Investment in commercial real estate in Portugal grows to €2.6 billion

Investment in commercial real estate is expected to reach €2.6 billion by the end of 2025 in Portugal, according to forecasts by the consulting firm CBRE sent to ECO. The amount invested in data centres, offices, shopping centres, shops and warehouses will thus increase by around 13% compared to last year.

Despite year-on-year growth, the consultancy acknowledges that this “was not as good a year as 2024”, when the non-residential real estate segment grew by 44%, but rules out a scenario of stagnation. “For large global investors, offices are not so sexy because they were a little traumatised by the pandemic, but we are not at a plateau to say that this will be the case for the next decade”, explained André Almada, head of Offices at CBRE.

There are even more explanations for this phenomenon: they have found other asset classes in which to spread the risk, including residential real estate, nursing homes, student accommodation and even data centres. Even so, companies continue (and will increasingly continue) to need offices.

CBRE anticipates that workplace occupancy will increase, as almost half of leaders will call for workers to return, according to a survey of 117 European companies. This is because employers have begun to notice a gap between the days they ask for in-person work and what employees actually do.

“We are waiting for activity to convince people to be in the office more often. It’s not out of spite. It’s because the difference between managers’ expectations regarding physical presence and what employees actually deliver is creating some disruptions at work, so they will start to address this proactively”, said José Maria Moutinho, associate director at CBRE.

What are the trends in the office market?

• Demand for greater presence and engagement in the office: There is a “growing discomfort” because companies are increasingly dissatisfied with current levels of presence, with 47% of them predicting an increase in presence, compared to 31% in 2024.
• Flexibility and maximisation of space efficiency: Investment in space optimisation, so companies are looking for higher desk-sharing ratios to optimise, and unassigned seating is the norm (61%). In addition, flexible spaces (coworking) are on the rise to avoid capital commitments.
• Balancing costs and employee needs: More than half of companies (55%) expect to reduce their office space in the medium term due to hybrid working (70%) and cost reduction (56%).

João Diogo Alves Pereira, director of CBRE’s Office division, explains that the flexible model is gaining prominence because it acts as a “gateway” for foreign multinationals, which cannot find suitable properties as soon as they enter Portugal and are able to find quality properties immediately in private or shared co-working spaces. “Flex is flexing”, he summarised during the presentation Realising Potential in Office.

In practice, it ends up being a way to obtain contractual flexibility (without contracts as long as in traditional leases, where the minimum requirement is five years), lower investment (minimal construction costs), shorter time-to-market (quick entry) and the possibility of contracting workstations (places or rooms) as the business scales up, in addition to a differentiated range of services (cafeteria and barista, beautician, etc.) that helps retain and attract talent.

Prime office rents rise by more than 50% in eight years

The data shows that the main cities, Lisbon and Porto, continue to be sought after by organisations, so office vacancy rates are only 5.1% and 8.1%, respectively. In other words, both are below the European average, which stands at 9.2%. “If this were the unemployment rate, we would say we had full employment”, says André Almada, head of Offices at CBRE.

In a comparison between 2017 and 2025, prime rents rose 58% in the capital, to €30 per square metre, and increased 55% in Porto, to €21 per square metre. This may seem like a natural increase for this time frame, but it is worth remembering that this price remained virtually unchanged in the early 2000s.

The profitability of properties in premium areas (prime yield) stands at 5% for the “group” comprising Avenida da Liberdade, Marquês de Pombal, Avenida Fontes Pereira de Melo and Saldanha in Lisbon and 6.5% for the Boavista area in Porto.

“It is important to note that this year there was a transaction, Deloitte’s future headquarters in Porto, in a building that was completely repositioned, with 10,000 square metres of above-ground construction, which was a flight to quality [option for lower risk]. Unfortunately, there are not Deloitte headquarters every day”, noted André Almada.

Portugal with the second highest increase in Europe in occupancy

Interestingly, Portugal is one of three countries in Europe where office occupancy is growing compared to the pre-Covid-19 period, probably due to the arrival of start-ups and multinationals, with extensive recruitment processes, over the last few years. A comparative analysis between the average occupancy rate for 2022-2024 and 2017-2019 concluded that offices in Portugal are 6% more occupied, which means that the country is only behind Norway, where growth was 19%. Completing the podium of this movement – in contrast to the rest of Europe – is Slovakia (+1%).

At the opposite end of the spectrum is Ireland, which suffered a dramatic 43% drop in office occupancy due to restructuring and the adoption of teleworking by technology companies based there, namely Amazon, Meta (Facebook) and Google, whose European headquarters are located in the Irish capital. “Dublin was a technology hub and suffered a reduction in rent” from a total of €700 per square metre (prime) to €673 per square metre between 2019 and 2025, said José Maria Moutinho. So much so that the vacancy rate in Dublin (17.3%) is almost double the European average.