Portugal’s restrictions began to be gradually lifted on May 4th after a six-week lockdown, resulting on a GDP contraction of 8.6% forecasted by Oxford Economics.
OFFICES
Greater Lisbon office market registered 24 new lease deals in a total of 40,500 sq.m transacted in the second quarter of 2020, a decrease of 41% compared with the homologous period. As expected, vacancy rate increased slightly to 4.2%. Given that year-end take-up is expected to be 20-25% below 2019, landlords become increasingly available to provide additional incentives.
RETAIL
Take-up volumes registered by Cushman & Wakefield proprietary database show a decrease of 82% in new lease deals in the second quarter of the year, totalling 41 deals with circa 20,000 sq.m of transacted area. Prime gross rents continue at stable levels as landlords are accepting an increase in incentives, on top of the deferred rent payment introduced by the government for the lockdown months.
INDUSTRIAL
From April to June 2020, a total of 18,300 sq.m were transacted in 6 new occupancy deals, totalling a 64,400 sq.m take-up volume in 2020, -9% compared with the same period of 2019. There are still no signs of immediate impact on rental levels, a trend that might continue not only due to the preference by landlords to maintain gross rents, but also partly due to the current lack of quality supply.
INVESTMENT
CRE investment activity was limited to €87.5 million in the second quarter of 2020, mainly focused on the office sector with the €46.5 million Natura Towers purchase by Cofidis featuring as the main deal of this quarter. Most investors adopted a wait-and-see approach given the COVID-19 pandemic but, in the meanwhile, are slowly trying to resume deals, especially in logistics and offices and in the core and core+ segments.
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