Economy: Sustained Growth And Inflation Convergence
Portugal’s economic performance is expected to remain resilient in 2026 and 2027, despite a less favourable international environment. According to Moody’s Analytics, GDP is projected to grow by 1.9% in 2026 and 2.0% in 2027, reflecting steady, albeit moderate, economic expansion. Growth will be driven primarily by domestic demand, while a challenging external environment is expected to continue weighing on overall economic activity. Heightened external pressures are projected to higher inflation in 2026, reaching 3.2%. As these pressures ease and labour cost growth moderates over the following years, inflation is expected to gradually converge towards the European Central Bank's target, reaching 2.1% by 2028. Labour market conditions are expected to remain favourable, with the unemployment rate forecast to decline slightly from 5.8% in 2026 to 5.6% in 2027. This reflects the continued resilience of the labour market, despite a moderation in employment growth.
Demand: 191,300 Sq.m Gla Of Retail Schemes In Pipeline
During the second quarter of 2026 one retail scheme was delivered, with the completion of City Center Covilhã, with 18,000 sq.m.
Looking ahead, the development pipeline for the next three years totals 191,300 sq.m. of additional GLA, of which 50% is already under construction. Developers' activity remains strongly focused on retail parks, which account for most of the new supply (96%).
Among the 95,700 sq.m currently under construction, the largest retail park projects include Azores Retail Park (Ponta Delgada) with 18,000 sq.m and RIA 125 Retail Park (Olhão) with 17,000 sq.m.
According to Cushman & Wakefield, retail take-up recorded a total of 62 new store openings during the second quarter of the year, accumulating 130 new openings in H1 2026, representing a 10% year-on-year drop. Considering Lisbon and Porto prime zones, the high street retail format accounted for 8 new openings during this second quarter.
Excluding the high street retail format, shopping centers captured the largest share of new retail units, accounting for 48% of total openings, followed by stand-alone units with a 12% share.
Rents: Increase In High Street Retail Prime Rents
When compared with the previous quarter, prime rental values registered an increase of €2.5/sq.m/month in high street retail in Chiado (Lisbon) and in Downtown Porto (Rua de Santa Catarina).
Regarding the remaining retail formats, prime rental values remained stable in both shopping centres and retail parks.
