Office Market Overview


Updated in July 2022

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.


The office stock in Lisbon is a mix of charming buildings in the city centre and modern properties, mainly in the Expansion Area of the city, in Parque das Nações and in the office parks located in the Western Corridor, on the periphery of Lisbon.

A boost in the residential and tourism market led to the conversion of several office buildings for both these sectors, resulting in a relevant decline in the total office stock, which was fully revised in 2018. The current stock comprises 4.35 million sq m.

The riverfront axis is the new trendy area, attracting a wide range of occupiers, including those traditionally located in the prime CBD, namely law firms, as well as creative industries and technology companies. Notwithstanding, the lack of office supply in this area limits take-up levels.

Lisbon Office Zones

Source: CBRE

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

Annual average take-up over 2015-2019 was 172,000 sq m, comprising around 220 deals/year. The Coronavirus outbreak halted the strong activity that was being observed in the office sector, reflecting in 2020, a 30% year-on-year decline in take-up. Over 2021, companies resume gradually their workplace strategies and take-up showed a recovery from previous year. The first half of 2022 already surpassed the 2021 full year take-up totalling 168,000 sq m. The occupation in the first six months of the year was boosted by the relocation of large size companies to build-to suit developments which accounted to half of the area taken.

Gross Office Take-Up in Lisbon

Source: LPI; CBRE Research

Despite the strong demand verified over pre-pandemic years, the completion of new office buildings was low, as development was targeted at the residential and tourism sector. Only since 2021, a more relevant level of office construction started to be observed. A total of 95,200 sq m were placed in 2021 and other 123,800 sq m are expected to be completed until the end of 2022. There is an interesting pipeline of new projects expected to be completed and of other likely to start construction over the next years.

New office completions in Lisbon

Source: LPI; CBRE Research

Office vacancy in Lisbon reached an all-time low of 5% in 2019. However, it has been increasing slowly over the last quarters standing at an overall 8.9% in the end of June 2022 and 6.4% if we exclude the Western Corridor zone. Around 387,500 sq m are available to let, of which almost half are in buildings located in the Western Corridor.

Rental upsurge has been accentuated, particularly over the years 2018 and 2019, during which prime rental values increased in excess of 10% in all zones. Prime rent reached €25/sq m/month in CBD1 and €23/sq m/month in the Riverfront Axis, in 2019, the maximum value ever recorded in both zones. There were no changes on prime rents over 2020 but in 2021an upsurge was again observed in a few zones and an upward trend is still expected.



The office market in Porto includes not only the city of Porto but also the neighbouring municipalities of Vila Nova de Gaia, Matosinhos and Maia. In Porto city, the office stock is concentrated in the Boavista area, in Downtown and ZEP. Office stock in Porto reaches 1.27 million sq m.

Porto Office Zones

Source: CBRE

The office stock is considerably diverse, comprising modern buildings, the majority located in the CBD Boavista and Vila Nova de Gaia zones, as well as buildings that were converted from former industrial premises. Most of the existing office buildings have small-size office spaces, which do not meet the current demand requirement for large floorplates.

Over the last seven years, the Porto office market has seen a strong upsurge in demand from technology companies and shared services from international companies, which occupy medium and large-size office spaces. Therefore, Porto office market is experiencing a new phase as, in the past, demand was almost exclusively local and for smaller areas.

Effectively, take-up has moved from an annual average of 16,000 sq m in the period 2007-2015, to 56,000 sqm in 2016-2021. In 2020, Porto office take-up saw a y-o-y decrease of 18%, lower than in Lisbon, and in 2021 a 5% increase over the previous year. In the first half of 2022 an interesting demand was recorded, including new companies settling in Porto, boosting office occupation to 30,300 sq m.

Gross Office Take-Up in Porto

Source: PPI; CBRE Research

As was the case in Lisbon, the level of construction of new office spaces in Porto region was low for several years. It was only in 2019, that we stated to observe a higher development activity. Reflecting this increase in the promotion of new developments, a total of 58,500 sq m of new and refurbished office space is expected to be completed in Porto in 2022.

New office completions in Porto

Source: PPI; CBRE Research

Strong dynamics, low offer of adequate office spaces as well as the improvement of the quality of supply, namely with the renovation of buildings, has contributed to an expressive increase in prime rents in all zones. Prime rents reached €18/ sq m/month in the CBD Boavista and €17/ sq m/month in CBD Downtown, reflecting a two-year growth of 29% and 55% respectively at the end of 2019. Since then, rents have been stable.

Retail Market Overview


Updated in July 2022

Shopping centres have been the main retail attraction in Portugal over the last three decades. However, after the economic and financial crisis, strong tourism growth, economy recovery as well as the renovation of several buildings have brought a new life to the dormant historic centres of Lisbon and Porto.

The Portuguese property retail market was growing at a good pace and gradually adapting to online commerce and changes in lifestyle, until Covid-19 outbreak. Private consumption was attaining the highest historic levels and tourism increasing for 10 rolling years.

Despite a fall in 2020, private consumption, already started growing in 2021 and is expected to exceed pre-pandemic levels in 2022. Tourism is also revamping and in mid-2022, the number of overnight stays was very close to 2019.

Since the end of April 2022 all Covid restrictions on retail spaces have been waived with exception to healthcare spaces where the use of mask is still mandatory.

Retail Scheme Format Description Prime Rent
Shopping Centre

100 schemes (> 5,000 sq m)/ 2.8 million sq m GLA.

Consolidated and mature sector with wide offer spread around the country. Landlord activity is gradually revamping from Covid-19 and targeting again the repositioning, rebranding and innovation of existing schemes. A few landlords are again considering expansions. Currently, there are no new projects or expansions underway.

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

€90/sq m/month

Retail Park

42 schemes/ 497 thousand sq m GLA.

Retail parks format were resilient during the pandemic period and maintained a good performance. Several projects are being developed or under licensing.

Recent openings:

  • Alagoa Retail Park (10,500 sq m);
  • Sudoeste Retail Park (14,500 sq m)

Under construction:

  • Estoril Retail Park (8,000 sq m);
  • Lagos Retail Park (12,000 sq m);
  • Retail park at Seixal (12,000 sq m)
  • Pipeline (new and extensions): 7 schemes/ 78,000 sq m
€10.50/sq m/month

5 schemes/ 143,500 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.

€25/sq m/month

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.




  High Street Retail Location Description Prime Rent
Lisbon Avenida da Liberdade Luxury and high-end supply. €120/sq m/month
Rua Garrett in Chiado Most vibrant and trendy retail area providing an eclectic combination of well-known retailers like Inditex group and Hermés. €130/sq m/month
Rua Augusta in Downtown Wider mass-market offer and several F&B units with terraces targeting tourists. €120/sq m/month
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.
€70/sq m/month
Clérigos Tourist area with heavy pedestrian traffic, becoming firmly established, combines mass-market fashion and accessories with catering.  The Marques Soares local department store and the open-air gallery, Passeio dos Clérigos, where premium fashion concepts prevail, can also be find in this area. €50/sq m/month
Mouzinho-Flores Tourist area and Food & Beverage destination, where there is a steady increase in concepts, including Trendy and Lifestyle. €45/sq m/month
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. €55/sq m/month

In shopping centres, 2021 still presented a 2.5% y-o-y decrease in footfall, and 37% down from 2019, according to ShopperTrak. Full recovery to pre-covid performance is already very close with accumulated footfall from January to June standing 15% below the same period in 2019. Effectively, we are observing a return on retailers confidence and several brands willing to expand in shopping centres.

Retail Parks were less punished during the pandemic due to their convenience, greater safety, comfort and tenant mix. Therefore, we are observing strong interest in the development of new retail parks.

In high street, retail activity also showed a gradual recovery, particularly in the second half of 2021 when tourism revamped. A good pace of store openings was recorded both in Lisbon and Porto high street retail zones over the first half of 2022, with the Food and Beverage sector remaining the most active.

Retail Stock Addition

Source: CBRE Research

Logists Market Overview


Updated in July 2022

There is no structured urban plan for the logistics market in Portugal. The majority of logistics premises have been developed independently by private developers. However, several municipalities have established allotments for industrial and logistics parks, mainly targeted at the light industry and warehousing.

Previously to covid, the logistics market was principally driven by major Portuguese large distribution retailers as well as transport companies, the latter undertaking a relevant share of logistics operation, as only a few number of worldwide logistics companies were present in the country. Effectively, a low e-commerce penetration and the proximity between Portugal and Spain placed Portugal as an extension in the logistics chain established in the neighbouring country.

The Covid-19 pandemic has accelerated e-commerce growth and in 2021 Portugal achieved a 7.6% penetration from approximately 5% before covid, according to Euromonitor. We are already seeing the expansion of established retailers and expect to see the transfer to Portugal of a few logistics processes of international companies.

The logistics market saw a boost in 2021. A total of 448,000 sqm of logistic space was occupied, far above the annual average of 220,000 sq m observed between 2016-2020 and the highest level ever recorded in Portugal. Build-to-suit developments and pre-lets accounted for 75% of the area occupied.

Logistics activity as slowed down over the first half of 2022, recording 167,500 sq m (-25% y-o-y), although still above the previous years’ levels and registering a wider spread across the country. Deals were completed in Lisbon and Porto, as well as in the Centre and Algarve regions.

Logistics activity is being driven by e-commerce growth, corporate reorganizations, expansion of safety stocks and industrial reshoring strategies.

The almost non-existent speculative development over the last decade, has placed vacancy rates at historic low levels. The availability of spaces to lease is very short and take-up has been marked by build-to suit developments.

Logistics Gross take-up in Portugal




The Lisbon warehouse and logistics stock is concentrated in eight zones. The more central zones, namely Lisbon, Sintra-Cascais, CRIL and Loures-Vialonga are characterised by the supply of smaller sized warehouses and frequently of mix-use spaces, and are those demanded for the 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. Palmela-Setúbal zone emerged from the installation of the Volkswagen plant (Autoeuropa) at this location in the early 1990’s. The prime logistics axis runs along road N3 at Carregado – Azambuja zone. These zones comprise a logistics stock of 2.5 million sq m, including stand-alone warehouses but also a few logistics parks.

Lisbon Warehouse and Logistics Zones

Source: CBRE

Lisbon region logistics take-up skyrocketed in 2021 achieving a historic high of 264,000 sq m and largely exceeding the 2016-2020 annual average of 141,000 sq m. Although take-up has been leveraged by Sonae’s 80,500 sq m pre-let deal in Aquila’s Azambuja Green Logistics Park in the last quarter of 2021, a record high would still be reached, if this deal was not completed. Logistics activity recorded a slowdown in the first half of 2022 when compared to the previous year. Take-up was 68,000 sq m (-39%y-o-y), although still aligned with the years before.

Logistics gross take-up in Lisbon

Source: CBRE Research

Take-up reflects the scarcity of spaces to let. Effectively, although development has risen from subdued levels, only 54,000 sq m were available in the end of June and vacancy rate remains decreasing, standing at 2.2% (less 2.2 percentage points yoy). An extraordinary area of 152,000 sq m logistics spaces was completed in 2021 and 187,000 sq m should be completed in 2022, almost all already let. One speculative building is currently under construction (14,000 sq m) and other is under renovation (8,200 sq m), both in Póvoa Sta. Iria – Alverca zone, but completions are only expected for 2023. This will continue to drive declines in the vacancy rate and an upward pressure on rents.

Prime rent have already increased in several zones during the first half of 2022. Notwithstanding Big-Box (Carregado – Azambuja) and Last-mile logistics remain at €4.00/sq m/month and 5.50/sq m/month respectively.

Logistics developments in Lisbon

Source: CBRE Research



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 amounts to 1.1 million sq m. Additions to the stock over the last 10 years have been comprised exclusively by build-to-suit developments. However, we are recording again speculative projects. After VGP Park completion in 2021, two other speculative projects are currently under construction and due to be completed until the year end.

On the demand side, take-up has been very uneven. Take-up in 2021 recorded a historic new high of 136,000 sq m, marginally exceeding the previous 133,000 sq m verified in 2017, when Jerónimo Martins occupied 79,000 sq m. Approximately 58,000 sq m were taken in Porto in the first half of 2022. The major contribution to take-up was the construction start of Aldi platform at Santo Tirso (40,000 sq m).

Logistics gross take-up in Porto

Source: CBRE Research

Given the inexistence of spaces available to let, rents have been under upward pressure increasing in all zones. The Big-Box prime logistics rent (Maia zone) increased to €4.25/sq m/month in Q2 2021 (+6% y-o-y).

Logistics Developments in Porto

Source: CBRE Research



Hotel Market Overview



Updated in August 2022

Well-known for its beautiful beaches, sunny days, good quality golf resorts, excellent wine and cuisine as well as cultural heritage, Portugal is currently one of Europe’s leading tourist destinations. Portugal’s international recognition has increased significantly over the 2010s, with tourism performing as one of the key strategic sectors of the Portuguese economy.

Portugal has been awarded the highest tourist distinctions, being elected “Europe’s Leading Destination" by the World Travel Awards between 2017 and 2020, among other prizes. In 2020, Lisbon was also named “World's Leading City Break Destination” while both in 2020 and 2021 Madeira was voted “World's Leading Island Destination” and The Algarve “World's Leading Beach Destination”.

The influx of tourists clearly reflects these recognitions. The number of international passengers in Portuguese airports increased 68% in 5 years between 2014 and 2019 and 8% in 2019.

Tourism accommodation demand has undergone ten years of consecutive growth, reflecting a relevant 43% upsurge in the number of overnight stays from 2014 to 2019, achieving a total 70 million in 2019.

Recording 30% of the total number of overnight stays in 2019, Algarve is the country’s main tourist destination followed by Lisbon which accounts for 26%.

The foreign market registered an average quota of 70% of total overnight stays, from 2015 to 2019. In 2019, the United Kingdom remained the major foreign market, with a 19% share of total international overnight stays. Likewise, Germany, Spain and France also maintained their positions, in second, third and fourth place, with quotas of 12%, 11% and 9% respectively, while the USA recorded an outstanding 20% growth over 2019.

Overnights upsurge has not been followed by hotel supply, where the number of rooms increased only 20% over the same 5-year period, achieving 105 thousand rooms in 2019. However, Local Accommodation (short-term rental) has rapidly developed across the country with the number of beds doubling in two years and exceeding 350 thousand in 2019. Before the Covid-19 outbreak, Local Accommodation was undoubtably a complement to hotel supply, coping with the exponential growth in tourism demand.

The increase in tourism demand was positively reflected in hotel performance. The hotel occupancy rate per room observed a sustainable and robust increase from 2013 to 2017. This upward trend was interrupted in 2018, but recovered in 2019, reaching 67%. Likewise, an upsurge was recorded in prices, reflecting an 82% increase in hotel RevPAR since 2012, reaching €58 in 2019. Nevertheless, the rate of growth of RevPAR has slowed down significantly in the past couple of years, from a double digit rise between 2015 and 2017, to an increase around 2% and 3% in 2018 and 2019 respectively.

The Covid-19 outbreak halted the tourism sector. The number of hotel overnight stays plummeted 65% year-on-year in 2020, leading to a 60% drop in the RevPAR. The extension of travel restrictions in 2021 continued to affect tourism influx and despite a slight recovery in the second half, demand stood 46% below 2019 figures.

Tourism in Portugal is observing a faster recovery than expected. A total 28.5 million overnight stays were recorded in the first half of 2022, reflecting only a 6% decrease over 2019. Inclusively, North, Alentejo and Madeira regions have already surpassed pre-pandemic demand levels with year-on-year increases between 1% and 2%. Interesting to observe that North America has climbed to the 5th most relevant origin market in 2022, from the 7th position in 2019.


Lisbon is a popular city break destination with a reputation for being one of Europe’s most vibrant and trendiest capital cities, offering a good selection of new hotel units, hostels, and high-end restaurants. This reputation has led to several international recognitions such as the “World’s Leading City Break Destination” between 2017 and 2020 by the World Travel Awards.

International passengers at Lisbon airport maintained an upward trend over the past decade, increasing 72% between 2014 and 2019 and 8% year-on-year in 2019.

Tourism accommodation overnight stays increased more than 50% from 2014 to 2019, boosted by international demand which represented 84% of the market in 2019. The main foreign markets in Lisbon are Brazil, USA, and France. Both Brazilian and North American markets saw a relevant increase in the last pre-pandemic years, even surpassing France and Spain which were previously the most relevant markets.

After years of growth, there was a flattening of hotel overnight stays in Lisbon in 2018 reflecting an already high hotel occupancy rate that limits growth in demand as well as a significant increment in Local Accommodation (short term rental) offer. In 2019 the number of overnight stays in Lisbon has grown 5% year-on-year, when considering Local Accommodation offer. In 2019, the hotel occupancy rate per room was 79% and RevPAR €91.

Local Accommodation increased significantly in 2018, partly anticipating the approval of the law that allows the limitation of local accommodation units. At the end of 2019, the number of beds in local accommodation was 73,700 - 1.8 times the number of hotel beds. However, due to covid-19 pandemic many local accommodations were transferred to the conventional residential market causing a 46% decrease on number of beds in 2020.

The beginning of 2020 was showing again an upward trend until the Covid-19 outbreak severely impacted tourism performance. After a 75% breakdown in 2020, Lisbon reached 5.1 million overnight stays in 2021, disclosing a significant recovery, although still standing 60% below 2019 levels.

We are already observing a strong recovery over 2022 with 4.4 million overnight stays in the first five months of the year, only 5% below 2019 levels. Hotel performance already reflects this recovery with a 62% bed occupancy rate and € 96 of RevPAR in April, picking up its pre-pandemic levels.

Although the MICE tourism, so relevant in Lisbon, has not yet been restored, leisure travelling is balancing this decrease.

Hotel demand and RevPar in Lisbon

Source: INE (Instituto Nacional de Estatística)

Regarding supply, the pandemic delayed the inauguration of several hotels. After only five new hotels in 2020, 2021 registered 14 openings which represented 1,600 additional rooms. Three-and four-star hotels accounted for the majority of the new offer, while in the upper-upscale and luxury segments Lisbon welcomed Epic SANA Marquês de Pombal and Eurostars Universal Lisboa in Parque das Nações.

In 2022, it is expected the opening of 11 new hotels adding more than 1,100 rooms to the current supply. Most of these new openings are 5-stars hotels. The first semester of 2022 marked the entrance of new brands in Lisbon such as Hilton’s Curio Collection with the opening of The Emerald House, Accor’s Mama Shelter, Hyatt Regency as well as the launch of Sonae’s Editory Collection with The Editory Riverside Santa Apolónia.

In upcoming years, it is also foreseen the entrance of other international brands in Lisbon such as Hyatt’s Andaz, Yotel and IHG’s Six Senses.


The Porto tourism market gained a boost in 2005 with the establishment of the Ryanair hub in the city airport and later, in 2015, with EasyJet. The city was considered Europe’s Leading City Break Destination by World Travel Awards between 2016 and 2020.

The inflow of tourists has skyrocketed in Porto. International passengers at Francisco Sá Carneiro airport increased 89% between 2014 and 2019, and 13% in 2019 – representing the highest rise in Portuguese airports.

The growth of tourism was likewise reflected in the accommodation activity. Tourism demand has increased consecutively, with the number of overnight stays rising by 78% between 2014 and 2019 when reached 4.5 million. This growth was mainly driven by foreign demand which duplicated in the same period. Spain, Brazil and France were the top inbound markets.

With this tourism growth, occupancy in Porto has also increased at a very interesting pace from 2013 to 2017, rising 13 percentage points within this period. The upward trend was interrupted in 2018, with a slight decrease to a 60% occupancy rate, which remained stable in 2019. At the same time, the RevPAR maintained a growing trend, increasing 5%, to €74, in 2019.

Hotel demand and RevPar in Porto

Source: INE (Instituto Nacional de Estatística)

After a breakdown of 73% in 2020, the number of overnight stays increased by 50% in 2021 reaching 1.8 million. The beginning of 2022 supports this recovery trend with 1.5 million overnight stays recorded between January and May 2022, only 8% below pre-pandemic levels. Inclusively, April and May already surpassed the number of overnight stays recorded in 2019.

In terms of performance, the overall RevPAR (all tourist establishments) in April is already higher than in 2019.

After only five openings in 2020, 12 hotel units were added to Porto supply in 2021 comprising about 850 rooms. The majority of openings were 4-star hotels, accounting for 90% of the total additional rooms. Casa da Companhia from Mercan Group was the only 5-star hotel inaugurated and set the entrance of IHG’s newest luxury and lifestyle brand – Vignette Collection - in Portugal.

New hotel supply comprises 17 hotels in 2022 with 1,170 rooms. The first half of 2022 was already marked by the launch of several hotels. Sonae launched the 5-star The Editory Boulevard Aliados Porto Hotel while Pestana Group launched its 4-star Pestana Douro Riverside. In this first half of the year, Porto had also a reinforcement of international operators with the opening of Four Points by Sheraton Matosinhos, Fontinha Porto Hotel - Trademark Collection by Wyndham and Sé Catedral Hotel Porto Tapestry by Hilton.



The Algarve is Portugal’s premier sun and beach holiday destination, amongst both national and international visitors. It has pleasantly mild winters and abundant summers, and seemingly endless series of golden sandy beaches. In addition, the region serves as a worldwide benchmark golf destination, offering more than 40 golf courses, where over 1 million rounds are played annually. Effectively, Portugal’s recognition as the World’s Best Golf Destination by World Golf Awards for five consecutive years (2014-2018) and Europe Best Golf Destination in 2021 reflects the strong quality of the Algarve golf courses. Furthermore, Algarve has been frequently elected the Best European Beach Destination by World Travel Awards.

Considering that Algarve is a consolidated and well-known resort destination, tourism has not grown at such a high rate as other regions over the last years. Notwithstanding, international passengers in Faro airport increased 47% between 2014 and 2019. In 2019 a total of 4.2 million airport arrivals were recorded, mirroring a 4% year-on-year increase.

Tourism accommodation demand increased 26% in the 2014 - 2019 period, reaching 21 million overnight stays in 2019, of which 13 million were in hotel accommodation.

Tourism accommodation nights in Algarve are mainly driven by international visitors, which represented an average of 77% overnight stays in the region during the past 2015 – 2019 years. The majority were originated from the United Kingdom (40%), followed by Germany (13%) and the Netherlands (9%). Although these three markets have reduced their presence over the past years, increased interest from other countries, such as USA, Brazil, and Italy, has been observed, supporting a wider market diversification.

Being strongly dependent on foreign tourism, the Algarve region was highly impacted by the Covid-19 outbreak. After a 62% breakdown in overnight stays in 2020, Algarve achieved 10.8 million overnight stays in 2021, + 38% y-o-y but still about half the demand levels of 2019. In the first half of 2022, 7.5 overnight stays were recorded, 13% below 2019 levels. In the first five months of 2022, UK, Germany and the Netherlands continued to top the ranking of main markets in the region.

Algarve observed a fair growth in terms of supply, although at a slower pace than the demand. In 2021, the Algarve region registered 29,698 rooms, distributed across 259 hotels and hotel-apartments, primarily located in the region's central area. In 2022, we highlight the opening of two 5-star hotels, Marriot’s W Algarve, during the first half of the year, and Verdelago Resort due to inaugurate in the second half.

The hotel sector in Algarve has benefitted from a very positive price performance from 2015 to 2017, having then stabilized. In 2019, hotel occupancy rate was 64% and RevPAR €71. Despite the fall over the past two years, since February 2022 RevPAR is higher than 2019.

Hotel demand and revpar in algarve

Hotel demand and RevPar in Algarve
Source: INE (Instituto Nacional de Estatística)

Residential Market Overview

Portuguese Residential Market

Portuguese Residential Market

Updated in August 2022

After plummeting during the great financial crisis (GFC) and the Portugal’s economic crisis that followed, the residential market started revamping in 2014, with the renovation of numerous buildings, initially in Lisbon and Porto city centres. The introduction of legal and fiscal changes, such as the reform of the Urban Lease Law and a new Urban Renovation Regime (establishing the reduction of the VAT rate from 23% to 6%), attracted the interest of developers and investors. Simultaneously the Non-Habitual Residents Tax Regime and the Residence Permit for Investment Activity (“Golden Visa”), targeting the European and non-European markets respectively, triggered the rise of a new demand from foreign purchasers. We estimate that the number of houses bought by foreign purchasers has more than double within a decade. The French, the British and the Brazilians comprise the major buyers.

The revamping of the residential development market started with small scale renovation projects, but new greenfield larger schemes are now being built all over the country. Notwithstanding, and despite double digit growth rates over the past four years in the number of new houses completed, construction levels are still low and there is a high unmet demand. An annual average of 76,250 houses were completed in the first decade of the century contrasting with only 13,000 during the second decade.

New Houses in Portugal

Source: INE (Instituto Nacional de Estatística)

Official data from 2021 reveals a growth of 13% in the number of new houses completed and an even more significant increase in number of transactions, 20%, with more than 165,000 houses sold.

We expect the number of homes sold will continue to increase in 2022. However, we may see some softening in the rhythm of sales growth. Not only Coronavirus pandemic has slowed down licensing processes in several municipalities, impacting the availability of new houses for sale; but also, house affordability is more restricted due to higher interest rates and inflation, which is affecting household net incomes.

Houses sold in Portugal

Source: INE (Instituto Nacional de Estatística)

Housing sale prices maintain their growth trajectory

More certain is the maintenance of the upsurge in sales prices. The lack of labour, increase in the cost of energy and construction materials, supply chain disruptions, as well as a persistent delay in urban licensing procedures, will postpone construction works even further and sustain the continued rise in housing sale prices in Portugal. The Housing Price Index shows successive increases since 2014, and in 2021 the rise was around 8%. We predict a similar dynamic for 2022 given its 11% y-o-y increase in the first quarter of the year.

House Price index

Source: INE (Instituto Nacional de Estatística)

Indeed, development is expanding to a growing number of councils (aside from Lisbon and Porto) and, as new product enters the market, we will see prices rise in those locations. Overall, we foresee an increase in the average price in most councils, except for Lisbon, where the supply of prime product is more consolidated and a greater number of projects targeting the medium-high segment are beginning to emerge.

Amendment of the Golden Visa program will jeopardise urban renewal projects in Lisbon and Porto and stimulate growth in specific low population density zones.

The amendment of the Golden Visa program, in force from the beginning of 2022, excludes housing purchases in high population density zones. This will impact particularly urban renewal projects in Lisbon and Porto city centres, causing a reduction in the sales volume and a stabilization, or even decline, in prices.

Conversely, the new Golden Visa regime will stimulate an increase in opportunities to develop projects in specific low population density zones like Comporta, Douro and Alqueva, among others, and the regeneration of historic centres in the country’s inland regions.

Build-to-Rent sector will emerge through affordable housing meeting an increasing awareness regarding Social Sustainability

The Build-to-Rent market is still incipient in Portugal. A very profitable Build-to-Sell market and the lack of conditions, namely in terms of legislation and taxation have been lagging the sector to flourish.

However, in 2021 efforts were made to launch the affordable housing market. Municipalities as Lisbon and Porto have implemented different programs and the first tenders were launched. Nevertheless, the major contribution to stimulate interest in this market comes from the publication, at the end of 2021, of a decree-law establishing the reduction of the VAT rate from 23% to 6% in the construction or redevelopment of affordable housing. Thus, we expect the first projects to be launched.

At the same time, sustainability is a topic that spans all asset classes. In housing, for many years the focus has been on energy certification. We are now seeing in Portugal an interest in environmental certification, namely in rental assets like student residences. However, the pandemic brought to light various social concerns, giving greater emphasis to the “S” in ESG. Therefore, we should observe a greater interest from real estate funds with sustainability criteria to invest in affordable housing projects.

Beyond the build-to-sell market there is a range of living concepts still to emerge and grow. Build to rent, co-living and affordable housing are in very early stages and will soon join the growth path that is currently being witnessed in student and senior accommodation.


The Lisbon Metropolitan Area (LMA) includes the city of Lisbon and the neighbouring councils, comprising a total of 18 councils, divided between the north and the south bank of River Tagus.

Lisbon Metropolitan Area


Lisbon council concentrates more than one fifth of the houses of the metropolitan area (21%), followed by Sintra (12%), and Cascais, Loures and Almada (all with 7%). In the last decade (2011-2021), Seixal and Odivelas saw the highest construction volume (13% of total new homes), followed by Mafra and Lisbon (7%).

New Houses in Lisbon Metropolitan Area

Source: INE (Instituto Nacional de Estatística)

Units Sold in Lisbon Metropolitan Area

Source: INE (Instituto Nacional de Estatística)

In recent years, Lisbon Metropolitan Area has observed an increase of new houses but still far from the levels of completed dwellings registered before the great financial crisis (GFC). In 2021, Seixal was the council with the highest number of completed dwelling in new construction, representing 15% of new houses in LMA, followed by Lisbon accounting for 10%.

Between 2013 and 2019, the number of houses sold in LMA more than doubled, disclosing a new dynamic after the great financial crisis period. There was a stabilisation in 2019, followed by a 16% decrease in 2020 mainly caused by Covid-19 pandemic. Nevertheless, this context has not changed the demand for houses, as sales returned to pre-pandemic levels in 2021, exceeding 51,000 units.

This level of demand is expected to remain stable or even increase in 2022 as in the first quarter of the year, the number of houses sold has risen 22% compared to the homologous period.

Sales prices have been escalating in all LMA councils. Lisbon, Cascais and Oeiras record the most expensive houses while Alcochete and Palmela were the councils that observed the highest price upsurge over the last three years. In fact, Alcochete registered a noteworthy increase (31%) on its sales price mainly driven by new developments.

Despite pandemic crisis, prices continued to grow over 2020 and 2021. Lisbon Metropolitan Area registered a 10% y-o-y increase of median sales price in 2021 and a 13% y-o-y increase in the first quarter of 2022.

Lisbon City Residential Zones

Lisbon City Residential Zones


Lisbon city has 24 parishes. Lapa and Restelo are traditionally the wealthiest neighbourhoods in Lisbon city, with an image of great prestige and “social status”. Chiado, Príncipe Real and Avenida da Liberdade gained importance with their landscape views and glamorous buildings, and are highly sought after by foreign buyers, becoming the most expensive areas in the city.

In the 2021 Census, Lisbon city recorded a total of 320 thousand homes. Similarly, to what was observed in the country in general, Lisbon city development activity was weak over the last decade which results in a home stock decrease of 2% between 2011 and 2021.

The number of new houses concluded per year in Lisbon decreased, from an historical maximum of 2,900 in 2003 to only around 47 units in 2016. The recovery of the residential construction sector initiated in 2014 however, was mainly focused on renovation and refurbishment projects - usually small scale - in the city centre. Nevertheless, new houses in Lisbon have been increasing since 2019 and registered a boost in 2021 when the number of completed dwellings in new construction more than doubled to 502 homes.

Effectively, development is being targeted at the acquisition of land plots outside of the historic city centre for greenfield projects and large size projects were already completed.

On the demand side, Lisbon recorded an increase in the sale of homes early in the century. The number of transactions reduced from a maximum of 15,700 in 2006 to less than 6,000 in 2012. An upsurge in the volume of sales was observed since the end of 2013. However, after a 5-year growth, the number of houses sold in Lisbon fell in 2018, 2019, and 2020, clearly mirroring the lack of supply. However, 2021 and 2022 are already observing an upsurge. Over the last 12 months (up to June 2022) approximately 12,000 houses were sold.

Effectively, there is a general scarcity of supply targeting the national demand due to unaffordable prices, house size and locations, driving demand to the outskirts of the city and nearby councils.

It is therefore not surprising that prices have more than doubled over the past five years. Despite the pandemic, median sales price in the city for new houses increased 11% in the last three years achieving 4,715€/sq m in 2021. In 2022, prices are expected to keep this upward trend given a 16% y-oy increase of the median sales price in the first quarter of the year.

The most expensive zones in Lisbon are Avenida da Liberdade, Príncipe Real and Chiado with amazing river views, recording average prices exceeding €7,500/sqm for new houses.



Porto Metropolitan Area (PMA) includes the city of Porto and the neighbouring councils, comprising a total of 17 councils, divided between the north and the south bank of Douro River.

Porto and Vila Nova de Gaia (“Gaia”) combined concentrate more than one third of the houses of the metropolitan area (17% each), followed by Matosinhos (10%) and Gondomar (9%).

In recent years, Porto Metropolitan Area has observed an increase of new houses but still far from the levels of completed dwellings registered before the great financial crisis. In the last decade (2011-2021), Porto and Gaia also registered the highest construction volume – each representing 17% of total new homes - followed by Santa Maria da Feira (9%) and Matosinhos (8%).

Between 2013 and 2019, the number of houses sold in PMA more than doubled, disclosing a new dynamic after the great financial crisis period. At this point, there was a stabilisation, followed by a 11% decrease in 2020 mainly caused by Covid-19. Nevertheless, this context has not changed the demand for houses to buy as figures from 2021 already exceed pre-pandemic levels, recording approximately 27,000 houses sold.

This level of demand is expected to remain stable or even increase in 2022 since in the first quarter, a 17% year-on-year upsurge was observed in the number of houses sold.

Sales prices have been escalating in all LMA councils. Porto and Matosinhos record the most expensive houses while Gondomar and Valongo were the councils that observed the highest price growths over the last three years. However, Espinho and Trofa account for the highest increases when bearing new houses median sales value for the same period.

Despite pandemic crisis, prices continued to grow over 2020 and 2021. Porto Metropolitan Area registered median sales price increases y-o-y, of 10% in 2021 and 12% in the first quarter of 2022.

New Houses in Porto Metropolitan Area

Source: INE (Instituto Nacional de Estatística)




Houses Sold in Porto Metropolitan Area

Source: INE (Instituto Nacional de Estatística)





Porto City Residential Zones


Porto city has 7 parishes. The parish of Aldoar, Foz and Nevogilde, comprises the wealthiest neighbourhoods in Porto along the sea front, while recent developments have been targeted at the Historic Centre and Riverfront Area.

Porto recorded a strong level of construction growth in the beginning of the century. However, according to the last Census, there were 133 thousand homes in Porto in 2021 reflecting a decrease of 3% in the last decade. New completions plummeted between 2011 and 2016, although a new dynamic has been observed since 2018 with new supply in 2020 and 2021 almost triplicating the previous years values (approximately 900 unit in 2021, but still far from levels of new houses of the beginning of the century that surpassed 1,000 houses per year.

Similar to Lisbon, in 2017 we began to witness the sale of large plots for development in other councils of Metropolitan Area which combined with the lack of new developments until 2018 may explain this downward trend.

New Houses in Porto City

Source: INE (Instituto Nacional de Estatística)

Regarding sales, there was a fall from 7,000 homes in 2000 to 3,000 in 2012. Increase initiated in 2013 with high growths recorded since 2015, achieving 6,800 units sold in 2018, but a decrease was observed in 2020. Notwithstanding, and, similarly to Lisbon, a significant percentage of these sales are not intended for permanent housing, reflecting a high imbalance between supply and demand.

Housing prices have seen a considerable increase (23%) between 2019 and 2021, achieving a median sales value €2,278/sqm and €2,332/sqm in the first quarter of 2022. Median sales price for new houses has also been registering an upward trend to €2,800/sqm in the first quarter of the year.

Foz is the most expensive neighbourhood recording a median sales price of above €3,600/sqm and €5,235/sqm for new houses. However, the highest value growth has been observed in the Campanhã parish.

Residential Rental Market

Updated in August 2022

The Private Rented Sector in Portugal is still immature. In the first part of this century the size of the rental sector was in decline. This was the result of a strong stimulus towards home ownership, provided by tax incentives, low interest rates and high loan-to-value ratios. This was coupled with a long period of strict rent controls. Nevertheless, profound changes in the lease law in 2012 and a strong growth in house prices, has reversed this trend. By 2019, PRS had grown to 26% of households, up from 20% in 2011. We expect this trend to be maintained as several macro trends such as growing flexibility and mobility, age of marriage and first childbirth, scarcity of affordable housing, amongst other, are impacting the way that people live.

There is not yet a multifamily housing (MFH) investment market in Portugal, although a few large size residential portfolios have been sold, since 2017. These include the transactions of Tranquilidade and Fidelidade insurance companies’ portfolios as well as the sale of five residential investment funds (FIIAH), which totalized more than €800 million.



Over the last years, Lisbon city has benefited from urban regeneration. As part of this, several buildings were renovated and sold as high-end apartments. Some were used as short-term rentals with demand from booming tourism. Very few projects have targeted the traditional rental market, driving a significant scarcity of houses available for rent. However, the pandemic led many tourism accommodations to be transferred to the conventional rental housing in Lisbon city what resulted in a 19% increase on number of new rental contracts in 2020 and a 20% increase in 2021. In the last 12 months (up to March 2022), were recorded over 9,900 new rental contracts in the city.

The scarcity of supply has pushed up rents in all the Lisbon Metropolitan Area councils. The overall median rent in LMA increased 47% in the last five years, achieving €8.9/sqm/month in 2021  and €9.1/sqm/month in the first quarter of 2022. The city of Lisbon has the most expensive rents (€12/sqm/month), followed by Cascais (€11.3/sq m/month) and Oeiras with (€10.5/sq m/month) at Q1 2022.

The prospects for MFH are huge as the development rental property has been very low over the past decades. The first large-size projects inaugurated in 2020, in Carcavelos and Lisbon councils, by Smart Studios, are offering a co-living experience. In addition, several affordable rental schemes are expected to be launched.



Similar to Lisbon, there has been large amount of urban regeneration over the past years in Porto, with the renovation of several buildings. However, developers have favored the sales market or tourism accommodation resulting in rental schemes and consequently, pushing up prices.

The median rent value in Porto Metropolitan Area has increased by 47% between 2017 and 2021 to €6.51/sqm/month. This trend has been observed across all councils.

In Porto city, in particular, there was a slight decrease in 2020 caused by a halt in tourism and many short-term rental units being transferred to the private rental however, median rent raised again to €8.85/sqm/month in 2021 and €9.2/sqm/month in the first quarter of 2022.

Porto has a strong potential for the development of the MFH sector, and growth is likely to be faster than in Lisbon as land sites are cheaper and there are municipal programs such as Porto com Sentido being put in place to promote build-to-rent sector.


Residential Tourism

High quality and prestigious projects have been developed in Portugal, the majority anchored on golf courses. Three of the most established and recognised tourism regions are the Algarve and the Lisbon North and South Coasts.

Main Residential Tourism Zones

Source: CBRE


In the Algarve, the so-called Golden Triangle area is home to some of Europe’s most well-known developments: Quinta do Lago, Vale do Lobo, and Vilamoura, the last two still having great potential for expansion.

Following several years with no investment in the region, we are now observing a revival in tourism development with several projects under construction. Top quality real estate can achieve up to €10,000/sq m in new homes.

High dependence on the foreign market was reflected in the highest regional fall in housing sales in 2020, with a decrease of 13% in Algarve.

Lisbon North Coast

Although not yet as consolidated as the Algarve, the Lisbon North Coast is positioning itself as a real estate destination near Lisbon with a number of golf courses anchoring the projects in this region. There are already a few resort developments on the market, namely: Praia d’El Rey, Campo Real, Bom Sucesso, Royal Óbidos and West Cliffs (by Praia d’El Rey). With exception of Bom Sucesso and West Cliffs, all the other resorts include 5-star hotels, some of which are managed by international chains such as Marriot and Dolce. It should be noted that there is a significant percentage of families living all year round in Lisbon Northern Coast resorts, namely in Praia d’El Rey and Campo Real.

Lisbon South Coast

The Lisbon South Coast is located south of Sado River less than an hour’s drive from Lisbon and is almost fully integrated in the Alentejo region. The area features dune-protected and white sandy beaches that span over an astonishing 60km from Troia to Sines. Protected under the Natura 2000 Program, the region is one of the last strips of unspoilt coastline in Europe and certainly one of the continent’s high-end tourism destinations with highest potential for development.

The zone has seven major tourism resorts, namely Troia Resort, Pestana Troia Eco-Resort & Residences, Herdade da Comporta, Pinheirinho Golf & Beach Resort, Muda Reserve, Club Med and Costa Terra. In addition, there are several other smaller high-quality projects including Sublime, Melides Art, Comporta Retreat, amongst others, which clearly elevate the standard of this destination. These projects are in different phases of development and those that are already under marketing reach values between €4,500 and €5,500/sq m. Future pipeline includes a further 4,000 residential units located throughout the region; some of which will be positioned at a price well above the current values.

The Covid-19 pandemic boosted the domestic second home market and the Lisbon South Coast was one of the most sought after locations. Alentejo was the only region in Portugal to record an increase in housing sales, of 5%, in 2020.

Student Housing Market Overview

Student Housing

Updated in August 2022

In an increasingly globalised world, studying abroad is becoming more common place. Portugal, with several universities recognised in the top 500 international rankings, lower tuition and accommodation costs, and a high quality of life, is well-positioned to attract international students.

Over the last few years, the number of international students has been growing, mitigating a stabilisation in domestic students. The inflow of international students doubled between 2014 and 2019 displaying an average annual growth of 16%. This growth resulted in 60,679 international students registered in Portuguese universities in 2019 - accounting for 15% of total university students.

In 2020, there was a downfall of 9% on international students due to the pandemic crisis, mainly driven by the reduction of students enrolled in credit regimes such as Erasmus (-51% y-o-y) which normally stay for a semester. In fact, despite the general decrease of international students, the number of students enrolled in degree regimes continued to grow in the academic year 2020/2021 (+7% y-o-y). In 2021/2022 we already notice a strong recovery of international students, not only those enrolled in degree regime but also the Erasmus students, accounting to a 15% increase in the first semester of the academic year.

International students

Source: DGEEC (Direção-Geral de Estatísticas da Educação e Ciência)

Lisbon Region accommodates the highest number of international university students, with a share of 38%, followed by Porto, with 19% and Coimbra with 8%.

The upsurge of international students has resulted in an increase in the number and quality of student accommodation supply, formerly comprised of private rented apartments and accommodation provided by universities and religious institutions.

Specialist purpose-built student accommodation (PBSA) in Portugal is a growing market, with demand still outstripping supply. The first specialist purpose-built student residence, operated by an international brand, opened in Lisbon early in 2018 and the number of beds in PBSA has more than tripled since then. Several foreign operators have entered the market (such as Xior, Milestone, Valeo, Odalys, Livensa Living, amongst others) and others are looking for opportunities. At the end of 2021, there was a total of 33 PBSA schemes totalling about 57,000 beds and an additional 3,759 should be available at the end of 2022. Most schemes can be found in Lisbon and Porto.

PBSA stock addition

Source: CBRE Research

Prices in the existing Specialist PBSA are on average €600-€700/month for an individual studio (with a bathroom and kitchenette) in Lisbon and €500-€600/month in Porto.

Investment in PBSA has started with the construction of new development and forward purchase transactions. A few portfolios of a mix of existing and planned schemes were already transacted including the Portuguese portfolios of U.Hub by Xior and recently Smart Studios by Round Hill Capital, this one including a blend of student accommodation and co-living.