Portuguese property investment falls 48% in one year

Portuguese property investment falls 48% in one year

Despite falling energy prices and a stable labour market, the context experienced across Europe in recent months is contributing to a more negative economic outlook. In the 3rd quarter of 2023, the property investment market in Portugal totalled 262 million euros, a figure that represents a decrease of 46% on the previous quarter. These are the figures in the Real Estate Market Overview, drawn up by Savills Portugal. Between January and September, total investment totalled 1,021 million euros, down 48% on the same period in 2022.

Investment volumes fell across the board in various asset classes. However, the retail and hospitality segments proved to be the most resilient, contributing 38% and 37% respectively of the accumulated property investment volume.

Paulo Silva, Head of Country at Savills Portugal, emphasises that "the investment panorama in Portugal is in line with the rest of the European market, with almost all geographies registering falls in this area. The increase in financing costs and the lack of correction in sales prices continue to be at the root of longer decision-making processes that are reflected in a natural decrease in both the number of transactions and the volume of investment, with the granting of loans for large-scale businesses or secondary assets becoming more difficult. The recovery of the market will be gradual, in line with the adjustment of sales prices and the improvement of the economic context."


In the first 9 months of the year, the Lisbon office market recorded a year-on-year drop of 71 per cent in terms of take-up, resulting in a total absorption of 72,133 sqm , data influenced by pre-let and owner occupier levels. However, the third quarter stands out for being the strongest period of 2023 so far, indicating that the final stretch of the year is proving to be more dynamic compared to a slower start caused by the uncertainty generated by the macroeconomic situation.

Frederico Leitão de Sousa, Head of Offices at Savills, points out that "despite the observed drop in take-up, companies are adapting and finding ways to adjust to these challenging times. Demand for quality office space remains high, especially from larger Press Release companies that prioritise ESG and sustainability guidelines. For 2024-2025, there is a pipeline of 211,000 sqm , 30 per cent of which is already pre-occupied, a positive indicator for the year ahead."

Up until September this year, Porto's office market saw a 10 per cent drop in take-up. Despite this challenging environment, the total take-up volume reached 40,615 sqm , with the third quarter recording a total take-up of 15,431 sqm , which means an increase of 3 per cent compared to the same period last year. Graça Cunha, Offices Associate, Savills | Porto Division, said that "after a more static start to the year, by the end of 2023 approximately 35,000 square metres of office space is expected to be completed, with 23% destined for self-occupation. By 2024 and 2025, the pipeline will see an increase of more than 61,000 sqm of new office space."

Industry & Logistics

According to Savills, in the Greater Lisbon industrial and logistics market, the accumulated volume for the first nine months of the year saw a slight decrease of 5 per cent compared to the same period in 2022 in terms of take-up. In total, 30 per cent of the number of transactions closed by the end of the third quarter of the year concerned transactions over 5,000 sqm, mainly for logistics operations. Over the next two years, more than 500,000 sqm are expected in the pipeline in the Greater Lisbon area. The industrial and logistics market in Greater Porto saw a total take-up of just over 80,000 square metres at the end of the first nine months of the year, the best result for five years. For this region, the pipeline between 2023-2024 totalled 130,000 sqm , spread over three projects, 42% of which have already been pre-commercialised.


According to a field survey carried out by Savills Portugal, there were 80 new shop openings in Lisbon in the third quarter of 2023. The city of Porto welcomed 18 new shops during the third quarter of 2023, with the historic city centre accounting for almost 83% of these openings.

Residential Property

During the 3rd quarter of 2023, 31,809 residential properties were sold in mainland Portugal. Compared to the same quarter in 2022 (39,877) and the 2nd quarter of 2023, there was a decrease of around 20 per cent and 5 per cent, respectively. Lisbon recorded the highest number of transactions in Greater Lisbon and in the country, with a total of 2,113 operations in the 3rd quarter of 2023, representing 22 per cent of all closed transactions in the region and 6.6 per cent in Portugal. However, the city saw a 23 per cent drop in the number of housing sales compared to the same quarter in 2022.

At the end of the 3rd quarter of 2023, there were 1,946 licensed units in Greater Porto, an increase of almost 5.2 per cent and 1 per cent compared to the 2nd quarter of 2023 (1,849) and the 3rd quarter of 2022 (1,928). In the 3rd quarter, 1,352 transactions were closed, down 22 per cent on the same period in 2022. During the 3rd quarter of 2023, prices showed a slowdown in their growth trajectory compared to the same period in 2022. In the high-end segment, the Lisbon market saw a 3.4% contraction in the asking price of new properties and a 2.3% increase in the case of used properties. In the Porto market, the increases were 2% for new properties and 6% for used properties.

Miguel Lacerda, Lisbon Residential Director at Savills, emphasises that "the macroeconomic and geopolitical factors taking place at a global level are proving to be decisive for the current dynamics of the residential market. High inflation rates and constant legislative changes related to the end of golden visas and the RRNH, combined with factors such as rising construction costs, have a significant impact on this segment of the national property market. However, 68.3% of the residential properties currently under construction in the city of Lisbon have already been commercialised, which demonstrates the constant dynamics of the market."

João Leite de Castro, Commercial Director, Savills | Porto Division, said that "the scenarios for the residential market are identical in the north of the country, where there has also been a decrease in the number of transactions carried out. Press Release However, there are some examples that contrast with this reality, such as Vila Nova de Gaia, which this year consolidated its position as the country's main destination for investment in new residential development, which makes us look to the future with an optimistic outlook."


During the third quarter of 2023, 41 new hotels opened their doors in Portugal and a further 26 new hotel openings are expected during the last quarter of the year, offering around 2,300 rooms across the country. Lisbon has so far been responsible for the largest number of hotel openings in the country, totalling 20 new hotel units, with the Alentejo region in second place. The Northern region and the city of Porto followed, with 17 new openings throughout 2023, up until the third quarter of the year, with Porto becoming a destination of choice.

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