Get a summary of the investment market in the Southern Regional Markets - Italy, Spain and Portugal - giving an overview of the historic investment trends and volumes, for each country.
The real estate investment market across Southern European countries — Italy, Spain, and Portugal — continues to demonstrate resilience and a strong capacity to attract capital, achieving transaction volumes exceeding €12 billion in the first half of 2025, marking an increase of over 30% compared to the same period last year.
The market is primarily driven by the Hospitality and Retail sectors, underpinned by robust fundamentals and the sustained dynamism of tourism demand and consumer spending. Urban regeneration is also gaining momentum, with numerous projects to convert obsolete buildings – particularly offices – into hotels and residences.
The Living sector, particularly within metropolitan areas, is emerging as a growing asset class of interest for investors. Meanwhile, the logistics and industrial sectors are showing positive signs, although still affected by supply constraints. Investor interest is focused not only on prime assets but increasingly on core+/value-add opportunities, with a focus on transformation potential and value creation.
These factors, combined with improving financing conditions, highlight how Southern Europe is experiencing a period of consolidation and growth, with an increasingly mature, diversified and innovation-oriented market in terms of space utilization.
Portugal Investment Market
In the first half of 2025, Portugal’s commercial real estate (CRE) market recorded a total investment volume of €1.257 Mn, representing a 70% year-on-year increase.Retail was the standout sector in H1 2025, attracting €587 Mn - more than tripling its volume from H1 2024 - with most of this amount concentrated in shopping centers. Hospitality maintained its appeal with €341 million, reflecting sustained interest in leisure and tourism assets. Office investment rose to €163 million, but still representing only 13% of the total volume. The Industrial & Logistics volume grew significantly compared to H1 2024, although supply constraints continue to limit activity. The Living segment, including Student Housing, registered a decline; however, it is expected to recover by the end of the year.
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