Between the beginning of 2023 and April this year, 226 million euros were transacted in commercial real estate in Greater Porto, of which 38 million euros between January and April 2024. Similarly to the trend in Portugal, international investors accounted for 66% of the volume transacted.
The most recent edition of the Porto Market Update, a study developed by Cushman & Wakefield, reveals that the real estate market in the Greater Porto region registered new record values in several segments, especially the residential sector (sale/lease of properties) and the retail sector, with prime rents being adjusted upwards since 2023 and during the first quarter of 2024. This study highlights the resilience of the sector, which remains conditioned by the shortage of supply in the region.
Andreia Almeida, Associate Director, Head of Research & Insight, Cushman & Wakefield, says that similar to the trend seen at national level, as well as in all European markets, institutional real estate investment in the Metropolitan Area of Porto (AMP) fell year-on-year in 2023 and early 2024. "Despite this, in a geography where there is a greater shortage of assets available for this type of investment, the year-on-year drop of 17% in the last 16 months demonstrates the region's greater resilience compared to the market at national level, which contracted by 36% in this period".
Offices with a tendency to recover at the start of the year
The Greater Porto office market recorded a 14% drop in occupancy volumes last year, with 50,050 sqm having been transacted. However, it should be noted that, on the one hand, this figure was achieved despite a significant lack of quality new supply; and, on the other, this drop was significantly lower than that recorded in Greater Lisbon (-59%). In the first four months of the year, Porto saw a trend of recovery, with absorption reaching 21,280 sqm - a year-on-year increase of 82%.
Retail represents 41% of the total invested
The Porto metropolitan area has the second largest volume of commercial complexes in Portugal, with more than 30 projects and 848,000 sqm of GLA. This figure represents 29% of the total national area, only surpassed by the metropolitan area of Lisbon with 48%. With a dozen deals registered in the last 16 months, the retail sector has regained the lead, accounting for 41% of the total invested with 93 million euros.
The municipalities of Vila Nova de Gaia and Matosinhos have the highest concentration of supply in the region, with 220,000 sqm of GLA each; the shopping center format is the most representative, with 86%. For its part, the restaurant sector continued to dominate, accounting for almost half of the number of transactions.
Influenced by rising demand and a shortage of supply, prime retail rents have been corrected upwards in all segments since 2023.
Residential
Over the last 12 months, the market for buying and selling apartments in Porto has seen a downturn in the volume of transactions, although with an increase in average prices, according to data from SIR / Confidencial Imobiliário. As for demand, there was another sharp drop of 18% in the number of homes sold, offset by an increase in transaction values, which rose by 15%. All areas recorded year-on-year increases, with the Foz area regaining the lead. With regard to the private rental segment (or PRS – private rented sector), the imbalance between supply and demand in the city of Porto continued, according to SIR Ci data.
