Portugal’s real estate funds grew at end-2025 as investors pile into EU markets and services-sector assets (offices, retail, logistics) for stability, steady income and portfolio protection.
Real estate continued to strengthen its role in Portugal’s investment fund landscape at the end of 2025, as managers and investors sought stable, tangible assets amid market uncertainty. Funds linked to real estate registered notable growth in December, confirming renewed investor confidence and reinforcing property’s appeal as a hedge against volatility.
Managers concentrated capital in European Union markets, favoring jurisdictions seen as mature and legally predictable. That prudent geographic focus reflects fund managers’ preference for regulatory stability as they deploy capital into property assets across the bloc rather than into higher-risk, less-regulated markets.
The services sector — offices, retail and other tertiary assets — was the main recipient of that real estate investment, accounting for almost half of the portfolios of open-ended funds. The strong tilt toward workspace, commercial units and logistics signals investor belief in the ongoing demand and income resilience of these asset classes, even as work models and consumer patterns evolve.
Growth was not uniform across all fund types. Traditional real estate investment funds recorded increases in assets under management, while special funds and real estate wealth management vehicles showed reductions, suggesting portfolio rebalancing or liquidity needs in some niches. Despite these differences, real estate remained central to many allocation strategies thanks to predictable income streams and medium- to long-term appreciation potential.
Industry professionals point to several drivers behind the momentum: a search for income in a higher-rate environment, demand for real (physical) assets that preserve value, and growing professionalization and transparency in fund management. Diversification by asset type and EU location has been used to mitigate risk while capturing steady returns.
Looking ahead to 2026, the market is expected to remain selective. Investors are likely to prioritize asset quality and adaptability, with continued interest in services, logistics and mixed-use projects that combine flexibility and income generation. If that trend holds, real estate will remain a cornerstone of collective investment in Portugal — but with a sharper focus on resilience and long-term value.
