Office Market Overview


The office market in Portugal is mainly concentrated in Lisbon, although Porto has been showing strong dynamics over the last four years. We are observing an increasing activity from international companies in the relocation of their outsourcing services to Portugal, not only to Lisbon and Porto, but also to other cities in the country.


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 from 4.7 million sq m to a current 4.3 million sq m.

The riverfront axis has recently emerged as 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 is limiting take-up levels, which could be much higher.

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 and contact centres from foreign companies, as well as by an increasing growth from technology companies.

Take-up over the last five-year period, 2015-2019, was equal to an annual average of 172,000 sq m, comprising around 220 deals. At the beginning of 2020, demand for office spaces was extremely high, resulting in about 300,000 sq m of procurement. The first three months of 2020 recorded the highest Q1 take-up in Lisbon in this decade. Q2 2020 already reflected a decrease in Lisbon office demand driven by the Coronavirus outbreak, although the impact was not so strong due to the completion of a couple of major deals. Take-up was 40,500 sq m in Q2, 17% lower than the average quarterly take-up in 2019, but around half the number of deals, leading to a 84,500 sq m take-up in the first half of the year. There are currently a number of new leads, including from shared services of international companies, but requests are lower than before the pandemic. At the same time, a well succeeded remote working experience and the need to minimize uncertainty is driving a number of companies to halt their expansion plans and, inclusively, a few are reducing office areas. Therefore, we expect take-up to decrease in 2020 to a 150,000 sq m range, around 20% below that recorded in the previous year.

Gross Office Take-Up in Lisbon

Source: LPI; CBRE Research

Notwithstanding the strong demand verified over the past years, the completion of new office buildings was low, as development was targeted at the residential and tourism sector. Inclusively, office buildings continue to be withdrawn from the stock with a consequent reduction in total supply.

In 2020, a relevant 60,000 sq m are expected to be completed, registering a record high new completions level over the last decade, but half this area is already committed. It is estimated that only in 2021 a more significant offer, of approximate 110,000 sq m, will be placed on the market.

New office completions in Lisbon

Source: LPI; CBRE Research

Vacancy in the Lisbon office market was at an all-time low at the end of 2019. Only 220,000 sq m were available to let, of which half were in buildings located in the Western Corridor. Vacancy rate has slightly increased over the first half of 2020, standing at an overall 6.3% at the end of June, and at 4% only if we exclude the Western Corridor zone.

Rental upsurge has been accentuated, particularly over the last couple of years, 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. Despite the pandemic, we have not seen yet evidences of rent reduction, although we expect rents on prime asset to be more resilient than on secondary assets. An expected increase in the vacancy rate over the next quarters, is more likely to drive landlords to provide incentives to tenants, such as rent-free periods or fit-out co-payment, rather than changes in the headline rent.


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. CBRE estimates an office stock in Porto of 1.2 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, mix-use buildings and more recently warehouses that have been 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 four years, the Porto office market has been showing a strong upsurge in demand from technology companies and attracting several outsourcing activities from international companies shared services and contact centres), which have been contributing to the occupation of medium and large-size office spaces. The Porto office market is experiencing a new phase as, in the past, demand was almost exclusively local and for smaller areas (100 sq m on average).

Effectively, from 2007 to 2015, the average annual take-up in Porto was merely 16,000 sq m, having increased significantly from 2016 onwards with an annual average take-up in the years 2016-2019 equal to 53,000 sq m. Despite the Coronavirus outbreak, take-up achieved 28,000 sq m in the first half of 2020, similar to that recorded over the same period in the previous year. However, the number of deals was a much lower. As observed in Lisbon, the number of new leads has decreased and, although there are a few contracts for larger areas under negotiation, in 2020 take-up is likely to register a 30% decrease over the previous year.

Gross Office Take-Up in Porto

Source: PPI; CBRE Research

As was the case in Lisbon, the level of development of new office spaces was low over the past years. It was only in 2019, that a relevant 57,100 sq m were completed and a further 57,600 sq m are expected in 2020, of which circa 60% are already committed.

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 are currently at €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. Nevertheless, due to the Covid-19 pandemic, we are likely to see an increase in the vacancy rate and rents under pressure across all zones over the next quarters.

Retail Market Overview


The Portuguese property retail market was growing at a good pace and gradually adapting to online commerce and changes in lifestyle.

Shopping centres have been the main retail attraction in Portugal, although Lisbon and Porto high street retail have flourished over the past years due to strong tourism growth, economy recovery as well as the renovation of several buildings in the city centres.

Before the Covid-19 outbreak, private consumption was attaining the highest historic levels and tourism increasing for 10 rolling years.

Following the Covid-19 pandemic, not only international travelling was suspended but non-essential retail had to close during seven weeks. Retail gradually reopened over May and June, according to shop activity and size. The lockdown had a dramatic impact on retail sales, where online penetration was still very low (circa 5% in Portugal). Retail trade sales recorded a 13.6% year-on-year fall in the second quarter of 2020, with a shaper decrease of 23% in non-food retail; nevertheless, June already recorded a reduction of only 6.6%.

The Covid-19 pandemic is expected to significantly change consumer preferences and behaviours, and, subsequently, retail operator strategies and properties.

Shopping centres and high street retail were the most affected formats. Shopping centre footfall has been gradually increasing since the beginning of June, when centres were allowed to reopen. However, in the first seven months of the year footfall decreased 38% year-on-year and in July were still recording 31.5% fall. Shopping centre owners were particularly affected, as not only consumption declined, but also shopping centre tenants were exempted from paying the fixed monthly rent until the end of 2020, as determined by the Portuguese Parliament.

Prime high street retail will start recovering as tourism starts revamping. Nevertheless, several units are likely to close, namely in the food and beverage sector, and vacancy will increase as new renovated buildings are being completed, which will pressure rental values downwards.

Retail Stock Addition

Source: CBRE Research

Logists Market Overview


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.

The logistics market has been 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 operators are present in the country and usually have a small footprint.

Portugal still has a low e-commerce penetration of 5% and, therefore, there are few dedicated logistics structures. At the same time, the proximity between Portugal and Spain has placed Portugal as an extension in the logistics chain established in the neighbouring country, namely in e-commerce logistics, waiving the need for dedicated structures in Portugal. The Covid-19 pandemic has accelerated e-commerce growth and is expected to result not only in the expansion of the area occupied by already established companies but also by the transfer to Portugal of a few logistics processes of international companies. Therefore, locations close to the major urban centres are likely to reflect the highest demand.

Indeed, logistics has been seen globally as the sector that will most benefit from the Covid-19 crisis, and it is expected to witness a boost in Portugal.


The Lisbon warehouse and logistics sector is distributed into 6 zones, as identified on the map. The more central zones, namely Lisbon City (Zone 4), Sintra-Cascais (Zone 3) and Loures-Vialonga (Zone 2) are characterised by the supply of smaller sized warehouses and frequently of mix-use spaces. The logistics stock is concentrated in the three remaining zones, namely Alverca - Azambuja (Zone 1, which includes two sub-zones), Montijo - Alcochete (Zone 5) and Palmela - Setúbal (Zone 6). 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 between Vila Nova da Rainha and Azambuja (within sub-zone 1.B). These three logistics zones comprise a stock of 2.4 million sq m, comprised by stand-alone warehouses but also a few logistics parks.

Lisbon Warehouse and Logistics Zones

Source: CBRE

The annual average gross take-up level of logistics over the last 5 years in Greater Lisbon was 130,000 sq m. Logistics take-up was 46,000 sq m in the first half of 2020, similar to that observed in the same period of the last two years. However, about 75% of this area results from build-to-suit development, since the current availability of logistics warehouses for rent is reduced.

Logistics Gross Take-up in Lisbon

Source: CBRE Research

Effectively, take-up in Greater Lisbon has been constrained by the lack of new premises. From 2012 onwards, the new supply of warehouse and logistics spaces was driven by built-to-suit schemes and it was only in 2017 that a new 9,300 sq m speculative development in Alverca came to the market.

Recently, speculative development has finally started to respond and 90,000 sq m are currently under construction. An additional 85,000 sq m of built-to-suit developments are also ongoing. However, supply will remain low over 2020.

Logistics completions in Lisbon

Source: CBRE Research

The extremely low level of development led to a gradual reduction in the availability of spaces. Vacancy rate in Greater Lisbon was 5.7% in June 2020, falling from 14% in 2017.

Prime logistics rent has remained stable over H1 2020, standing at €3.75/sq m/month, for the past 18 months.


The Greater Porto logistics is concentrated in 5 major zones, namely Matosinhos, Airport, Maia, Vila Nova de Gaia and Vila do Conde. Contrary to Lisbon, in Porto there is a wider spread of logistics warehouses and within mix-use areas. The majority of the assets were built-to-suit.

Porto Warehouse and Logistics Zones

Source: CBRE Research

The logistics stock in Greater Porto currently amounts to 700,000 sq m. Additions to the stock have been comprised exclusively by build-to-suit developments. With respect to future pipeline, we highlight Leixões Logistic Platform, close to the Matosinhos port, as this is the largest logistics park in Greater Porto with plots for development.

The average gross take-up level of warehouse and logistics in Greater Porto is below 50,000 sq m. Take-up in 2017 has risen considerably, due to the occupation of the build-to -suit 79,000 sq m logistics platform by Jerónimo Martins in Alfena, totalling 133,000 sq m.

Similarly to what was observed in Lisbon, construction works have initiated in a new 30,500 sq m development, named VGP Park Santa Maria da Feira. This is one of the most relevant speculative developments in the Northern region, considering that logistics construction has been driven by build-to-suit projects over the last decade.

As speculative development in Porto has been very reduced, the logistics vacancy rate is residual.

The prime logistics rent in Greater Porto, in the Maia zone, has been quite stable at €3.50/sq m/month.

Hotel Market Overview



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

Portugal has been awarded the highest tourist distinctions, having been elected, in the last three years (2017, 2018 and 2019), the "Best Destination in the World" by the World Travel Awards, together with other tourism prizes.

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

Tourism accommodation demand has undergone ten years of consecutive growth, reflecting a relevant 43% upsurge over the past 5 years in the number of overnight stays, achieving a total 70 million in 2019. The rate of growth has slowed down in the last two years, but still recorded a year-on-year increase of 3% and 4%, in 2018 and 2019 respectively.

Algarve maintains its position as the country’s main tourist destination, recording 30% and 21 million of the total number of overnight stays in 2019. Lisbon retained the second place with a 26% share.

The foreign market registered an average quota of 70% of total overnight stays, from 2015 to 2019. The United Kingdom remains 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 in 2019, and the USA with 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 (207 thousand beds) in 2019. However, Local Accommodation (short-term rental) has rapidly developed across the country. The number of registered beds doubled in two years and at the end of 2019 exceeded 350 thousand, 1.7 times the number of hotel beds. 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 has positively reflected 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%, 16 percentage points above 2012. Likewise, an upsurge was recorded in prices, reflecting a 82% increase in hotel RevPAR, since 2012, to €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 in 2015, 2016 and 2017, to an increase of 3.5% and 2.3% in 2018 and 2019 respectively.

The Covid-19 outbreak halted the tourism sector in the second quarter of 2020. Most air traffic was suspended and although hotel activity continued to be authorised, the majority of the hotels were temporary closed. As a result, the number of hotel overnight stays in the first half of the year, plunged 66% year-on-year, leading a drop in the RevPar of 55% in the same period.


Lisbon is a popular city break destination with a reputation for being one of Europe’s most vibrant, trendy capital cities, offering a good selection of new hotel units, hostels and quality restaurants. This reputation has led the city to be awarded several international tourism prizes such as "Best Destination City" and "Best Destination City Break“ in 2018 and “Europe's Leading City Break Destination” in 2019, from the World Travel Awards.

International passengers at Lisbon airport maintained an upward trend over the past decade, increasing 72% in 5 years and 8% year-on-year in 2019.

Tourism accommodation overnight stays increased more than 50% over the past 5 years, boosted by international demand, which represented, in 2019, 84% of the market. The main foreign tourists in Lisbon are Brazilian, North American and French. Both the Brazilian and North American market saw a relevant increase in the last years, replacing France and Spain which were the most important markets five years ago.

However, demand in hotel accommodation began stabilising in 2018 recording 10.8 million overnight stays in 2019. The flattening of overnight stays in Lisbon reflects, on the one hand, an already high hotel occupancy rate that limits growth in demand and, on the other hand, the significant increment, in recent years, in the alternative offer of Local Accommodation (short term rental). Effectively, in 2019 the number of overnight stays in Lisbon has grown 5% year-on-year, when considering Local Accommodation offer.

Hotel supply increased 19% between 2014 and 2019, achieving 40,200 beds. The presence of international hotel brands is not yet very high, although it is stronger in Lisbon than in other tourism locations in Portugal. Effectively, around 25% of hotel rooms in Lisbon are operated by an international hotel chain. These include Four Seasons, Intercontinental, Starwood, Hilton, Holiday Inn, Mélia, Sofitel, Tryp, Vincci, NH, Radisson and Marriott, amongst others, and a number of other high-profile hotel brands are expected to enter the city or reinforce their presence with multiple brands.

Local Accommodation increased significantly in 2018, partly anticipating the approval, in the summer of that year, of the law that allows the limitation of local accommodation units. The number of registered beds was 73,700 at the end of 2019, 1.8 times the number of hotel beds.

The hotel occupancy rate per room is currently high, having decreased slightly over the past two years, standing at 79.3% in 2019. However, RevPAR has increased 2% to €91 in 2019, maintaining the upsurge observed over the last eight years, although at a slower pace.

The beginning of 2020 was showing a very positive trend with the first two months mirroring a 7% year-on-year growth. The Covid-19 outbreak severely impacted hotel performance and around 80% of hotels in Lisbon have closed temporarily. Therefore, in the first half of the year the number of overnight stays in tourism accommodation dropped 66% year-on-year (-97% in Q2).

Hotel demand and RevPar in Lisbon

Source: ATL (Associação de Turismo de Lisboa)

A relevant number of hotel developments were ongoing and around 1,450 new hotel rooms were expected to be placed on the market in 2020, more than double the openings of 2019. A few hotels were already inaugurated but the launching of the majority of the new units is likely to be postponed, when tourism recovers.


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 the Best European Tourism Destination in 2012, 2014 and 2017.

The inflow of tourists has skyrocketed in Porto. International passengers at Francisco Sá Carneiro airport increased 89% in 5 years and 13% in 2019 (the highest rise in all of the Portuguese airports).

The growth of tourism was likewise reflected in the accommodation activity. Tourism accommodation demand has increased consecutively, with the number of overnight stays rising 78% from 2014 to 2019, to 4.5 million, boosted by foreign demand, which duplicated in the same period.

International tourists represent 83% of the total overnight stays in Porto in 2019, with Spain, France and Brazil standing out as the main origin markets.

The upsurge in hotel supply was much lower than that observed by tourism demand. The number of hotel beds increased 29% in 5 years, to 13,550 in 2019. The offer of Local Accommodation in Porto was comprised by 24,700 beds, with a 1.8 surplus regarding hotel beds.

Hotel demand and RevPar in Porto

Source: INE (Instituto Nacional de Estatística)

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.

Tourism in Porto city was growing strongly in the beginning of 2020, before Coronavirus emerged in the country, showing a 18% year-on-year growth in tourism accommodation overnight stays in the first two months. The first half of the year recorded a 66% decline, in this indicator, over the same period of 2019. Almost 1,000 of new hotel rooms were planned to be placed on the market in 2020, which would double the new 2019 hotel offer. However, a relevant number of these projects are likely only to be inaugurated in 2021.


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 the past five consecutive years, 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 know resort destination, over the last years tourism in the region has not grown at such a high rate as other regions. 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, after a residual decline of 1% in 2018.

Tourism accommodation demand increased 26% over the past 5 years to 21 million overnight stays in 2019, of which 13 million were hotel accommodation. Despite a small decrease in 2018, the region observed a year-on-year growth of 5% in hotel accommodation overnight stays in 2019.

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 5 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 in the past couple of years, increased interest from other countries such as USA, Brazil and Italy has been observed, supporting a wider market diversification.

Total hotel supply in the Algarve observed a fair growth in the number of hotels and rooms, both at a lower pace than the demand. In 2019, the Algarve registered 28,980 rooms, distributed across 276 hotels and hotel-apartments, primarily located in the region's central area.

The hotel sector in Algarve has benefitted from a very positive price performance from 2015 to 2017, having now stabilized. Overall, average room rate increased 38% over the past 5 years to €112 in 2019. Occupancy rate recovered in 2019 to 66%, after a small decline in 2018. As a result, RevPar increased 56% over the past 5 years reaching €71 in 2019.

2020 began at a good pace, recording a year on year 9% increase in overnight stays over the months of January and February. Being strongly dependent on tourism, the Algarve region was highly impacted by the Covid-19 outbreak. In the first half of 2020, Algarve registered a decrease of 73% in overnight stays, over the previous year.

Residential Market Overview

Portuguese Residential Market

Portuguese Residential Market

In the late 1990s and early 2000s Portugal experienced a significant rise in housing stock. Development activity remained strong over the first decade of XXI, but plummeted with the economic and financial crisis and new developments were residual over the last decade. Nevertheless, since 2014, residential development has been mainly observed in the Lisbon and Porto city centres, targeting the renovation of numerous buildings, that were dilapidated and inhabitable, which however, for statistics purposes, do not count as new houses. The introduction of legal and fiscal changes, such as the reform of the Urban Lease Law and a new Urban Renovation Regime, supported the revamping of the residential redevelopment market in Portugal over the past years.

Despite still showing very low levels, new construction has increased above two digits over the past three years, with 14,400 new houses completed in 2019.

New Houses in Portugal

Source: INE (Instituto Nacional de Estatística)

On the demand side, approximately 230,000 houses were sold annually in Portugal at the beginning of the century. This volume decreased significantly during the economic and financial crisis and it was only in 2013 that an upsurge began to be observed. The number of houses sold more than doubled in the past five years, elevating transactions to 181,500 units in 2019, but still below 2007 and prior years. Housing transactions have slowed down significantly over 2019, when growth rate was only 2%, compared with increases above 15% in the previous four years.

The recovery of the residential market demand after the economic and financial crisis was highly driven by foreign investors, mainly as a result of two new laws: the Non-Habitual Residents Tax Regime and the Residence Permit for Investment Activity (“Golden Visa”), targeting the European and non-European markets respectively. Foreign investors are responsible for around 10% of residential units sold, with the French, the British and the Brazilians comprising the major buyers. Furthermore, demand from private investors has also been relevant, as the property market is seen as a low risk alternative with an interesting return (comparing to the low bank interest rates), leveraged by the strong tourism growth observed over the last years.

Houses sold in Portugal

Source: INE (Instituto Nacional de Estatística)

Nevertheless, despite sustained economic and employment growth, as well as more competitive mortgage conditions, the domestic market sales are still low, and this situation is reflected in the concession of mortgage loans, which in 2019 where slightly higher than half the volume of 2007.

New Loans granted

Source: Bank of Portugal

The inertia of the domestic market reflects the high prices of homes, unfordable to the majority of the Portuguese population.

Housing prices fell continuously from 2010 until 2013, with an accumulated drop of 13%. Since then, prices have been rising, having already increased more than 45% and recording an annual change of 10% in 2019.

The impact of the Covid-19 outbreak on housing sales was residual in the first quarter, recording a decrease lower than 1% year-on-year, as lockdown was only imposed in mid-March. Prices have also increased by 5% in that period. The second quarter of 2020 already recorded a 23% fall on transactions, but prices remained resilient, quarter on quarter.


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 (22%), followed by Sintra (12%), and Cascais and Almada (both with a 7% quota). In the 2000-2009 period, Sintra saw the highest construction volume (13% of total new homes), followed by Loures and Mafra (both 8%) and Lisbon (7%). Over the last couple of years new completions were higher in Seixal and Odivelas.

New Houses in Lisbon Metropolitan Area

Source: Instituto Nacional de Estatística (INE)

Units Sold in Lisbon Metropolitan Area

Source: Instituto Nacional de Estatística (INE)

After increasing since 2013, the number of houses sold in LMA stabilised in 2019.

Sales prices have been escalating in all LMA councils. Lisbon, Cascais and Oeiras record the most expensive houses while Amadora, Oeiras and Odivelas were the councils that observed the highest price upsurge over the last three years.

Housing sales have remained stable, year on year, in LMA during the first quarter of 2020 while prices continued to grow, registering a 4% increase in the median prices over the quarter. The second quarter already reflected a fall on sale transactions.

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 2011 Census, Lisbon city recorded a total of 324 thousand homes. Contrary to what was observed in the country in general, Lisbon city development activity was weak over the first decade of the century, with a stock increase of only 2% inter census (2001-2011).

The number of new houses concluded per year in Lisbon decreased, from an historical maximum of 2,900 in 2003 to only around 130 units in 2015. The recovery of the residential construction sector initiated in 2014, focused on renovation and refurbishment projects, usually small scale, in the city centre. Only 199 new houses were completed in 2019 but this figure is expected to grow more significantly over the coming years. Effectively, development is being targeted at the acquisition of land plots outside of the historic city centre for greenfield projects and the construction of the first large size projects has initiated.

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, in 2018 the number of houses sold in Lisbon fell to around 12,200 units and is expected to have decreased further in 2019, clearly mirroring the lack of supply. In addition, it is important to bear in mind that, a significant percentage of residential sales were not intended for permanent housing in the domestic market, as the figures include the transaction of several buildings for redevelopment and others that were placed in the tourism marker under the Local Accommodation regime.

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. The first three months of 2020 were again reflecting an increase of 3% compared to Q4 2019, achieving a median sales value of 3,350/sq m. The most expensive zones in Lisbon are Avenida da Liberdade, Príncipe Real and Chiado, with amazing river views, recording median prices above €5,000/ sq m.


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 City Residential Zones

Porto recorded a strong level of construction growth in the beginning of the century. According to the Census, there were 138 thousand homes in 2011, reflecting a relevant rise of 10% from 2001. New completion plummeted since 2011 and despite a relevant increase in 2018, new developments still stand at low historic levels. As is the case in Lisbon, in 2017 we began to witness the sale of large plots for development and the number of new houses in Porto city is expected to increase faster over the next years.

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. 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 saw a strong increase of 72% over the last three years, achieving a median sales value of €1,900/ sq m in Q1 2020. Foz is the most expensive neighbourhood recording a median price of €2,600/sq m, although the highest value growth has been observed in the historic centre.

Residential Rental Market

The residential lease market is still a rather immature sector in Portugal and with the consequent impact on the so-called Private Rented Sector (PRS), namely when considering houses owned by organisations and institutional investors.

Housing rental has been a secondary option over the years, not only because of the legal framework that constrained the market for several decades, but also due to the strong stimulus towards home ownership provided by tax incentives, low mortgage rates and high loan-to-value ratios. According to the last Census, only 20% of the houses in Portugal were rented.

However, changes in the lease law and, recently, more restricted mortgage conditions have turned the rental market into an interesting option. At the same time, there are economic and social drivers, such as a much higher mobility in employment and student markets, and relevant lifestyle changes.

The rental market is likely to be largely triggered by the millennial generation and a growing number of foreigners working and studying in Portugal. Therefore, new build-to-rent properties are expected to be developed, purposely designed to meet customer needs.

Adaptation of the residential market for millennials is also a driver for the development of co-living projects. Like all concepts developed for millennials, it includes a significant area with common spaces, namely social areas and facilities, as well as services.

In Portugal the number of lease contracts is less than half the number of sales contracts. While the sale of residential units has been increasing, driven by a growth in development, the number of lease contracts has been declining, not only due to the fact that there were no new developments targeted at the leasing market, but also numerous residential units were being allocated to the short term tourism market. However, Coronavirus has reverted this trend.

Effectively, the number of lease transactions increased around 4% in the first half of 2020, after decreasing over the last years. Consequently, median rental value recorded a slowdown on the rate of growth verified in the past, with a quarter increase of just 0.2% in Q2 2020, compared with a rental growth of around 10% in the two previous year.

In the major capital cities of Lisbon and Porto, the trend has been similar to that observed throughout the country. In Lisbon the number of new residential leases increased around two digits over the first six months of 2020, after a residual 1% increase in 2019. Coronavirus halted the growing trend that was being observed on rental values, already showing a 6% year -on-year decrease in the value of the median of rents of contracts closed in the second quarter of the year, dropping to €11/sq m/month. Misericordia and Santo António parishes are the most expensive areas with a median rent of €14/sq m/month.

In Porto residential lease transactions increased in the first half of 2020,  after decreasing 2% in 2018 and again in 2019. In terms of rental values, the impact of Coronavirus was lower than in Lisbon with a fall in the median rent of just 1%, in the second quarter of 2020, to €8.8 per sq m/month.

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.

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. 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.

Student Housing Market Overview

Student Housing

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 almost tripled in 5 years displaying an average annual growth of 16% between 2014 and 2019. In 2019, there were 60,680 international students registered in Portuguese universities, representing 15% of the total university students. Despite a general 15% increase in the number of international students in the 2019/2020 academic year, the upsurge was driven by students enrolled in degree regimes (+15% yoy) which usually extend for at least one year, rather than those participating in credit programs such as Erasmus (-2%yoy). Erasmus students normally stay for a semester and this program has been more directly impacted by the Covid-19 pandemic in the second academic semester.

International students

Source: DGEEC

Lisbon Region accommodates the highest number of international university students, with a share of 37%, followed by Porto, with 20% and Coimbra with 9%.

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 relatively immature market, with demand currently outstripping supply. We are witnessing international flows of capital into the PBSA market, with a focus on forward funding development, rather than operational assets of which there are few in the private sector. The first specialist purpose-built student residence, operated by an international brand, opened in Lisbon early in 2018. Other foreign operators are entering the market and domestic investors are reinforcing their footprint. At the end of 2020, PBSA supply comprised 3,400 beds and other 2,300 should be available in 2021. Most schemes can be found in Lisbon and Porto.

Supply of PBSA

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.