Retail Market Overview

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

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.

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

High Street Retail

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.

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

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

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

Logists Market Overview

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.

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 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

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

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.

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

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.

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.

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.

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

Hotel Market Overview

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.

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.

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.