Key Takeaways
- Office take-up in Greater Lisbon reached 16,260 sq.m in Q1 2025, with a vacancy rate of 7.6% and 185,500 sq.m under construction.
- Greater Porto office market recorded 2,970 sq.m of take-up, a vacancy rate of 9.0%, and 102,550 sq.m under construction.
- Prime office rents in Lisbon CBD stand at €29.00/sq.m/month, with yields at 5.00%.
- Retail investment volume led the market at €362 million, with high street rents in Lisbon (Chiado) at €137.5/sq.m/month and shopping centre rents at €120.0/sq.m/month.
- Industrial take-up totalled 84,130 sq.m, with Greater Lisbon accounting for 74,740 sq.m and Greater Porto for 9,390 sq.m; prime rents are €5.25/sq.m/month in Lisbon and €5.75/sq.m/month in Porto.
- Significant investment deals include the acquisition of 50% of NorteShopping for €300-350 million and the sale of Ramalho Ortigão 51 (Lisbon office) for €60-65 million.
- Retail pipeline remains robust with 198,430 sq.m under development across Portugal.
Economic Context
Portugal’s real estate market in Q1 2025 is shaped by a stable macroeconomic environment, with moderate inflation and steady employment growth supporting occupier and investor confidence. Interest rates remain elevated compared to pre-pandemic levels, influencing yield expectations and capital flows. Overall market sentiment is cautiously optimistic, underpinned by resilient consumer demand and sustained activity in core sectors.
Demand Overview
Office leasing activity in Greater Lisbon reached 16,260 sq.m, with notable transactions including Lagoas Park (2,800 sq.m, Zone 6) and República, 5 (1,280 sq.m, Zone 2). Demand is concentrated in prime and central locations, with professional services and technology sectors remaining active. In Greater Porto, take-up was 2,970 sq.m, led by leases in Icon Douro (Zone 3) and Bessa Leite Offices (Zone 1). The retail sector saw robust activity, with high-profile openings by cross-border retailers such as Mercadona and Lidl. Industrial demand was strong in Greater Lisbon, driven by logistics and e-commerce operators, with key leases at Logplace Azambuja (11,070 sq.m) and Estrada Vaza Borracha (10,120 sq.m). Major industrial transactions in Porto included Panattoni Park Valongo (7,200 sq.m).
Vacancy Trends
Office vacancy in Greater Lisbon stands at 7.6%, with higher rates in the Western Corridor (Zone 6, 14.0%) and New Office Areas (Zone 3, 8.3%), while prime CBD locations remain tight (Zone 1, 3.6%). In Greater Porto, the overall vacancy rate is 9.0%, with the highest availability in Zone 5 (Others Porto, 14.6%) and Zone 6 (Matosinhos, 11.3%). Industrial vacancy in Greater Lisbon is low at 4.1%. Sublease space continues to contribute to total availability, particularly in secondary office locations.
Rent Trends
Prime office rents in Lisbon CBD are stable at €29.00/sq.m/month, with secondary locations achieving €17.00-24.00/sq.m/month. Porto prime office rents are €21.00/sq.m/month in CBD Boavista. Retail rents remain robust, with high street rents in Lisbon (Chiado) at €137.5/sq.m/month and shopping centres at €120.0/sq.m/month. Industrial prime rents are €5.25/sq.m/month in Lisbon and €5.75/sq.m/month in Porto. Landlord concessions remain moderate, reflecting steady demand in prime segments.
Construction & Supply Pipeline
The office development pipeline is active, with 185,500 sq.m under construction in Greater Lisbon and 102,550 sq.m in Greater Porto, including significant projects in Zones 1, 2, and 3. Retail development is robust, with 198,430 sq.m in the pipeline, notably in the Lisbon Metropolitan Area, Centre, and South regions. Industrial supply is supported by ongoing projects such as Panattoni Park Valongo (75,000 sq.m) and Loures Logistics Warehouse (54,000 sq.m). New completions are expected to further diversify the market offering across all sectors.
