The Portuguese retail market in Q3 2025 exhibited a stable performance, underpinned by strong domestic economic growth and focused development activity in out-of-town formats. While the overall pace of new store openings has moderated, the high street segment remains crucial for brand entry, and prime rental values are seeing upward pressure in key urban locations.
Economic Context
Portugal’s economy is forecast to grow by 1.7% in 2025, with further acceleration in subsequent years, supported by resilient domestic demand and improving exports. Inflation is expected to moderate, holding at 2.4% in 2025 before stabilizing at 2.0% in 2026 and 2027. Unemployment continues its downward trend, falling from 6.1% in 2025 to 5.7% in 2026, reaching its lowest level since 2001.
Demand Dynamics
Retail demand, measured by new store openings, showed a slight easing in momentum. Q3 2025 registered 180 new openings, bringing the nine-month total to 580, an 11% contraction year-on-year.
- High Street Dominance: High street retail continued to attract the majority of new entrants, accounting for 69% of the openings, followed by shopping centres at 17%.
- F&B Leads Activity: The Food & Beverage (F&B) sector was the single largest driver of activity, responsible for nearly half (46%) of all new retail launches.
Major occupancy transactions included several large-format, stand-alone units secured by grocery retailers such as Pingo Doce and Continente Bom Dia.
Rent Trends
The competitive environment for prime retail space is translating into rental growth. Prime rents saw an increase of €5.0/sq.m/month in Lisbon's key luxury street, Avenida da Liberdade. While rents across other retail formats held stable this quarter, they are anticipated to rise in the short term.
Current prime rental levels stand as follows:
- Lisbon-Chiado: €140/sq.m/month
- Lisbon-Av. Liberdade: €120/sq.m/month
- Shopping Centres: €120/sq.m/month
- Porto-Downtown: €85/sq.m/month
- Retail Parks: €13/sq.m/month
Pipeline
The development pipeline is focused overwhelmingly on the provision of larger, more accessible out-of-town spaces. The retail pipeline totals 187,300 sq.m GLA, with a massive 86% bias towards retail parks.
Currently, 77,300 sq.m is already under construction, featuring several key projects:
- Retail Park Póvoa de Varzim (21,000 sq.m)
- Azores Retail Park (18,000 sq.m)
- City Center Covilhã (18,000 sq.m)
The pipeline demonstrates a healthy distribution across all major regions, with significant developments planned for the Lisbon Metropolitan Area and the Southern regions as well.
