Office Market Overview

Office

Updated in May 2025

The office market in Portugal is concentrated in Lisbon, although Porto is recording strong dynamics since 2016. Demand from international companies, relocating their outsourcing services to Portugal is also observed in other cities in the country, beyond Lisbon and Porto.

LISBON OFFICE MARKET

Lisbon Office Zones

Source: CBRE Research

A boost in the residential and tourism markets led to the conversion of office buildings in the main city areas for both these sectors, resulting in a significant decline in the total office stock, which was fully revised in 2018. The current stock comprises 4.67 million sqm.

Over the last few years, take-up has been lifted by a rise in outsourcing activity, with the establishment and expansion of shared services from foreign companies in Portugal, as well as by increasing growth from technology companies.

Between 2015 and 2019, Lisbon's office market averaged 172,000 sqm in annual take-up with around 220 deals per year. The COVID-19 pandemic caused a sharp decline in 2020, but recovery began in 2021. By 2023, despite a 60% drop in occupancy to 113,000 sqm, driven by relocations and strong performance in key sectors, demand for office spaces gradually increased.

The numbers for 2024 show growth, there were around 222,000 sqm in annual take-up, accounting for 176 deals (+92.7% Y-O-Y), with “Financial Services” and “TMT's & Utilities” being the sectors with the highest share of occupancy. 

Gross Office Take-Up in Lisbon

 

Source:  CBRE Research

2024 marked the historic peak of the last decades in terms of total completion of office space, accounting for 95,011 sqm, of which 53,904 sqm were built under a speculative framework. 2025 is expected to be yet another record year with 127,241 sqm of new office space , from which only 31,010 sqm are not yet committed.

New office completions in Lisbon

 

Source: Cbre Research

Office rents in Lisbon have shown a consistent upward trend, with CBD1 historically leading in rent prices. The Historic Centre and Riverfront area experienced a significant increase in rents, especially since Q4 2019, primarily due to the rise in qualified stock, making it the second area with high rent prices today. CBD2 has seen a steady increase in rents, and in the past year, the rents have been approaching those of the Historic Centre. The Expansion Area and Parque das Nações are also gaining attractiveness, exhibiting similar growth patterns. The Western Corridor, despite having the lowest rents, shows a gradual upward trend. 

The overall upward trend in rent prices is expected to continue.

Lisbon Office Rents

Source: CBRE Research

The vacancy rates for office spaces in Lisbon show varied trends across different zones. CBD1 and CBD2 have maintained relatively low vacancy rates, indicating strong demand and limited availability. The Expansion Area and Parque das Nações have experienced moderate fluctuations, reflecting evolving market dynamics and development activities. The Historic Centre and Riverfront area records the lowest vacancy rates. Conversely, the Western Corridor has exhibited the highest vacancy rates, pointing to a slower absorption rate in this zone. This reflects a global trend where companies are not adopting a "suburban strategy" and instead opting for prime products in prime locations despite the higher rents, commonly known as a "flight to quality". Overall, the total vacancy rate across all zones increased until mid to late 2023, after which a downward trend has been observed, highlighting the growing demand for office spaces in Lisbon.

Lisbon Office Vacancy Rate

Source: CBRE Research

PORTO OFFICE MARKET

Porto Office Zones

Source: CBRE Research

The office stock is notably diverse, encompassing modern buildings predominantly situated in the CBD Boavista and Vila Nova de Gaia zones, alongside structures that have been repurposed from former industrial premises. Most existing office buildings feature small-sized office spaces, which fall short of the current demand for expansive floorplates. In recent years, the Porto office market has witnessed a substantial surge in demand from technology firms and shared services of international companies, which occupy medium to large-sized office spaces. Consequently, the Porto office market is undergoing a transformative phase, as historically, demand was almost exclusively local and for smaller areas.

Indeed, take-up has shifted from an annual average of 16,000 sqm during the period 2007-2015, to 56,600 sqm in 2016-2022. In 2023, the Porto office market concluded with a take-up of 50,000 sqm, representing a 15% decrease compared to the previous year. However, 2024 altered this trend, with the market closing with a take-up of 76,581 sqm, signifying a 53.16% increase. 

The notable increase in take-up in 2024 can be attributed to several key factors. Firstly, both Lisbon and Porto are relatively small markets, with Porto being particularly constrained in size. Furthermore, the Porto market suffers from a shortage of prime office spaces. This surge in take-up was primarily due to two large deals made during 2024, which represented about 34% of the total take-up, summing up approximately 6,444 sqm. This naturally exerted a considerable influence on a market with limited depth. 

Gross Office Take-Up in Porto

 

Source: CBRE Research

The take-up in Porto surpassed expectations, with initial projections estimating around 55,000 sqm for 2024. Not only did it outperform the figures from 2023, but it was only narrowly surpassed by 2018, which remains the best year since 2014. Similar to Lisbon, the construction of new office spaces in the Porto region was minimal for several years. It wasn't until 2019 that we began to observe increased development activity. In 2024, 62.7 thousand sqm were completed, and for 2025, the completion of 75,576 sqm is anticipated. The total office stock in Porto amounts to approximately 1,41 million sqm, of which 1,32 million sqm is occupied, underscoring the need for new construction in this market.

New office completions in Porto

 

Source: CBRE Research

Office rents in Porto have shown a consistent upward trend, with CBD Boavista historically leading in rent prices. CBD Downtown, which previously had the second highest rents, has recently been surpassed by ZEP due to the addition of qualified stock in this zone. Maia, Matosinhos, and Gaia have demonstrated similar trends in rents; however, in the past year, the rents in these three zones have diverged significantly, with Matosinhos presenting the highest rents.

The consistent upward trend in Porto Office rents is expected to continue. 

Porto Office Rents

Source: CBRE Research

The vacancy rates for office spaces in Porto show varied trends across different zones. CBD Boavista has maintained moderate vacancy rates, indicating steady demand and availability. In contrast, ZEP currently has the highest vacancy rate, with a significant increase observed between late 2022 and early 2023. Matosinhos and Maia exhibit similar trends in vacancy rates, reflecting consistent market behavior. Meanwhile, the Gaia zone has seen a substantial decrease in vacancy rates since Q4 2019, and the Eastern Zone stands out with the lowest vacancy rates.

Overall, the vacancy rate has indicated a healthy demand level for office spaces in Porto.

Porto Office Vacancy Rate

Source: CBRE Research

Retail Market Overview

Retail

Updated in May 2025

 

In 2024, the retail market in Portugal continued to show resilience and growth. The sector experienced a notable increase in consumer confidence and spending, driven by both international and domestic tourism. The development of new retail spaces has been particularly active since 2019, highlighting the ongoing demand for modern retail environments and the adaptation of the market to new consumer behaviors.

 

Retail Schemes

Retail Scheme Format Description Montlhy rent
Shopping Centre

130 schemes (> 5,000 sq m)/ 2.9 million sq m GLA.

Consolidated and mature sector with wide offer spread around the country.

Colombo in Lisbon, and NorteShopping in Porto, are considered the top shopping centres in Portugal.

€95.00/sqm - Lisbon

€75.00/sqm - Porto

Retail Park

46 schemes/ 547 thousand sq m GLA.

Several projects are being developed or under licensing.

Recent openings:

  • Casal do Marco (12,000 sq m);
  • Lagos Retail Park (12,000 sq m);
  • Phase I - Salinas Park (8,000 sqm).

Under construction:

  • Fábrica do Cobre (10,000 sq m);
  • City Centre Covilhã (18,000 sq m)
  • Nova Vila Retail Park (21,500 sq m).
€11.50/sqm
Outlet

9 schemes/ 155,000 sq m GLA.

The best outlet centres are Freeport Lisboa Fashion Outlet in Greater Lisbon, and Vila do Conde Porto Fashion Outlet in Greater Porto.

€27.50/sqm

Department Stores

The Spanish El Corte Inglés, is the major department store operator in Portugal, and the owner of two retail schemes in the country, one in Lisbon and other in Vila Nova de Gaia (Porto region).

It is the preferred gateway for premium brand testing in Portugal.

 

NA

 

The investment trends in Portugal's retail sector have shifted over time. From 2010 to approximately 2019, investors predominantly focused on Shopping Centers, as evidenced by the higher investment amounts during this period. However, from around 2020 onwards, there has been a noticeable shift, with more investments being directed towards Retail Parks. This change indicates a growing investor preference for this type of retail scheme, likely due to their adaptability and potential for higher returns in the evolving retail landscape.

 

Retail Schemes Stock addition

Source: CBRE Research

Rental income for various retail schemes in Portugal has remained stable over the years, with gradual increases rather than abrupt changes. The only period of contraction was during the Covid-19 pandemic, mainly in shopping centers, but this was followed by a recovery. Rental rates for shopping centers are higher compared to Retail Parks and Outlets. This stable growth trend is expected to continue.

Retail Schemes Rents

Source: CBRE Research

 

High Street Retail

  Street  Description Montlhy rent

 

Lisbon

Avenida da Liberdade Luxury and high-end supply. €125/sqm
Rua Garrett in Chiado Most vibrant and trendy retail area providing an eclectic combination of well-known retailers like Inditex group and Hermés. €145/sqm
Rua Augusta in Downtown Wider mass-market offer and several F&B units with terraces targeting tourists. €140/sqm

 

 

 

 

Porto

Rua de Santa Catarina

The city’s most important retail street with the highest footfall and well established stores, predominantly mass-market fashion and accessories segment. Santa Catarina is in itself a destination.

€85/sqm

Clérigos

Tourist area with heavy pedestrian traffic, becoming firmly established, combines mass-market fashion and accessories with catering.   €62.50/sqm
Mouzinho-Flores Tourist area and Food & Beverage destination, where there is a steady increase in concepts, including Trendy and Lifestyle. €60/sqm
Aliados Main street in the historic centre lined with elegant buildings. Despite not presenting a consolidated offer, several redevelopments are currently underway and this axis is expected to emerge as the Luxury & Premium destination in Porto. €72.50/sqm

 

Lisbon High Street Retail

Lisbon high street retail take up has being dominated by the food and beverage (F&B) sector, folowed by fashion and accessories but not on the same scale. Throughout 2024, Lisbon saw a significant increase in retail openings compared to the previous year, indicating strong demand in the high street retail sector. Folowing the take up trend, F&B dominated the scene, accounting for the majority of new openings.

Lisbon High Street Retail Take-Up

Source: CBRE Research

Rua Garrett is not only the prime street in Lisbon but also in Portugal, historically presenting the highest rent levels. It is followed by Rua Augusta, which has gradually been approaching the rent levels of Rua Garrett. Avenida da Liberdade is the most premium street in Portugal, and its rent levels have increased in recent years. Cais do Sodré has considerably lower rent levels compared to these three, but it has gained traction in recent years, especially in the F&B sector.

 

Lisbon High Street Retail Rents

Source: CBRE Research

 

Porto High Street Retail

Just as in Lisbon, in Porto the Food and Beverage (F&B) sector has dominated total take-up, followed by fashion and accessories. However, in Porto, the fashion and accessories sector is not as surpassed by F&B as it is in Lisbon. Last year (2024) followed this trend, with the F&B sector accounting for the majority of new openings.

 

Porto High Street Retail Take-up

Source: CBRE Researh

High street rent price levels are well categorized, with Santa Catarina presenting the highest ones. Aliados and Clérigos exhibit the same rent level pattern; however, there is a continuously growing divergence between them, so much so that Mouzinho - Flores, which had the lowest rent price levels, has now equalized with Clérigos. There is growing market pressure for rents to continue rising, and the scarcity of available stock is becoming increasingly evident. As a result, some brands are now considering purchasing units rather than leasing them.

Porto High Street Retail Rents

Source: CBRE Research

Logists Market Overview

Logistics

Updated in May 2025

Portugal has a somewhat less structured approach to logistics urban planning, with most logistics facilities being independently developed by private entities. Nonetheless, several municipalities have designated areas for industrial and logistics parks, primarily aimed at light industry and warehousing. Prior to the Covid-19 pandemic, the logistics market was mainly driven by large Portuguese distribution retailers and transport companies, with the latter handling a significant portion of logistics operations due to the limited presence of global logistics firms in the country. 

The Covid-19 pandemic accelerated the growth of e-commerce, and by 2021, Portugal's e-commerce penetration had risen to 7.6% from approximately 5% pre-pandemic, according to Euromonitor. This growth has led to the expansion of established retailers and the anticipated relocation of some logistics operations of international companies to Portugal.

After record years in 2021 and 2022 for logistics occupancy, 2023 saw a slowdown of approximately 20%, driven by a sharp drop in new supply. The limited new logistics space completed in 2023 was quickly occupied, indicating healthy demand in the market. In 2024, several projects were completed, with a significant amount of new space already under construction. New developments such as Ribatejo Plataforma Logística, Benavente Logistics Park, Logicor in Santo Tirso, and the new VGP project in Montijo added substantial stock to the market.

This influx of new developments set the stage for the strong dynamics observed in take-up and rents in both Lisbon and Porto throughout 2024, with total take-up reaching a record high. Rents continued to grow, supported by the introduction of high-quality products in prime areas amidst an overall scenario of scarcity, a trend expected to persist through 2025. The forecasted growth of e-commerce is anticipated to drive further demand for logistics solutions and spaces.

Logistics Gross take-up in Portugal

 

Source: CBRE Research

 

LISBON WAREHOUSE AND LOGISTICS MARKET

The Lisbon warehouse and logistics stock is concentrated in eight zones. The more central zones, namely Lisbon, Sintra-Cascais, CRIL, and Loures-Vialonga, are characterized by the supply of smaller-sized warehouses and frequently mixed-use spaces, which are in demand for last-mile logistics.

The big box logistics stock is concentrated in the four remaining zones, namely Póvoa Sta Iria – Alverca, Carregado - Azambuja, Montijo - Alcochete, and Palmela - Setúbal. The Palmela-Setúbal zone emerged from the installation of the Volkswagen plant (Autoeuropa) at this location in the early 1990s.

The prime logistics axis runs along road N3 in the Carregado – Azambuja zone. These zones comprise a logistics stock of 2.6 million sq m, including stand-alone warehouses and a few logistics parks.

Lisbon Warehouse and Logistics Zones

 

Source: CBRE Research

Lisbon region logistics take-up (gross) increased substantially in 2021, achieving a historic high of 264,000 sq m and largely exceeding the 2016-2020 annual average of 141,000 sq m. Logistics activity remained robust over 2022, with the take-up (gross) reaching 227,200 sq m, which was close to the previous year's level.

In 2024, the logistics take-up in Lisbon reached 295,268 sq m, surpassing the historic high achieved in 2021. Expansion accounted for 66% of this increase, making the Lisbon market represent approximately 69% of the total take-up for the year

Logistics gross take-up in Lisbon

 

Source: CBRE Research

From 2017 to 2024, the logistics market in Lisbon experienced significant growth in both build-to-suit and speculative developments, totaling approximately 681,901 sq m. The years 2021 and 2024 were particularly notable, with substantial increases in build-to-suit developments, recording 70,800 sq m and 133,000 sq m, respectively. Speculative developments also peaked in 2024, reaching 159,695 sq m.

In 2024, several projects were completed, and 2025 accounts for around 400,000 sq m already under construction, approximately 59% of which are speculative projects. New developments such as Ribatejo Plataforma Logística, Benavente Logistics Park, Logicor in Santo Tirso, and the new VGP project in Montijo have added significant stock to the market. This influx of new developments has created a dynamic environment for absorption and rents in Lisbon and Porto, with total absorption reaching a record high of 432,000 sq m, representing a 36% increase compared to 2023.

Logistics developments in Lisbon

Source: CBRE Research

The shortage of logistics assets in Lisbon is visible in the low vacancy rates across various zones in Lisbon. The main logistics corridors exhibit relatively similar vacancy rates and their behavior is quite identical, with Palmela Setúbal standing out for having the highest vacancy rates. At the end of 2024, Palmela Setúbal saw its vacancy rate increase significantly after a decrease throughout 2023.

Logistics Vacancy Rate in Lisbon

Source: CBRE Research

The Lisbon logistics supply´s scarcity is also visible in the rents performance, which has been marked by substantial increases over the last years. Castanheira Azambuja, Sacavém Alverca, and Sintra Norte  exhibit similar rent fluctuation patterns. However, over the past year, the rent levels have diverged. Oeiras Cascais has the highest rent levels, while Palmela Setúbal has the lowest, attributed to its higher vacancy rate.

Prime rent in Lisbon is now at €5.25 per sq m in the Castanheira-Azambuja zone.

Lisbon Logistics Rents

Source: CBRE Research

PORTO WAREHOUSE AND LOGISTICS MARKET

The Greater Porto logistics stock is concentrated in 7 major zones, namely Matosinhos, Airport, Maia, Vila do Conde, Trofa, Alfena and Vila Nova de Gaia. Contrary to Lisbon, in Porto there is a wider spread of logistics warehouses and within mix-use areas.

Porto Warehouse and Logistics Zones

Source: CBRE Research

The logistics stock in Greater Porto currently stands at 1.7 million sq m. Over the past decade, additions to this stock have been exclusively through build-to-suit developments, as observed in 2022. However, we are now observing a resurgence of speculative projects.

On the demand side, take-up in 2021 reached a historic peak of 142,250 sq m, slightly surpassing the previous high of 133,000 sq m recorded in 2017, when Jerónimo Martins occupied 79,000 sq m. In contrast, 2022 saw a lower take-up level, with a total of 63,650 sq m occupied. In 2024, Porto experienced an occupancy of 97,600 sq m, marking a 27% year-over-year increase.

Logistics gross take-up in Porto

 

Source: CBRE Research

During 2024, the total stock added amounted to more than 105,000 sq m of logistic space. These additions, which are relevant in an overall total mapped stock of about 1.7 million sq m of logistics space, bore little to no impact on the total vacancy, which is currently estimated to be situated under 1%. This fact continues to indicate an overall scarcity of logistical space in Porto.

Logistics Developments in Porto

Source: CBRE Research

The rent behavior trend is quite similar, among all different logistics zones. Porto de Leixões Aeroporto is the zone with the highest rent levels, while Porto Este has the lowest. 

Given the scarcity of available spaces for lease, prime rents continue their upward trajectory. The average rent in Greater Porto for Q4 has ascended to €5.50/sq m/month, contrasting with the €4.54/sq m/month recorded during the same period in 2023, reflecting an increase of 21.15%. The regions that present the highest rental values are Airport, Matosinhos, and Perafita. It is anticipated that this upward trend continues to materialize during 2025.

Porto Logistics Rents

Source: CBRE Research

Hotel Market Overview

Hotel

Updated in May 2025

PORTUGUESE HOTEL MARKET

Renowned for its stunning landscapes, rich history, and vibrant culture, Portugal is one of the most captivating tourist destinations in the world. From the picturesque beaches of the Algarve to the historic charm of Lisbon and Porto, visitors are treated to a diverse array of experiences. The coastal regions offer breathtaking views and maritime activities, while the interior boasts charming villages, lush vineyards, and scenic mountains, providing a rich tapestry of experiences for every traveler. This growing appeal has been reflected in Portugal's international recognition as a premier tourist destination, which has grown remarkably throughout the 2010s, with tourism emerging as a pivotal sector of the Portuguese economy. Following a significant 43% increase in the number of overnight stays from 2014 to 2019, reaching a total of 70 million in 2019, the COVID-19 pandemic severely impacted the tourism industry. The number of hotel overnight stays plummeted by 65% year-on-year in 2020, resulting in a 60% decline in the Revenue Per Available Room (RevPAR).

However, the recovery was unexpectedly faster. The year 2023 was remarkable for Portugal's hotel sector, achieving record numbers of guests and overnight stays, driven predominantly by international markets. All regions, except the Algarve, surpassed pre-pandemic levels, with notable growth in the North, Lisbon Metropolitan Area, and the Center. The United Kingdom remained the leading source market, underscoring its significance in the tourism landscape.

Furthermore, the positive trend continued into 2024, with the number of overnight stays in Portugal reaching 48.76 million, an increase of 4% compared to the 2023 figure of 46.8 million. The RevPAR also followed this increase, reaching €80.46 in 2024, an increase of 7.8% compared to 2023.

 

 

Portugal overnight stays and REVPAR

 

Source: INE

 

 

LISBON HOTEL MARKET

Lisbon stands out as a favored city break destination, renowned for its dynamic and fashionable atmosphere among Europe's capitals. The city boasts a diverse array of modern hotels, hostels, and upscale dining options, contributing to its international acclaim. Between 2014 and 2019, Lisbon airport saw a 72% surge in international passengers, while overnight stays increased by over 50%, driven predominantly by foreign visitors, who accounted for 84% of the market.

The COVID-19 pandemic caused a 75% drop in overnight stays in 2020. Recovery began in 2021 but remained 60% below 2019 levels. By 2022, Lisbon's overnight stays were 3% below 2019, but RevPAR exceeded 2019 by over 20%. In 2023 (until November), overnight stays increased by 7% compared to 2022, with RevPAR at €75.76. Additionally, Lisbon gained 20 new hotels, mostly 4-star, adding nearly 2,000 rooms.

Looking into 2024, the number of overnight stays in hotels in the Lisbon Metropolitan Area reached 14.059 million  an increase of 0.19% compared to the 2023 figure of 14.03 million. The RevPAR also followed this increase, reaching €113.84, an increase of 7.5% compared to 2023.

Hotel demand and RevPar in Lisbon

 

Source: INE

PORTO HOTEL MARKET

Porto's tourism sector saw a major boost with the establishment of Ryanair (in 2005) and EasyJet (in 2015) hubs, leading to an 89% increase in international passengers at Francisco Sá Carneiro Airport between 2014 and 2019. This surge was reflected in the accommodation sector, with overnight stays rising by 78% to 4.5 million, driven mainly by foreign visitors from Spain, Brazil, and France.

Final 2024 figures are still under calculation by Turismo de Portugal.

Occupancy rates increased significantly from 2013 to 2017 but stabilized at 60% in 2019. Despite this, RevPAR grew by 5% to €74 in 2019. In 2022, Porto's hotel market recorded 3.7 million overnight stays, surpassing 2019 levels. By November 2023, this figure rose to 4.2 million, a 14% increase from 2022, with RevPAR at €69.9.

In 2023, Porto added over 10 new hotels, mostly 5-star, with nearly 1,000 rooms. In 2024, the number of overnight stays in hotels in the Porto region reached 7,045,006, an increase of 6.48% compared to the 2023 figure of 6,616,051. The RevPAR also followed this increase, reaching €75.7 by November, an increase of 5% compared to 2023. 

ALGARVE HOTEL MARKET

The Algarve is a quintessential tourist destination in Portugal, renowned for its stunning beaches, sunny climate, and world-class golf courses. The region also boasts a rich historical heritage, with monuments dating back to the Moorish era, and a unique cuisine featuring fresh seafood. In recent years, the Algarve has been promoting itself as a year-round destination, offering authentic experiences related to nature, culture, wine, and special events.

Being strongly dependent on foreign tourism, the Algarve region was highly impacted by the COVID-19 outbreak. After a 62% drop in overnight stays in 2020, the Algarve achieved 10.8 million overnight stays in 2021, a 38% year-on-year increase but still about half the demand levels of 2019. In 2022, 7.9 million overnight stays were recorded, 5% below 2019 levels, and in 2023, 20.4 million overnight stays were recorded.

The Algarve observed fair growth in terms of supply, although at a slower pace than demand. In 2021, the region registered 29,698 rooms across 259 hotels and hotel-apartments, primarily located in the central area. In 2022, the Algarve gained 500 new rooms, and in 2023, almost 1,000 rooms. 

The hotel sector in the Algarve benefitted from very positive price performance from 2015 to 2017, stabilizing thereafter. In 2019, the hotel occupancy rate was 64% with a RevPAR of €71. Despite the decline over the past two years, RevPAR has been higher than 2019 since February 2022.

In 2024, the number of overnight stays in hotels in the Algarve region reached 8.49 million , an increase of 0.06% compared to the 2023 figure of 8.48 million. The RevPAR also followed this increase, reaching €96.33, an increase of 7% compared to 2023.

 

Hotel Demand and RevPar in Algarve

Source: INE