Economic Context
Portugal's economy demonstrated steady growth in 2025, with GDP expanding by 1.9%. Forecasts anticipate even stronger performance in 2026, with a projected growth of 2.3%. This economic upswing is complemented by moderating inflation, expected to settle at 2.3% in 2025 and dip below the 2.0% mark in subsequent years, fostering a stable economic environment. The labour market remains robust, with unemployment projected to fall from 6.1% in 2025 to 5.7% in 2026. This positive trajectory, driven primarily by strong domestic demand and private consumption, sets a promising stage for the commercial real estate sector.
Office Demand Holds Strong Despite Minor Dip
The Greater Lisbon office market recorded solid activity in 2025, with a total take-up of 204,240 sq m across 169 deals, representing a slight 8% year-on-year decline. This market finished the year registering 54 deals totalling 72,850 sq.m in the fourth quarter.
Lisbon's Central Business District (Zone 2) was the undisputed hub of activity, capturing an impressive 46% of the total demand. This was largely propelled by two landmark transactions: the occupation of a 34,200 sq m space at João XXI and Banco de Portugal’s acquisition of a 32,000 sq m property at Entrecampos. Following behind, the modern Parque das Nações (Zone 5) attracted 18% of the market's demand.
From a sector perspective, the "Government, Europe & Associations" segment was the most active, accounting for 33% of the total take-up. The "Company Services" sector was also a significant driver, making up nearly 24% of the demand.
Other notable transactions in Q4 that underscored the market's vitality included a confidential 3,200 sq m let in Saint-Léger (Zone 4) and a 3,100 sq m let secured by IDEA Spaces in the Báltico building (Zone 5).
Vacancy Rates Tighten in Core Areas
The overall vacancy rate in Greater Lisbon saw a marginal decrease, ending the year at 7.0%. However, this figure masks significant variations between submarkets. The Western Corridor (Zone 6) continues to register the highest vacancy at 14.3%, whereas the high-demand Central Business District (Zone 2) posted a remarkably low rate of just 3.6%. This tightening availability in prime central zones indicates strong, sustained demand that is rapidly absorbing available stock.
Prime Rents Continue their Upward Climb
Reflecting the strong demand for premium office spaces, prime rents continued their upward trajectory in key submarkets. In the Prime CBD, rents escalated to €32.00/sq m/month. Similarly, the broader CBD saw rents rise to €28.00/sq m/month, while Parque das Nações commanded rents of €22.00/sq m/month. The consistent increase in prime rents across Lisbon's most desirable areas highlights the market's strength and the ongoing demand for high-quality, well-located office environments.
Robust Construction Pipeline Signals Future Growth
The construction pipeline in Greater Lisbon remains dynamic, with 61,200 sq m of new office space delivered in 2025. Among the key completions was the Camilo Castelo Branco 46 project in Zone 1, which added 6,315 sq m of office space to the market.
Looking ahead, the development forecast is robust. An estimated 327,860 sq m of new office space is slated for completion over the next three years. Of this, 294,170 sq m is already under construction, and a remarkable 37% is already pre-occupied. This high pre-let rate reflects strong market confidence from both developers and tenants, who are keen to secure future space. With key developments planned across both established central zones and emerging office districts, the supply pipeline points to balanced and sustained growth for the Lisbon office market in the years to come.
