Country’s “advantageous geopolitical situation” highlighted
International property consultants CBRE predict 2025 will be a year of growth “in every dimension” for the Portuguese real estate market.
The company has released its ‘2025 Real Estate Market Outlook’ report for Portugal which explains why it has high hopes for this year.
“2024 was a year of adjustment and growth for the Portuguese economy, with reduced inflation and key interest rates decreases. The economy performed positively, given the broader European context, and real estate investment showed signs of recovery,” the report states.
“What to expect in 2025? The outlook is optimistic: economic growth, favourable financing conditions, interest rates decrease, alongside with the convergence of buyer and seller expectations,” it adds.
Increased transactions and higher investment volumes, “potentially reaching €2.5 billion” (an 8% year-on-year increase) will contribute to this upward trajectory, while retail and hotel sectors are expected to attract the most investment for the third consecutive year.
Industry’s growing trend
In the occupational markets, activity is expected to intensify throughout the year, CBRE predicts, while in the office sector, the demand for high-quality buildings will drive prime rents upward. The same is expected in the industrial and logistics sector, benefitting from the “growing trend of industrial nearshoring and its logistical implications,” the company says.
In the high street retail sector, where “lack of availability marked the scenario in 2024”, new stock currently under construction is expected to reach the market, CBRE states, predicting that “a strong performance is anticipated in the main high street axis in 2025, both in terms of occupancy and rents.”
Meanwhile, the hotel sector is also expected to perform positively, “in line with the substantial growth experienced in 2024”.
“Sustainability will be a cross-cutting theme, and stricter regulations impacting real estate development and management,” CBRE adds.
All these factors are backed by renewed investor confidence in the Portuguese economy.
Sound performance
“Most economic indicators for Portugal reflect a sound performance and public finances have shown signs of better managed public accounts. Investors are viewing these economic elements favourably,” the report states.
Portugal’s “advantageous geopolitical situation” is also highlighted, thanks to its “physical distance to current armed conflicts and favourable global geopolitical reconfiguration,” as well as its “demographic dynamism,” sustained by a “high migratory balance.”
“Today, we can confidently say that the Portuguese real estate market has recovered across all key asset classes,” says CBRE Managing Director in Portugal, Francisco Horta e Costa.
“During 2024, we’ve seen investment pick up substantially and a very dynamic occupier performance in all sectors. Most importantly, the asset classes’ fundamentals have also improved and have good prospects,” says Horta e Costa, adding: “We realistically expect the positive dynamics to continue during 2025.”
By MICHAEL BRUXO
