A Resilient Economic Backdrop
The foundation of this strong performance is Portugal's resilient economy. The nation's GDP grew by a solid 1.9% in 2025, with forecasts projecting an acceleration to 2.3% in 2026. This growth is primarily fuelled by strong domestic demand and healthy private consumption, indicating confidence among consumers and businesses alike.
Inflation is showing signs of moderation, with an expected rate of 2.3% in 2025 and projections falling below the 2.0% mark in the following years. This stabilisation is crucial for long-term investment planning. Furthermore, the labour market remains a pillar of strength; unemployment is projected to decline from 6.1% in 2025 to 5.7% in 2026, ensuring a stable consumer base. Investment and Demand: A Year of Landmark Deals
Leasing and investment activity remained vibrant in 2025, with over 100 transactions completed. A key trend was the market's concentration on large-scale deals. The five largest transactions of the year accounted for a staggering one-third of the total annual investment volume, highlighting the presence of major institutional capital.
The office sector was a standout performer, more than doubling its investment volume compared to 2024. This surge was exemplified by major deals like the sale of the Exeo Office Campus – Lumnia for an estimated €115-125 million and the Torre Oriente - Torres do Colombo, which fetched between €80-90 million.
The retail sector led the market in overall volume, with investment heavily concentrated in prime shopping centres. The sale of a 50% stake in Alegro Setúbal for €55-65 million was one of the year's most significant retail transactions.
Meanwhile, the hospitality sector continued its strong performance, with investor interest firmly focused on upmarket and luxury properties. The sale of the iconic Le Monumental Porto Palace was a highlight, reflecting the sector's premium appeal.
Yield Trends
The report notes a compression of prime yields by 10 basis points in both shopping centres and retail parks during the fourth quarter of the year. Yields in other sectors remained stable, with prime yields currently standing at 5.00 % for offices, 4 .00 % for high street retail, 5.50 % for logistics, 6 .15% for shopping centers and 6 .40 % for retail parks.
