The current weak activity in this sector is due to higher unemployment and the uncertainty and lack of confidence, which is continuing to affect the domestic and European economy. Most decisions taken by companies to opt for new office space are driven by cost-cutting strategies, which in many cases involve renegotiating contracts or staff downsizing processes, which can sometimes lead companies to move to smaller premises. Transactions driven by the need to expand area or to open new companies in large areas have been few in Portugal since 2008, with residual activity helping maintain high levels of availability and pressuring prices.
In the first semester of 2013 the average vacancy rate in the office sector stood at around 13%, with zone 6, in the West Corridor, having the highest vacancy rate in both percentage terms (20%) and volume, with around 190,000 m2 of office space available.
In terms of market values, the prime yield stayed at 8.5€/m2/month in June 2013.
According to Carlos Oliveira, partner and head of C&W office agency department, “The forecasts for 2013 do not yet suggest the situation experienced in recent years will be turned around, although the ongoing pace of depression seems to have slowed, and we will properly see a modest upturn in demand for offices in the coming year, although prices will still be subject to pressure".
“The fact that speculative construction has been brought to a virtual standstill has prevented availability levels rising significantly, despite the low take up”, concludes Carlos Oliveira.