Portugal’s commercial real estate sector is booming. Investment in the country’s key commercial assets—offices, data centers, shopping centers, shops, and warehouses—is forecast to reach €2.6 billion by the end of 2025, reflecting a healthy 13% growth compared to 2024, according to new research from CBRE.
Office Market Outperforms European Peers
Driving this positive outlook is Portugal’s thriving office market. Lisbon and Porto boast some of the lowest vacancy rates in Europe at 5.1% and 8.1% respectively, well below the continental average of 9.2%. These figures signal a strong and growing demand for office space, down in part to an influx of multinationals and startups, especially in the technology and innovation sectors.
Since before the COVID-19 pandemic, Portugal has posted a 6% increase in office occupancy—the second-highest growth rate in Europe, surpassed only by Norway. This resilience stands in stark contrast to other markets, such as Ireland, where tech giants’ embrace of remote work has caused occupancy to plummet.
Rising Rents and Prime Yields Attract Investors
Office rents in Portugal’s prime locations have soared, reflecting the country’s newfound status as a commercial hotspot. In Lisbon, prime office rents have jumped 58% in eight years, now averaging €30 per square meter. Porto has seen a parallel 55% growth, reaching €21 per square meter. These price increases—after two decades of stagnation—highlight Portugal’s appeal to investors seeking stability and robust returns.
At the same time, yields for premium properties remain attractive, hovering around 5% in central Lisbon (encompassing Avenida da Liberdade, Marquês de Pombal, and Saldanha), and 6.5% in Porto’s Boavista area.
New Trends in Office Use: Flexibility and Quality
CBRE’s analysis highlights changing preferences in office occupancy and leasing amid post-pandemic uncertainty:
- Return to Office: Nearly half of company leaders plan to increase on-site work, responding to a gap between required in-person days and actual attendance.
- Greater Flexibility: A growing number of firms—61%—are adopting desk-sharing models and favoring flexible leases (like coworking) to optimize space, reduce capital outlay, and support quick expansion.
- Efficient Space Use: While workspace demand rises, 55% of companies expect to downsize their overall office footprint as hybrid work persists and cost controls remain a priority.
Forward-thinking landlords are responding by offering a range of amenities—cafeterias, on-site services, and more—to attract and retain top tenants in a competitive environment.
Expanding Investment Beyond Offices
While office space dominates headlines, there is a rising focus on data centers, student housing, nursing homes, and logistics assets. Investors are diversifying their portfolios to balance risk and tap into underserved niches where long-term demand seems certain.
Portugal’s Edge: Attracting International Business
Thanks to its dynamic business environment, skilled talent pool, and quality infrastructure, Portugal is increasingly on the radar of multinational corporations and international investors. With office occupancy and rent climbing far faster than in most of Europe, the country is cementing its reputation as a regional commercial property leader.
Portugal’s Brighter Future for Commercial Real Estate
Although 2024 set a high bar with a 44% surge in non-residential investment, 2025 will continue the upward trend—with growth in both core and emerging asset classes. As Portugal outpaces European peers on almost every measure of office demand and investment returns, the outlook for its commercial real estate sector is brighter than ever.
Looking for more on Portugal’s commercial real estate trends or investment opportunities? Follow our updates for in-depth analysis and expert insights.
Optimize your investment strategy or grow your business footprint by keeping an eye on Portugal—the up-and-coming champion of European commercial real estate.
