Lisbon is currently undergoing a decisive phase in the office sector, driven by rising demand for modern, sustainable, and technologically equipped spaces. According to the latest Savills report, only 15 to 20% of the city’s office stock meets Grade A classification criteria, highlighting a clear gap between current tenant expectations and investment strategies. This shortage is paving the way for opportunities to refurbish and enhance existing assets.

Demand is increasingly focused on buildings with strong energy performance, high connectivity, and a user-centric approach to wellbeing. Grade A buildings are becoming the new standard, not only due to their construction quality, but also for their energy efficiency and sustainability certifications such as BREEAM or LEED. This pressure on supply has driven rental growth and encouraged the repositioning of Grade B assets.

In this context, two factors are becoming key to decision-making: efficiency, which is critical for resource management, and smart buildings, which represent the next step beyond sustainability. While ESG certifications have become a baseline requirement, there is now growing demand for intelligent buildings capable of integrating advanced technology and AI solutions.

City centre vs. periphery: supply disparities and pressure on prime zones

The geographical distribution of Grade A offices reveals a marked imbalance. Savills data shows that 58% of office space built in the last two decades is located in areas such as Parque das Nações and the Lisbon–Cascais business corridor. By contrast, central areas like Avenida da Liberdade, Saldanha, and Amoreiras continue to offer limited supply. This asymmetry is putting pressure on rents in core locations, where Grade A space is already reaching €35/sqm.

Lisbon also remains a highly attractive destination for international companies, particularly in the technology, finance, and life sciences sectors. Currently, around 60% of the occupation of Grade A space is by foreign firms seeking buildings that meet global standards in design, sustainability, and performance. In the past five years, TMTs & Utilities have accounted for 32% of take-up in this segment, underlining the growing role of innovation in market dynamics.

According to Alexandra Gomes, Head of Research at Savills Portugal: “The increasing preference for sustainable, tech-ready offices with high standards of comfort signals a structural shift in how companies choose and use their workspaces. This transformation is driven not only by regulatory requirements and ESG targets, but also by new workplace trends focused on wellbeing and talent retention. In Lisbon, where just 15 to 20% of the current stock qualifies as Grade A, the need to refurbish and modernise existing assets is now critical. Lisbon has all the conditions to position itself as a leading international market, but this demands a strong commitment to qualitative renewal of the office stock. Meeting growing demand will depend largely on how swiftly repositioning and investment strategies are implemented to deliver more efficient, adaptable, future-ready buildings.”

Luísa Noronha, Offices Associate at Savills Portugal, adds:
“Lisbon’s office market is undergoing a structural shift. Demand for Grade A space is accelerating, but with only a small portion of the city’s stock meeting the current standards – and few new projects in the pipeline – supply is falling short of expectations. We believe the future of Lisbon’s office sector will depend on its ability to balance limited new development with a wave of repositioning and refurbishment. Only by doing so can the market remain competitive, resilient, and attractive to both national and international occupiers in the coming years.”

New European standards and the rising value of high-quality office space

Across Europe, Grade A offices are consolidating their position as the new norm. While an increase in supply is expected in 2025 (4.3 million sqm), a significant drop projected for 2026 (3.1 million sqm) – the lowest level since 2017 – reinforces the urgency of refurbishing existing assets and ensuring long-term market resilience. These spaces are now seen as strategic, not only for attracting top talent, but also for meeting ESG goals and enhancing long-term asset value.

Sustainability and wellbeing are central to this value shift. Certified buildings achieve significant reductions in emissions and resource consumption. WELL-certified spaces, for instance, are associated with up to a 28% increase in employee satisfaction. Between 2020 and 2024, WELL certifications rose by 300%, with platinum-level certifications – the highest tier – growing by 73%.

Jarosław Pilch, Head of Tenant Representation, Office Agency at Savills Poland, states: "Tenant demand is increasingly focused on projects that offer high quality, sustainability certifications, and prime locations. The continuation of this trend, observed over several quarters, reflects a growing preference for the best locations and the highest ESG standards – a dynamic that not only persists but is increasingly shaping the strategies of both occupiers and landlords. As a result, investing in high-quality, future-proof spaces is no longer optional, but a strategic imperative for long-term market relevance and competitiveness."