Commercial Real Estate Investment in Portugal Witnesses Remarkable 13% Growth in First Half of 2023
Portugal stands out in the European landscape, defying the prevailing trends, as commercial real estate investment exhibits commendable progress.
Commercial Real Estate
is not just about tall buildings and sprawling landscapes, but also the stories they tell of economic prowess, resilience, and foresight. Portugal’s tale in the first half of 2023 is one of such resilience and strategic acumen. A comprehensive study, WMarket Review Mid-year 2023, from Worx Real Estate Consultants, reveals that commercial real estate investment in Portugal exceeded a whopping 700 million euros. This figure is not only a 13% increase from 2022 but also stands in sharp contrast to the 57% contraction seen in the broader European market. This divergence can be gleaned from resources such as Mercer’s mid-year economic and market outlook, which offers a profound analysis of European economic patterns.
The Pillars of Growth
One of the prominent segments that underpinned this growth was the hotel industry. This sector led the pack with a 39% contribution to the investment volume. The sale of Dom Pedro Hotels to Arrow Global at a transaction value of 250 million euros was the cherry on top. This purchase alone signified the largest transaction in the period under review.
Following the hospitality industry was the retail sector. With 11 noteworthy transactions, it pumped an impressive 220 million euros into Portugal’s commercial real estate coffers, accounting for 32% of the overall volume. The crown jewel of this sector was the sale of the Amália Portfolio to LCN Capital Partners, which was priced at a staggering 150 million euros. Furthermore, when it comes to prime street commerce in Lisbon, the rent recaptured its glory at €130,0/m²/month, just a marginal 7% below the 2019 rate. This comprehensive guide on property investment opportunities in the Portuguese market provides a deeper insight into the ongoing trends.
A Glance at Office Spaces and Industrial Ventures
The office space in Greater Lisbon, until July 2023, witnessed a brisk movement, with 44,300 m2 of offices exchanging hands across 84 operations. The Worx study underscores a rising trend in supply that’s expected to endure. At the moment, 13 projects are under construction that will present the market with approximately 261,000 m². Additionally, nine more projects are slated for the coming three years, promising over 47,000 m² of fresh offerings. Interested in understanding the driving forces behind this trend? The research mid-year outlook by JPMorgan provides enlightening viewpoints.
Furthermore, the logistics sector displayed stellar performance. Data highlights about 294,000 m2 of absorption during the year’s first semester, split over 32 transactions, marking a 41% year-on-year growth.
Rent Dynamics
The ever-evolving dynamics of rent have always been a topic of keen interest. For a comprehensive overview of the changes and trends, readers can check out the rise in homes for sale in Portugal in Q2 2023.
In Conclusion
As Portugal ascends in its commercial real estate journey, the ripple effects will likely be felt across various sectors, promising robust economic health and further opportunities for investors. Such robust growth in challenging times stands testament to Portugal’s economic resilience and strategic foresight. With such a promising start to the year, the horizon looks brighter than ever for Portuguese real estate.
FAQ
Q1: What was the overall growth of Commercial Real Estate investment in Portugal for the first half of 2023?
A1: The investment in Commercial Real Estate in Portugal surged by 13% in the first half of 2023.
Q2: Which sector contributed the most to this growth?
A2: The hotel industry was the leading segment, contributing 39% to the total investment volume.
Q3: How did Portugal’s growth in this sector compare to the broader European market?
A3: Portugal’s 13% growth contrasted sharply with the European market, which saw a contraction of 57%.
Q4: How has the retail sector in Lisbon performed in terms of prime street commerce rent?
A4: In Lisbon, the rent for prime street commerce has reached €130,0/m²/month, which is 7% below the 2019 rate.
Q5: Are there any significant projects or developments anticipated in the near future for office spaces in Greater Lisbon?
A5: Yes, currently, 13 projects are under construction that will introduce around 261,000 m² to the market. Moreover, an additional nine projects are expected in the next three years, adding over 47,000 m².