Cushman & Wakefield MarketBeat reports analyse quarterly Portugal commercial property activity across office, retail and industrial real estate sectors including supply, demand and pricing trends at the market and submarket levels.
After two and a half months of general lockdown, the sanitary situation in Portugal improved substantially leading to a progressive four-phases lifting of lockdown restrictions, starting on March 15th.
Moody’s Analytics foresees a 5.0% GDP growth for the Portuguese economy in 2021, highly boosted by year-on-year increases of 10.7% in investment and 6.7% on exports. The forecast for 2022 is a 3.8% GDP growth.
Office
Lisbon: The Greater Lisbon office market registered 27 new lease deals in a total of 29,180 sq.m transacted in the first quarter of 2021, representing a year-on-year decrease of 34%. Parque das Nações (zone 5) registered 7 deals comprising 10,120 sq.m, including two pre-lets totalling 6,000 sq.m in Lumnia building (first of The Exeo Office Campus project).
Porto: Given tenants cautious approach due to the current pandemic and being the secondary office market in Portugal, the leasing activity in Greater Porto over the first quarter of 2021 was reduced to merely 2,940 sq.m distributed over 8 deals, meaning an average deal size of 370 sq.m. Porto - Boavista (zone 1) accounted for 64% of the take-up and featured the two largest deals of the year.
Retail
In the first quarter of 2021, retail demand recorded by Cushman and Wakefield’s proprietary database, merely registered 35 new openings, representing a significant decline of 71% year-on-year, with a combined area of 7,500 sq.m. Among these, high street format and Food & Beverage aggregated the highest share, of 63% and 54% respectively.
Industrial
During the first quarter of 2021, 15 new industrial occupancy deals in a total of 102,220 sq.m were transacted in Portugal, a year-on-year increase of 48%. This activity was mainly concentrated in Greater Lisbon and Greater Porto, recording 26,730 sq.m and 39,000 sq.m, respectively.
Investment
Although real estate investors demonstrate to be well capitalized in this crisis, with substantial volumes of liquidity ready to deploy, they continue to meticulously manage their current portfolios, as well as analyse new market opportunities.
Reflecting a much-reduced activity level throughout the first quarter of 2021 (highly affected by the long lockdown), institutional investment reached a mere €202 million. Its vast majority was in the office sector (66%), through the sale of Navigator portfolio (Maxirent fund, mostly composed by office assets) for approximately €120 million.
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