• In the year-to-date for 2024, Lisbon reached a take-up volume of 97,436 sq m, significantly surpassing the 24,838 sq m recorded in the same period of 2023

• The prime rent values in the capital position Lisbon as one of the most competitively priced cities in Europe

• An 82% increase in take-up volume in Porto marks the best year-on-year result of the past five years

Lisbon

From January to April 2024, Lisbon achieved 97,436 sq m of take-up volume, greatly surpassing the 24,838 sq m recorded in the same period of 2023. There were 56 operations in the first four months of 2024, an increase of 14% on the previous year, with an average area of 1,740 sq m per operation.

The Parque das Nações area stood out with the best performance, registering 16,919 sq m occupied in April and 45,589 sq m in the accumulated period from January to April 2024. This performance was driven by two major operations, including the pre-letting of 26,709 sq m by Caixa Geral de Depósitos in the WELLBE Building and the letting by the European University of 15,835 sq m in the Oriente Green Campus.

In April, the ‘Other Services’ sector led take-up with 16,429 sq m. However, the ‘Financial Services’ sector was the most dynamic, with 49,800 sq m of take-up absorbed in eight operations. Regarding take-up, the two aforementioned operations had a substantial impact on the most prominent sector. Nevertheless, it is important to acknowledge that TMTs continue to play a significant role in placements.

By the end of the first quarter of 2024, the Lisbon office market had a total stock of 4.4 million square meters and an available supply of approximately 445,000 square meters, resulting in a vacancy rate of 10.02 percent. The ‘west corridor’ exhibited the highest vacancy rate at 19.66%. It’s important to note that in prime zones, the actual availability rate is roughly half, as many other areas fail to meet the current requirements of occupants.

By the end of this year, approximately 135,000 sq m of new office space is expected to be completed, of which 15% is already earmarked for pre-letting and 53% for owner-occupation.

Prime rent values remained stable at 28€/m²/month, positioning Lisbon as one of the European cities with the most competitive prices, competing with markets such as Athens, Prague, and Warsaw.

Frederico Leitão de Sousa, Head of Offices at Savills Portugal, declares: “It’s extremely gratifying to see that the office occupancy market in Lisbon continues to show very positive figures, contrary to the trend seen in many other markets, such as the US. The solid fundamentals of our market suggest that this resilience will be maintained, which undoubtedly has a positive impact on the investment market. This optimistic scenario reinforces confidence in the stability and continued growth of the Lisbon property sector, particularly in the office segment.”

Porto

In Porto, the office market recorded a total take-up volume of 21,284 sq m in the first four months of 2024, reflecting an increase of 82% compared to the same period in 2023, making this the best result of the last five years.

A total of 27 transactions were completed in this period, representing a 42% increase on the previous year, with an average area of 788 sq m per transaction. There were also 8 operations with areas of over 1000 sq m.

The Matosinhos Zone showed the best performance with 7,827 sq m of take-up volume, which translates into an increase of 168% compared to the same period in 2023, followed by the CBD Boavista Zone with 6,531 sq m, an increase of 135%.

The TMT & Utilities sector was the most dynamic until April 2024, accounting for 59% of the total take-up volume.

By the end of 2024, 44,189 sq m are expected to be completed across 10 projects, of which 35% are already pre-let and 28% are destined for owner-occupation.

Prime rents in the northern region showed an upward trend, closing the first quarter at 19€/m², which represents an increase of 5.5% compared to the fourth quarter of 2023. The biggest increase in rents was in the ZEP – Expansion Zone – due to the growing number of new buildings being commercialised that stand out for their quality and efficiency.

Graça Ribeiro da Cunha, Offices Associate at Savills Portugal | Porto Division, highlights: “The positive trend in the volume of absorption in Porto’s office market proves the growing dynamism of this segment of the property sector. On the other hand, the increase in prime rents reflects the placement of quality products on the market, which has also been evident.”