The Summer thus closes with more encouraging prospects for this segment. The month of August gave the market a new boost, with the conclusion of 6 operations, two of which above 5.000 sqm, after two consecutive months of negative results, with June and July registering an absorption volume of 5.471 sqm and an 89.8% y-o-y drop.
According to Savills, the aggregated absorption volume from January to August represents a 28.1% y-o-y drop, but the consultant remarked that the market continued registering the conclusion of larger operations and a «resilient will from companies to carry out their plans of moving into new premises».
Up until August, 52% of the absorption volume registered concerned operations above 5.000 sqm. When compared to last year, this type of absorption grew by 8.3%. In total, 6 operations were concluded, with the highlight being BPI occupying Edifício Monumental (16.441 sqm) within the Prime CBD area. In terms of performance by market area, except area 7 (other areas), all the Lisbon office market areas showed drops in terms of activity, especially the Novas Zonas de Escritórios - New Office Areas (-76,8%) and Zona Histórica & Beira-Rio – Historical Centre & Riverside (-70,6%).
Alexandra Portugal Gomes, Associate at the Research Department at Savills Portugal, commented that «four months away from the end of 2020 it is safe to say that the year will close below the occupancy average registered during the last two years of 200.000 sqm, and we can expect a 25% drop in terms of absorption, with 150.000 sqm in office spaces occupied in 2020».
Offices will continue to be essential for companies
Between January and August, 63 operations were concluded, 44% less y-o-y. The Corredor Oeste (Western Corridor) area had 19 operations. The Pharmaceutical and Healthcare segments stood out with increases of 65.6% and 37.8%, respectively.
These numbers do not come as a surprise to Rodrigo Canas, Associate Director at Savills Portugal’s Office Department, according to whom «the numbers should not be seen negatively. The Covid-19 pandemic placed workspaces and the way they are organised and prepared to receive workers safely once again, under perspective».
And he added that «if there are companies which opted for 100% work from home, that will not be the reality of the vast majority of companies in Portugal. The office space will maintain its leadership, since it is not possible to replace all the functions it provides: from the inter-social relation between colleagues to the creative stimulus, brainstorming, exchanging experiences and establishing and maintaining a crucial face to face connection with the clients».
According to Savills, «Covid-19 is an opportunity to reposition not only the companies’ strategies but also those of the office buildings themselves which should now, more than ever, be 100% flexible, with the ability to respond and immediately adapt to future crises».
