Real estate investment reached three billion euros in 2022 (+39%), with the country entering 2023 with investments of a similar value to 2022, according to the consultancy Cushman & Wakefield (C&W).

In a presentation the consultant highlighted the “excellent year” that 2022 turned out to be, registering a “very consistent performance” and showing that “Portugal remains on the radar of investors”.

The overall value of three billion euros in investment recorded in 2022 represents a 39% increase compared to that observed in 2021, with the hotel sector representing 30% of this total, offices 27%, industrial 21%, and retail 9%.

During the presentation, Eric van Leuven, managing director of the consultancy in Portugal, stressed that many of the operations that contributed to that overall value were closed at the end of the year, which reveals “a sign of great confidence in the market” and gives “encouragement to foresee that 2023 will be a more active year than the current situation could lead to anticipate”.

The country, he said, enters 2023 with a pipeline [projects in portfolio] of already identifiable investments of a similar value to that observed in 2022 (about two billion euros), however, he said, “the robustness” of this pipeline is this year “weaker”.

On the radar

“There is greater uncertainty at the start of the year”, he said, adding that among the various market segments, the one in which there will be greater uncertainty in the set of identifiable investments is retail, which has to do above all with the current context of loss of consumer income (in view of rising prices and interest rates). Although the “fundamentals” of the Portuguese market remain robust and unchanged and the country remains on the radar of international investors.

“After a surprisingly positive year for the Portuguese market, considering the circumstances, we are a little more cautious with regard to 2023”, says Eric van Leuven, noting that “Portugal will not be immune to the climate of apprehension that reigns in northern Europe ”, where “many of the decisions regarding investment in our country” are taken. Of the three billion invested in 2022, 76% is foreign capital – and this percentage does not include joint investments by national and foreign capital.

On the other hand, he points out, the rise in interest rates and the greater difficulty in financing "result in a climate of uncertainty regarding the real value of assets, which in turn will make investment decisions postponed until there is greater clarity", in addition to existing indicators point to an expansion of yields, which will result in “lower sales values”.

Different markets

Regarding the year 2022, the consultant's data indicate that, in the office segment, the Greater Lisbon area had in 2022 the best year ever, with this market absorbing almost 260 thousand square meters and emerging with a future offer of around 255,000 square meters (74% of which have already been absorbed).

In retail, C&W points to the recovery trend registered throughout 2022, “particularly supported by the resumption of expansion plans by national and international retailers”. In the industrial and logistics segment, 2022 did not break the records of 2021, but the results achieved were “very good”, with a take-up of 331,400 square meters between January and September.

The year that has just ended was also one of “enormous recovery” in tourist activity, with 44 new units having been inaugurated, with around 2,600 rooms, close to half of which have a 4-star rating. “As for the future offer, around 115 new hotel projects are in the design and/or construction phase, totalling 9,900 rooms, with opening scheduled for the next three years”.