Commercial property investment in Portugal in 2017 continues strong after the very intense activity registered in 2016. Last year 1.3 billion euros were transacted in commercial real estate assets in Portugal – the second highest value ever achieved. According to Cushman & Wakefield research data, 2017 is expected to reach a new record.
To date 10 investment deals were closed in Portugal, representing about 180 million euros. There are also a considerable number of transactions close to completion totalling an estimated investment volume of 600 million euros, which leads us to expect a first half of the year closing near the 800 million euro mark - one of the best first semesters ever registered.
Foreign capital remains strong in the market, with a share of 70% of the total investment. The office sector is the most attractive to investors, reaching 100 million euros, with a large contribution from the biggest deal to date, the sale of the Entreposto building for 65.5 million euros.
Considering the visible pipeline, 2017 should have a similar distribution per sector as 2016 with retail and offices capturing the majority of capital, and hotels and logistics raising less interest.
In 2016, the Portuguese market yields observed a sharp correction; currently prime yields are at 4.9% for offices, 5% for shopping centres, 4.75% for high street and 6.5% for industrial. The forecasts point to a less noted correction, or even stability, with a higher likelihood of asset value rises t through rent increases, particularly in high street retail and offices.