With 2026 still in its infancy, taking stock of the year that has just ended helps us understand the starting point for the Portuguese property market. In 2025, the sector confirmed a scenario of stability, with investment in commercial real estate reaching around €2.67 billion, a growth of close to 10% compared to 2024, according to an analysis by Cushman & Wakefield.
The new year is starting with signs of continuity and dynamism, as several deals initially planned for the end of 2025 are expected to be completed in the first months of 2026. Last year, foreign capital remained significant, representing around 60% of the total invested, although far from historical highs, which shows the growing confidence of domestic investors.
Retail leads the way again
In terms of distribution by sector, retail once again led the way, accounting for 29% of the total volume, followed by offices with 26% and hotels with 20%. Alternative assets, which include specialised residential properties such as student and senior residences, accounted for 13% of investment, while the industrial and logistics segment accounted for 11%.
In the occupational market, there was a general decline in absorption levels, both in offices, with falls of 23% in Lisbon and 51% in Porto year-on-year, and in logistics, which fell by 30%.
Retail saw a 20% reduction in the number of new openings, although there was strong momentum in the restaurant sector. The hotel sector remained resilient, with more than 80 new hotels opening, offering around 4,800 additional beds. Despite lower absorption, rents rose in virtually all sectors, especially in prime areas, showing that the drop in occupancy was due to a shortage of quality supply rather than a lack of demand.
All yields compressed over the year, with the exception of offices in Lisbon, which remained stable at 5.00% (yields move inversely to prices, so yield compression implies an increase in asset value). At the end of the year, prime yields stood at 5.00% for offices in Lisbon, 6.50% for offices in Porto, 5.50% for logistics, 4.00% for high street retail and 6.15% for shopping centres.
According to Paulo Sarmento, Head of Portugal at Cushman & Wakefield, "this was a year of consolidation for commercial real estate, marked by some geopolitical uncertainty but also by the stabilisation of interest rates. This scenario has sustained strong occupational activity and is bringing institutional investors back to the market, reinforcing the appetite for quality assets, anticipating appreciation and adjusting strategies for a cycle of sustainable growth".
From the consultancy's perspective, one of the major challenges and opportunities for 2026 will be affordable housing, driven by new measures that are expected to be enshrined in law at the beginning of the year. These initiatives could create conditions to boost the development segment, accelerating the development of residential projects aimed at the middle segment in the outskirts of large urban centres.
According to C&W, developers who manage to overcome legal and technical barriers and respond to the demand for more affordable homes will be well positioned to benefit from the positive market momentum. A legal and fiscal framework more favourable to the development of Build to Rent could be decisive in unlocking a sector that is unavoidable in Europe in terms of investment, but which still has little presence in Portugal.
"2026 will be the year when sustainability, technology, new occupancy formats and affordable housing solutions will cease to be trends and become structural pillars of the property market, continuing to position Portugal as one of the most interesting destinations for attracting international investment," adds the head of the consultancy in Portugal.
Next year should see an acceleration in the transformation of the sector, with sustainability continuing to play a central role in asset valuation and technology redefining the way spaces are used. Hybrid offices and flexible spaces are likely to become more widespread, especially in more central locations, while in retail, the integration between physical and digital will be even more evident. In logistics, proximity to urban centres and the focus on smart warehouses will gain relevance.
