Portuguese commercial property investment reached 321 million euros in the third quarter of this year, bringing the total volume invested since the beginning of the year to 1,053 million euros, down 40% on the same period last year.
The figures were compiled as part of Cushman & Wakefield's Marketbeat Snapshot report, which summarises commercial real estate activity in Portugal during the third quarter of the year.
In these three months, the main transactions concerned Square Asset Management's purchase of the La Vie Funchal shopping centre from ECS Capital and Oitante for 60 million euros, or Arrow's purchase of the Hilton Vilamoura and Vilamoura Garden hotels from DK Partners for between 45 and 51 million euros. According to Cushman & Wakefield, these transactions "contributed to the consolidation of the prevalence of the hotel and retail sectors, which respectively accounted for 46 per cent and 39 per cent of the quarter's total volume, and around 40 per cent each between January and September".
Thus, in this accumulated period, offices represented an investment volume of 418 million euros, retail 392 million, hotels 271 million and industrial/logistics 42 million euros.
After several consecutive increases in previous quarters, prime yields remained stable in all sectors during the 3rd quarter. Even so, although the current values are at 4.75% for offices and high street retail, 5.5% for logistics and 6.25% in shopping centres and 6.75% in retail parks, "a further upward correction is to be expected at the end of the year", according to the consultancy.
The consultant's report also notes that, according to Moody's Analytics, Portuguese GDP growth is expected to slow to 2.2 per cent this year, and to 1.4 per cent next year, rising to 2.2 per cent in 2025. Even so, Portugal remains one of the fastest growing countries in the eurozone.
Due to the context of global uncertainty, investment is expected to fall by 1.2 per cent this year, returning to growth of 4.7 per cent in 2024. Inflation, meanwhile, after 7.8 per cent in 2022, is expected to moderate to 4.5 per cent this year and 2.6 per cent next year. At the same time, the unemployment rate will rise to 6.4% this year and fall to 5.9% in 2024, "as the labour market recovers".