IP03

2017 / iberian.propery // 59

ISSUE: TOP IBERIAN cities //dossier

OFFICES

Demand

: The nearshore sector has had enormous

impact on Lisbon’s office market, and is responsible

for the take-up of more than 200.000 m² between

2009 and 2016, in other words, approximately 30% of

take-up during that period, according to calculations

by CBRE. And this trend is here to stay.

• +2% Take-up: 87.316 m² in 2017 (until the end of July)

• 39% of the area taken up (until July 2017) originated

from the expansion of companies already

established here or companies that chose Lisbon

to set up their business

• 40% of take-up in 2017 (until July) was carried out by

the TMT & Utilities (21%) sectors and Financial Services

(18%), in other words the fields of a large part of the

shared services centres that have set up in Lisbon

Supply

: the market’s recovery is still not reflected in

the development of new projects, which remains at

one of the lowest rates ever. However, the continuous

drop in the vacancy rate, along with the fact that

there are few projects in the short term pipeline, is

putting pressure on supply, especially for large scale

operations. Added to this, there is a need to diversify

investment in real estate development, as well as

in tourism and the luxury residential market, and

we should soon be witnessing a new wave of office

development in Lisbon that will satisfy the needs

of companies who want to settle in the city. In any

case, the tendency will involve a more conservative

approach from developers, who will favour a pre-

lease regime more than ever.

• Stock: 4.6 million m²

• Vacancy rate: 8.8%

• Pipeline: 59.000 m² under construction, with 71%

guaranteed occupancy

HIGH STREET RETAIL

Benefitting from the rise in tourism, a greater commitment to urban

regeneration and amendment of the lease laws, in the midst of full

economic recovery, high street retail is today a consolidated retail

format in Lisbon, playing a fundamental role in the development of the

city centre. The sector’s growth also benefitted the market as a whole,

helping diversify and specialise supply.

100

100 new operations | Demand:

in the 1st semester,

100 new rental operations were completed in Lisbon,

of which more than 20% were in the Chiado zone.

We also note the change in the retail mix brought

about by the tourism boom, with a strong increase in

demand from operators in the F&B business (+ 64%).

17 new shops until 2018 |

Supply: on Avenida da

Liberdade alone, the prime zone for the capital’s

luxury retail, approximately 17 new shops are expected

to open between 2017 and 2018, in completely

regenerated buildings. In Chiado, particularly on Rua

Garret, few available spaces are expected to emerge,

and those that do enter the market will be taken up

rapidly, helping expand the market to adjacent zones

(Baixa & Principe Real), but also to other parts of the

city, like Restelo, Alvalade and Avenida de Roma.

,5%

Rents rise |

Chiado is the high street retail location

with the highest rent increase in Europe in the 2nd

quarter, according to Cushman & Wakefield. At 115€/

m² per month, the prime rent in the leading zone in

the Portuguese capital’s high street retail rose 9.5%

compared with March 2017 and 15% with the same

period the previous year, against an average increase

of only 0.2% in Europe. Average rents vary between

50 and 55€/m² in that location.

,5%

Yield |

Reinforcing this persistent appreciation

of Lisbon’s high street retail, the reference yield

demanded by investors for top assets is currently 4.75%.

Rents (€/m²/Month)

1st Sem 2017

Zone

Average

Prime

1- Prime central business district

17,50 € 19,50 €

2- Central business district

15,00 € 16,50 €

3- New office zones

12,50€ 15,00 €

4- Secondary office zones

14,00 € 16,00 €

5- Parque das nações

15,50 € 17,00 €

6- Western corridor

9,75€ 13,00€

sources: LPI – Lisbon Prime Index, JLL, Aguirre Newman, Cushman &Wakefield, CBRE