Investment Market Overview

Updated in March 2023

High global liquidity, together with a wealthy economic growth and the strong fundamentals observed in the Portuguese real estate markets, have shifted property investment to a new level after the financial and economic crisis, more than duplicating the previous peak volumes.


Source: CBRE Research

The strong investment activity observed since 2015 has particularly targeted the office and shopping centre sectors, although the interest has diversified to other asset classes.

Effectively, greater risk acceptance has attracted the interest from various investors to other operational assets, such as hotels, student housing and healthcare.

The first PBSA projects started to be developed in Portugal in 2016 and therefore, first transactions were predominately forward purchase deals. Later, portfolio transactions including assets under operation and projects to be developed were completed. The transaction of large residential portfolios has also boosted the capital inflow to this asset class, where the multifamily/ build-to-rent market is still embryonic.

A slowdown in investment activity was observed during 2020 and 2021 Covid-19 pandemic years, particularly in retail.

Capital inflow to commercial property totaled nearly €3,300 million in 2022, a c. 50% increase year-on-year. The office sector remained resilient and logistics and hotel sectors have outperformed. Logistics has finally kicked off with several portfolio transactions, and hotels have also reached a record high inflow mainly leveraged by Crow portfolio.

Yields have compressed since 2013 in all sectors, achieving historic record lows in 2019. The Covid-19 pandemic drove an upsurge in hotels and retail prime yields, while logistics continued recording a downward trend.

With the hike in interest rates observed over 2022, prime yields across all asset classes started rising after the Summer. In March 2023, prime yields have already increased between 25% and 75% year-on-year in all asset classes. Further increases are still expected over the year.

Prime yields in the main property asset classes

Source: CBRE Research, December 2022