Investment in commercial real estate in Portugal surpassed €380 mln in Q1 2022, nearly double the volume recorded in the same period in 2021, according to CBRE.
The logistics and office segments were among those that attracted the highest investment volume, with six transactions in the logistics segment between January and March 2022.
However, the strong demand for logistics assets continues to exert pressure on prime yields, which dropped 25 basis points over the previous quarter, both in Lisbon and Porto.
CBRE also said that demand in certain areas of the office and food retail sectors is still higher than the available supply.
Nuno Nunes, director of capital markets at CBRE Portugal, said: ‘We anticipate a compression effect, namely in logistics, certain office areas and food retail, supported by an expected rent growth resulting from a demand that, in some cases, is still higher than the available supply.’
The director of research at CBRE Portugal, Cristina Arouca, added: ‘Despite the rise in interest rates, there is still a high liquidity to invest in the real estate sector.’
In its Portuguese real estate market forecast, CBRE says it expects investment volumes to be strong throughout 2022 and to surpass the pre-pandemic €3 bn benchmark, with a possibility of even setting a new record (the previous record from 2019 stands at €3.7 bn).
Offices (+30%) and hotels should attract the highest volume of investments, although logistics will record the highest investment level in history, the firm said.
Lisbon should reach pre-pandemic levels, with around 200,000 m2 of offices occupied, while 61,500 m2 of new office space will be available.
Logistics occupancy should surpass 300,000 m2, while over 380,000 m2 of new storage space is in the licensing phase.
Competition for logistics and also food retail assets should lead to a drop in prime yields.
CBRE expects that new assets will emerge, including affordable homes, senior homes and data centres, while logistics centres and student homes should see strong growth.
A higher number of forward purchase and forward funding operations are likely, especially for alternative assets such as student accommodation and homes for senior citizens.
Sustainability will also be one of the highlights in 2022, with owners, operators and tenants aligning their strategies to ESG, delivering zero-carbon targets.
At the end of 2021, the offering of offices with sustainability certifications amounted to only 4.7% of the total stock.
