- This value represents a 51% growth compared to the previous year
- Shopping centres, supermarkets, and hotels were the top preferences of investors in 2024
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This performance reflects the anticipated recovery of the sector following a more challenging 2023, as well as the strengthening of investor confidence in the competitiveness of the Portuguese market.
Foreign investment accounted for 81% of the total investment, with France, Spain, and South Africa being the countries with the highest volumes. On the other hand, Real Estate Investment and Asset Management Funds were responsible for 62% of the total investment volume, covering all real estate segments. Prime yields remained stable throughout 2024, with the office segment showing a yield of 4.75%, and shopping centres recording 6.25%. Retail parks maintained this indicator at 7.00%, while supermarkets and the logistics segment remained stable at 5.50%.
Retail
The retail segment was the standout of 2024, with a total investment volume of €1,166 million, reflecting a significant 104% increase compared to the previous year. This performance is a result of the revitalization of the segment, particularly in the subsegment of Shopping Centres, which accounted for 20% of total investment, driven by the recovery of consumption and repositioning strategies. Next were supermarkets, which represented around 19% of the investment volume and have proven to be an attractive asset class for investors. Evidence of this is the completion of large transactions, such as the acquisition of supermarket portfolios.
Hospitality
The hospitality sector maintained its second position in terms of investment volume, with a market share of 20%. However, it saw a 15% decrease compared to 2023. Despite this decline, it remains a strategic segment within the real estate investment context due to Portugal’s importance as a global tourist destination.
Alternative Segments - Living
This segment has increasingly gained importance in the national real estate market, achieving an exponential growth of 114% compared to the previous year, with a total volume of approximately €274 million. This increase was driven by the demand for assets to create Purpose-Built Student Accommodation (PBSA) and Senior Living, reflecting recent demographic trends and a greater focus on specialized housing solutions.
Offices
After one of the worst performances in history in 2023, the office market regained prominence in 2024 as an attractive asset class, particularly for core and core-plus investors. This strong performance was reflected in the investment value, which reached €310 million, representing a 94% increase compared to the same period last year. The drop in interest rates was crucial to renewing confidence in the market, while the return to office-based work emphasized the importance of offices in promoting collaboration and organizational culture, consolidating their relevance and dynamism in the national real estate investment market.
Industrial & Logistics
The industrial and logistics segment continues to show a solid growth trajectory in investment volumes, with a significant year-on-year increase of 83%. Although the volumes are still not comparable to other asset classes, the strong fundamentals of the occupational market and the quality of buildings have led to increasing interest in the development of new projects, resulting in significant investment volumes for development and the initiation of relevant processes, indicating a substantial increase in logistics development investment in 2025.
Outlook for 2025
The last months of 2024 showed a clear return of dynamism to the market, strengthened by a more favorable economic context. For 2025, this growth trajectory is expected to continue, with Lisbon and Porto remaining the primary investment destinations. However, interest is beginning to expand to peripheral and emerging areas, such as the Algarve and the Northern Region, where tourism and competitive costs stand out as key attractions.
Trends
In 2025, portfolio diversification will be a priority for investors, who will continue to bet on traditional segments such as Retail and Offices, while exploring new opportunities in expanding sectors such as Hospitality and Living.
Paulo Silva, Head of Country at Savills, points out: “The real estate investment market in Portugal showed signs of great dynamism throughout 2024, with particular emphasis on the last quarter, which gives us optimistic signs for 2025, which we expect to be another very positive year. We believe that fast-growing sectors such as Living and Hospitality will continue to attract large volumes of investment, as will more traditional segments such as offices and logistics. We will continue to see strong demand for modern and sustainable assets that align with the latest trends, particularly concerns about ESG factors, with a restriction on investor intentions due to the scarcity of assets with these characteristics.”