Savills presented the Portugal Real Estate Market Overview study to journalists earlier this week, at a meeting where it outlined the year 2022 and its outlook for 2023.
According to the study's results, in 2022, the volume of real estate investment stood at 3.3 billion euros. It should be noted that foreigners represented 85% of the capital invested last year, and also the fact that North Americans are gaining increasing strength in terms of foreign investment in Portugal.
The results achieved in the real estate sector in 2022 point to a "very positive year, where we had an outlier: the sale of ECS funds to Davidson Kempner Partners, for a value of around 850 million euros," said Alexandra Gomes, Associate Director of Savills.
The responsible highlighted the main aspects that occurred in 2022: the hotel segment "gains leadership"; offices are "investors' main reference asset"; logistics is "the year's highlight, a segment that has been reborn and is gaining importance by investors".
The consultancy firm emphasises the fact that this segment had "the best year ever", with an occupation of 272,000 square metres in Greater Lisbon alone. In Porto, the market is dependent on the TMT sector, and there are many new companies entering Porto and companies that want to expand their activity in the city.
The consultancy indicates that the ESG trends and new concepts of office spaces, which offer a set of amenities to workers, will continue in 2023. Frederico Leitão de Sousa, Head of Corporate Solutions at Savills, points to a consolidation of the office market in 2023, and "there are no forecasts of a slowdown in demand, but there will not be as much supply in Lisbon and Porto". The responsible also adds that Braga began to "gain prominence" in this market.
The increase in housing construction costs (11.7%), in year-on-year terms, is not an obstacle to the total number of projects, however, the consulting firm states that "the increase in interest rates is already being felt. Savills indicates that between 2023 and 2025, the areas of Alcântara, Lumiar and Avenidas Novas have projects in the pipeline aimed at the upper class.
Miguel Lacerda, Savills' Lisbon Residential Director, says that the high-end market, where Savills operates, is expected to experience "optimism" and "moderate growth". He said that "developers are looking more and more at the high-end product, but there will be a focus on other markets. Oeiras stands out as one of the areas with "more new projects planned," says Miguel Lacerda.
There is a forecast of "a slowdown in private consumption and a reduction in purchasing power", points out the consultancy, which adds that Portugal is still "far behind in online commerce, below the European average". José Galvão, head of Retail at the consultancy, emphasised that "businesses geared towards the luxury segment and tourism should be the least impacted.
Nevertheless, the shopping centre market continues to be "one of the most mature in European terms" and has grown "by way of modernisations and refurbishments, to the detriment of new openings", refers Savills, which highlights Retail Parks as "one of the most resilient formats, which took advantage of the pandemic crisis to generate opportunities".
It "will continue to expand this year," said Savills. Room revenue increased 120.4%, as a result of 24.9 billion guests (+86.6%) and 65.8 billion overnight stays (+89.4%). Portugal welcomed 77 more hotel units and, by 2023, will continue to follow this growth trend. The consultancy also points out that "digital nomads need accommodation, the tourism sector has to adapt to this new public".
Industrial & Logistics segment
Absorption stood at 538,000 square metres. In Lisbon, in the year under review, occupancy of 269,000 square metres fell by -35% compared to 2021, while in Porto, 120,000 sqm, the year-on-year difference was -22%. Savills anticipates that in 2023, "we will continue to have stable demand levels in this sector", underlining that "the nearshoring trend is growing, as well as the demand for middle-mile platforms".
The specialists present at the presentation reinforce that, although the slowdown is predicted, there is no reason for alarm. Portugal is a country far from conflicts, safe and with an excellent climate and geographical location. For the specialists, these are factors that place Portugal in the orbit of international investors, which means that they will "continue to bet on the country", stresses the consultancy.