Research by Prime Yield: Property investment is expected to surpass €2,0 bn again in 2025, benefitng from stable macroeconomic and political conditions
Prime Yield, part of Gloval, has presented the ‘Investment Guide for Property in Iberia 2025′, showcasing the key performance indicators for the property market in Portugal and Spain over the last year, and also providing a comparative legal framework focused on REITs and SICs. This essential tool for investors looking at or already active in this market kicks off with the economic framework for both countries. The legal component was developed in association with Pares Advogados.
Regarding the Portuguese property market, Prime Yield highlights the positive outlook for commercial property investment this year. It is estimated that activity will at least maintain the level recorded in 2024, amounting to around €2.4 billion, and potentially exceed this figure by 10-15%. It should be noted that property investment recovered by around 40% in 2024, with a significant contribution from the final quarter of the year. This quarter accounted for nearly half of the annual activity and signalled the resumption of large transactions, particularly in the retail sector. This year should see a continuation of this trend, with more favourable macroeconomic conditions and increased global liquidity providing further benefits.
Francisco Virgolino, Prime Yield’s managing director, explains that “Portugal occupies a strong position on the global property investment map. ‘We are undoubtedly on investors’ radars thanks to our high-quality properties and strong performance indicators in terms of occupancy, vacancy rates and rents across several segments.’ The downturn in 2023 was the result of adverse global macroeconomic conditions characterized by inflationary pressure and a sharp rise in interest rates. These factors impacted investors’ liquidity, leverage capacity and confidence. Last year, as this situation improved, activity picked up. With solid fundamentals intact, Portugal recovered in a trajectory common to many other European markets”.
Virgolino added: “Interest rates and inflation are expected to continue the path recorded in 2024. Alongside the positive performance of the Portuguese economy compared to the Eurozone, the holding of elections, and the strength of the labour market, we are optimistic about a continued positive trajectory of property investment.”
In terms of occupational activity, expectations are also positive, including for the office market. “This market began the year in decline after achieving record levels in 2024. Last year, office take-up in Lisbon and Porto reached exceptionally high levels, driven by large scale operations. A slowdown was expected this year, and this is likely to be further aggravated by political uncertainty in the first half of the year, causing companies to postpone decisions. However, with the recent elections and the favourable macroeconomic framework, office occupancy should pick up again. In the other segments, demand is expected to increase, but a lack of supply is still an issue, keeping prices and rents on an upward trend, especially in the housing market,” concludes Francisco Virgolino.
If you want to access to the main findings of the “Investment Guide for Property in Iberia 2025”, be sure to contact us.
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