Last year 1.3 billion euros were transacted in commercial real estate assets in Portugal – the second highest value ever achieved. According to Cushman & Wakefield research data, 2017 is expected to reach a new record.
To date, 10 investment deals were closed in Portugal, representing about 180 million euros. There are also a considerable number of transactions close to completion totalling an estimated investment volume of 600 million euros, which leads us to expect a first half of the year closing near the 800 million euro mark - one of the best first semesters ever registered.
Foreign capital remains strong in the market, with a share of 70% of the total investment. The office sector is the most attractive to investors, reaching 100 million euros, with a large contribution from the biggest deal to date, the sale of the Entreposto building for 65.5 million euros.
Considering the visible pipeline, 2017 should have a similar distribution per sector as 2016 with retail and offices capturing the majority of capital, and hotels and logistics raising less interest.
In 2016, the Portuguese market yields observed a sharp correction; currently prime yields are at 4.9% for offices, 5% for shopping centres, 4.75% for high street and 6.5% for industrial. The forecasts point to a less noted correction, or even stability, with a higher likelihood of asset value rises t through rent increases, particularly in high street retail and offices.