Commercial real estate investment in Portugal totalled €1.8 billion by the end of the third quarter of 2025, representing a 60% increase compared with the same period of the previous year, according to Savills’ Market Outlook Q3 2025 report.

After a period of expectation adjustment driven by rising interest rates, clear signs of market stabilisation are beginning to emerge. In the third quarter alone, investment volume reached €572 million, 50% more than in the same period last year.

In the first nine months of the year, the average deal size increased by 47%, reflecting greater capital concentration per transaction. Compared with the average of the last three years, accumulated volume grew 35%, signalling consistent growth in real estate investment in Portugal.

Pedro Figueiras, Head of Capital Markets, comments: “2025 has shown a solid performance, marked by consistent growth in investment levels across all sectors, which allows us to anticipate that it could end as the third, or even the second-best year ever. In line with the dynamism of the national economy, the Portuguese commercial real estate market continues to attract the attention of an increasingly diversified base of global investors with different capital profiles. At the same time, there is a clear increase in liquidity and appetite among domestic investors.”

Retail and hospitality lead investment

Between January and September 2025, the retail and hospitality sectors together represented more than half of total investment volume, with year-on-year increases of 99% and 21%, respectively.

In retail, shopping centres stood out as the most dynamic asset class, attracting more than €500 million and reinforcing the segment’s maturity among institutional funds and private equity.

The office segment regained prominence, supported by stable occupancy levels and a shortage of quality product in central locations, while investment in alternative assets—such as Purpose-Built Student Accommodation (PBSA)—gained traction, driven by structural demand in university cities such as Lisbon, Porto and Coimbra.

Investor profile

Between January and September 2025, investment funds and real estate asset management companies accounted for more than half of total transaction volume. Institutional investors remained active, with a stronger focus on the office and retail segments.

Prime yields stabilised across most segments in the third quarter, with compression seen in assets such as supermarkets and PBSA, in a context of strong demand, limited supply, and stable rents.

Savills’ Market Outlook Q3 2025 report provides an in-depth analysis of the main investment areas, with particular focus on Hospitality, Offices, and Industrial & Logistics:

• Hospitality

In the hospitality sector, investment reached €390 million, a 20% increase compared with the same period in 2024. Over the past three years, cross-border investment accounted for an average of 80% of total hotel investment, reinforcing Portugal’s position as one of the most sought-after destinations in Europe for this type of asset.

The Algarve and Greater Lisbon concentrated the largest share of this capital, followed by Porto and the North region.

Between January and September 2025, Portugal welcomed more than 25 million guests, 61% of whom were international. Savills identified the opening of 59 new hotels, adding more than 5,600 rooms to national supply.

• Offices

In the office segment, investment reached €235 million (13% of the total). Although it remains below pre-2023 levels, the market is showing signs of recovery despite the shortage of quality product in prime areas.

Prime yield rose 25 basis points to 5.00%, reflecting the lack of transactions involving prime assets. Even so, the segment remains resilient, supported by consistent demand for high-quality spaces aligned with ESG criteria.

In Lisbon, take-up reached 47,378 m² in the third quarter, 16% more than in the same period in 2024, although cumulative absorption up to September still shows a 22% drop, constrained by the shortage of quality space in central areas. The quarter was driven mainly by the Business Services, Government, International Organisations, and TMTs & Utilities sectors, which together accounted for more than 70% of volume, with the highlight being Banco de Portugal’s 32,000 m² operation in the future Entrecampos project.

By the end of 2025, around 44,705 m² of new office space is expected to be delivered, approximately 60% of which is already pre-let—evidence of tenant confidence and early demand in a context of limited supply.

In Porto, take-up stood at around 18,000 m² in the third quarter, 41% less than in the same period of 2024, with a cumulative decline of 54% up to September. In 2025, the pipeline is approaching 60,000 m² of new space, the highest annual figure in the analysed period. More than half of this volume corresponds to refurbishment projects, highlighting the growing importance of building renovation in the city’s office market.

• Industrial & Logistics

The I&L sector recorded accumulated investment of €148 million up to September, surpassing total volumes seen in 2023 and 2024. The pipeline of investment intentions suggests the sector is on track to achieve its highest-ever level of development.

Despite a shortage of modern facilities, the national logistics stock increased 7% year-on-year. Total take-up declined 30% compared with the same period in 2024, reaching around 368,000 m², but accelerated in the third quarter with quarter-on-quarter growth of 65%—a sign of a dynamic end to the year, albeit still below the more than 700,000 m² transacted in 2024.

Pre-let operations accounted for 46% of take-up, up 171% compared with 2024, reinforcing the idea of active demand and the urgent need for quality logistics product on the market.

In Greater Lisbon, logistics stock increased 8% year-on-year, while the vacancy rate saw only a marginal rise of 0.69 percentage points, settling at 3.66%, confirming strong pressure between demand and supply.

In Greater Porto, stock grew 6% to reach 1.3 million m², driven by the completion of new projects, but cumulative take-up fell 41% year-on-year, reflecting limited availability of suitable supply.