to high density urban centres, and in the main areas with new projects in the Lisbon Metropolitan Area. Rents in the city of Lisbon and the Loures-Amadora axis were the highest, at €5.75/sq.m/month prime rent, followed by the Alverca-Azambuja axis, where rents increased slightly to €4.35/sq.m/month, and the Western Corridor registered the third highest rent in the Greater Lisbon market, given its proximity to urban centres, at €5.25/sq.m/month prime rent.

It is estimated that the scarce supply of good quality in the market, together with the entry of new modern spaces, will lead to an increase in rents in the short term, with this increase being higher in last mile spaces. Automation, robotisation and energy saving are the main trends pointed out for the sector.


Real Estate Sustainability – a new chapter in the WMarket Review Year-end 2022-2023

 It is unavoidable to talk about real estate without talking about sustainability, where the ESG framework has gained relevance. In the first instance, it has been signalled with the certification of assets, but without neglecting the pertinence of a holistic approach with integrated ESG strategies, based on systemic thinking, which goes beyond the legal requirements and is oriented towards the ultimate end: the creation of sustainable value for all stakeholders. Players that have already identified and recognised the strong financial incentives and important management of actual and potential risks driven by regulatory pressure (Taxonomy, CSRD and SFDR), have sought to get ahead of the curve. This allows them to be seen as pioneers, reduce transition costs and gain market competitiveness. Therefore, it is unquestionable that we’ll witness an upward trend in active capital flows and sustainable funds in the near future, that will endure.


Other topics under analysis in WMarket Review Year-end 2022-2023

The WMarket Review Year-end 2022-2023 also focuses on the tourism, residential and alternative sectors, with the healthcare, living and data centres segments, presenting the main data and indicators of these sectors.

In the tourism sector, tourism demand reached 26.5 million guests and 69.5 million overnight stays in touristic establishments in 2022. These figures showed a solid recovery after the pandemic, reaching almost the levels of 2019, being only 2% and 1% below, respectively. The demand profile is gradually coming back into line with 2019, both in terms of geographical distribution and type of accommodation. For 2023, Portugal should be able to maintain high levels of demand, although we anticipate some slowdown in the families’ disposition to spend their savings on travels.

In the residential sector, demand has remained high at a time when supply has fallen sharply, which has kept up the pressure on sale prices. Prices increased by 1% in Lisbon and 9% in Porto in 2022, standing at €4,220/sq.m and €3,120/sq.m, respectively. Of note is the growth of digital nomads who, encouraged by tax benefits for non-habitual residents, are fuelling foreign-sourced demand for homes. Since the amendment to the Foreigner’s Law in November 2022, more than 200 visas have been issued for remote workers.

In the healthcare and living areas, hospitals, senior residences, student housing and residential for rent are some of the segments that are currently consolidating in the national market with the entry of new players, mainly through specialised international investors and operators that buy large portfolios of assets. However, the lack of income-generating assets in these segments has channelled investment into their real estate development. Thus, the Healthcare, Living and Data Centres areas present considerable growth potential in the national market in 2023.


Download the WMarket Review Year-end 2022-2023 in our Research area.


March 17, 2023

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