Savills analyzes and forecasts trends in Real Estate in Portugal

Savills Portugal held the Savills Break' FasTalks event at the MB4 Office Building, presenting the 2022 results and the 2023 Real Estate outlook.


Savills Portugal has presented its 2022 results report and the Real Estate market forecast for 2023 in a warm event attended by its associates, partners and journalists, and the real estate scenario in Portugal was discussed.

With a brief introduction by Paulo Silva, Head of Country of Savills Portugal, who contextualized this conjunctural analysis of the sector, the presentation and moderation was in charge of the Head of Research & Communications, Alexandra Gomes, who shared data from the various markets, from industrial & logistics, offices, retail, residential and investment, also with the participation of the respective agency directors, Pedro Figueiras, Frederico Leitão de Sousa, José Galvão, Miguel Lacerda and Alberto Henriques.

Unanimously, the key tone for 2023 was ‘moderate optimism’, given that even with the economic climate of inflation and political instability, the lack of asset supply and the forecast of an increase in the value of rents in the residential sector, the outlook for the second half of the year is optimistic regarding the continued demand for foreign investment in our country in every market. ESG and sustainability issues have also been highlighted, given their relevance to investors looking for more assets meeting their requirements.

Patrícia Melo e Liz, CEO of Savills Portugal, closed the event reinforcing: ‘The Real Estate market has great visibility and is responsible for much of the attraction of international investment in our country. We are confident and we have a positive feeling for 2023’.


2022 was the year of transition for interest rates. After years at historic lows, rising inflation rates triggered interest rates in July. During the second half of the year, interest rates had already undergone upward corrections of 250 basis points. The question now is when and at what levels will the maximum limits for interest rates be set? With an inflation still at alarming levels, the ECB intends to continue raising interest rates, increasing the cost of variable rate mortgages. The European Central Bank will continue to raise interest rates until the average inflation rate reaches 2% in the medium term. Interest rates are expected to remain on their upward trajectory at a rate of 50 basis points.

After two years of pandemic, 2022 was the confirmation of the recovery with a very positive note of the national real estate investment market. At the end of 2022, the volume of commercial real estate investments reached a total of EUR 3.3 billion. Contrasting to a scenario of strong European economic and political uncertainty, the internal market has continued to display safety and resiliency for investors. After an unstable first half at slower pace, when only 830 million euros were transacted, during the second half of the year the market accelerated, displaying sales of important portfolios.

Crow Portfolio (Hospitality), Connect Portfolio (Industrial & Logistics) and Move Portfolio (Student Housing) amounted more than 1,200 million euros in the total investment volume recorded in 2022. Overall, the sales of several portfolios in 2022 accounted for 50% of the total investment volume in 2022, revealing confidence and commitment of the investors in the domestic market. U.S. investors were the main players in 2022, with the purchase of assets in the Hospitality, Industrial & Logistics and Residential segments.

In 2022, the Hospitality, Offices and Logistics sectors stood out, harboring the preference of investors. The hospitality sector, with the sale of Crow Portfolio, registered a market share of 37%, followed by the office assets with 21% and the logistics with 13%. In the so-called traditional segments, the office sector reached a total of 710 million euros, a slight decrease of 9% when compared to 2021. The highlight was the sale of Novo Banco’s headquarters in the Prime CBD Zone to the promoter Merlin Properties, totaling 15,477 m2 for 112 million euros. In 2022, other emblematic office assets were sold, namely the former seat of Banco Popular and the Liberdade 242 building, the seat of Fidelidade, illustrating the strong appeal of investors about crucial assets in prime areas, or on properties with high rehabilitation potential, corresponding to the current demands, both in terms of size, as well as technical and sustainable specifications, looking for compromised tenants and long-term contracts.

But the highlight is the industrial & logistics sector. After several years of stagnation, both in the investment market and the occupational one, in 2022 this sector was responsible for a record investment of 567 million euros in total with the sale of portfolios. Of the 15 deals closed throughout the year, 5 were portfolios. 2022 was also a year of positive results for alternative segments, which amounted to more than EUR 300 million. The sale of Portfolio Move to Round Hill Capital for 200 million euros is a proof that alternative segments have become a key player in the Portuguese Real Estate. As this type of asset begins to increase in Portugal and strengthens its position, it will attract more and more international capital from players who want to diverse their portfolio to other geographic markets.

The growing lack of quality traditional assets is leading to an opening to this type of asset, with a clear tendency of the alternatives to become mainstream, attracting the attention of investors with a more risk-averse profile. The cross-border capital remains prevalent in the Portuguese real estate investment market, with more nationalities each year. In 2022, in addition to the Crow portfolio's hospitality operation, 38% of the international investment was directed to office and industrial & logistics assets.

In 2022, U.S. investors were responsible for investing more than €1 billion. However, this result is entirely due to the Crow Portfolio acquisition by the American Davidson Kempner Capital Management. If we remove this extraordinary operation from the total equation, the investors from European markets lead the rank. Spanish investment accounted for 18% of the volume with the acquisition of assets with a worth of approximately 600 million euros, followed by French investors with an investment value slightly exceeding 350 million euros.

Portuguese investors depict a market share of 15%, corresponding to the conclusion of 48 transactions and a total investment volume of more than EUR 450 million related to the acquisition of office and hospitality assets, with an average investment of 10 million euros. The Portuguese investment pool in 2022 was led by Real Estate Management Funds, Banks, Developers, also including private investors.


For 2023, the scenario outlined by the current economic situation is expected to continue throughout the year, with rising interest rates to balance inflation rates and high construction costs. With Euribor increasing rates and credit risk spreads trending higher, investment decisions are more cautious, with a more distinct ‘wait and see’ strategy. Rising financing costs, affecting investors’ expected return amounts, will determine whether there is room for repricing.

It will be a year of greater caution and sharper strategic thinking, highly influenced by the evolution of inflation and interest rates. Further diversification of portfolios may be the strategy pursued by investors who wish to balance their degree of exposure, such as investment in residential and alternative segments, namely senior living, health care and student housing, since there is a lack of supply in the market. Office assets will always remain at the top of the investors’ preferences.

Asset classes revolving around demographic trends will also benefit from changes in generational profiles, as also from market fundamentals that remain relevant over a long period. On the other hand, we have an occupational market setting historical records in the office and logistics sectors, supported by a demand that shows no signs of weakness and strives against the predictions of decline of the occupational market.

In addition, one of the main trends in 2023 will be a greater concern with the issues of ESG and decarbonisation. We have a housing stock urgently needing renovation in order to be aligned with the environmental objectives set for 2030. The entire real estate ecosystem is now gathered for a call for environmental, social and governance action. Assets will increasingly stand out for the quality they offer to respond effectively to companies’ ESG & sustainability concerns.