Cushman & Wakefield anticipates an 8% increase in commercial real estate investment in Portugal in 2025, with an estimated total of €2.56 billion.
Cushman & Wakefield’s 44th edition of Marketbeat Portugal (Spring 2025) analyzes market evolution in 2024 and anticipates key trends for the year. Projections for 2025 suggest continued growth in commercial real estate investment, with an estimated 8% increase compared to 2024.
“The real estate market demonstrated resilience in 2024, with a significant rise in transaction volume and strong contributions from foreign capital. For 2025, we anticipate more sustained growth, driven by greater macroeconomic stability, particularly through the gradual reduction of interest rates, which will encourage transactional activity. Alignment of buyer and seller expectations should stimulate the market, while the compression of prime yields, already observed in the retail sector, may extend to other asset classes, keeping international investors interested,” comments Cushman & Wakefield’s Managing Director in Portugal, Eric van Leuven.
In 2024 (€2.38 billion, according to Cushman & Wakefield data), the retail sector saw a recovery, accounting for half of the total transaction volume. The hospitality and office sectors followed, with 21% and 14% shares, respectively. Alternative assets also strengthened their presence, representing 11% of the total investment volume, notably student accommodation.
Foreign capital, representing over 70% of total investment in 2024, is expected to remain crucial, with international investors maintaining interest in Portugal’s real estate market. The majority of international capital originated in Europe, with French and Spanish markets collectively accounting for half of the foreign volume.
Sustainability and the integration of Environmental, Social, and Governance (ESG) criteria into decision-making were key themes in 2024 across all sectors. Portuguese banks are already applying different interest rates for financing based on investment sustainability. In 2025, ESG trends will focus on decarbonization, climate adaptation, financial transparency, and biodiversity preservation.
“The real estate sector is undergoing significant transformation, driven by regulatory demands and the growing demand for sustainable buildings aligned with ESG practices. Integrating these criteria into investment decisions is now vital for 2025, with ESG investment funds gaining prominence and attracting capital. These trends reflect a structural change where sustainability is essential for competitiveness and long-term economic success,” emphasizes Eric van Leuven.
The number of sustainable building certifications (BREEAM and LEED) issued in 2024 nearly tripled compared to the previous year, predominantly in the office and retail sectors.
Regarding WELL certification (focused on occupant well-being), five distinctions were issued nationally in 2024, all in office buildings. This sector continues to see the most registrations, with nearly 60 buildings currently registered for certification.
Below is a summary of key trends expected to shape occupational markets in 2025.
Occupational Markets
Retail
In 2025, location will continue to be a key factor for brand expansion, particularly in urban centers popular with tourists and businesses. Competition for prime locations is driving up rents, reflecting brands’ investment in strategic positioning. Brands aligned with sustainable practices and social responsibility are increasingly valued. Flagship stores are incorporating automation and integrating physical and digital channels to optimize operations and improve customer experience. The athleisure segment is expected to continue growing, with brands expanding offerings to meet consumer demand.
Offices
The office market in 2025 will prioritize well-being and ESG criteria, with companies favoring certified buildings. Flexible occupation and the preference for flex spaces are growing as companies seek hubs to attract and retain talent. A scarcity of available space in Lisbon and Porto is expected to increase prime rents, with significant new supply not anticipated until 2027/2028. Structured contracts, including long terms and exit options, are becoming more common to ensure stability and cost optimization.
Hospitality
The hospitality sector will continue expanding with the introduction of international operators, particularly in the full-service and luxury segments, and the growth of serviced apartments for longer stays. Tourism will enhance competitiveness through experiences focused on nature, gastronomy, and culture. The North American market is gaining importance, while the Asian market retains high growth potential. Investment is expected to increase, including portfolio sales and operational platform transactions, with investors potentially paying premiums for projects aligned with ESG policies.
Industrial and Logistics
The industrial and logistics sector will be driven by operational efficiency, with companies moving to modern, efficient spaces anticipating medium/long-term growth. Nearshoring is expected to boost demand, particularly in the green energy sector. Demand remains high for modern and sustainable assets that prioritize efficiency, ESG considerations, and functionalities that improve operations and talent retention. Segments like self-storage and data centers are expanding, benefiting from adapting existing buildings and Portugal’s strategic advantages in the technology sector.
The full report can be consulted here.
