Portugal Market Outlook 2019
CBRE foresees that the investment volume will remain high, in historic terms, although a decrease is expected when compared to 2018. The lack of income assets should leverage the investment in development projects.
In the office market the shortage of new supply will continue throughout 2019, namely in Lisbon, leading to further rental increase and take-up reduction.
The growth of online purchases, the changes in consumption and lifestyle habits will continue to have a relevant impact on physical commerce, namely with operators streamlining the network and increasing the shop area, as well as shopping centres diversifying the tenant mix. High street prime rents are expected to increase.
There is also a lack of spaces available to let in the logistics market, both in Lisbon and Porto, and this shortage will limit take-up during 2019, with an expected fall in comparison to 2018. The development of light industrial warehouses in inactive manufacturing facilities, located near major urban centres, are an opportunity to accommodate the demand from small and medium enterprises and urban logistics operations.
Residential demand is expected to maintain the growing trend over 2019, with the domestic market gaining a higher share comparing to foreigners. In Lisbon, a supply increase is predicted, although it is still very low to accommodate the latent demand. The average price in the city is likely to start falling as new large scale development projects will start in zones out of the city centre.
In tourism, hotel demand will remain stable. In Lisbon, current occupancy rate is high and the lack of capacity in the airport conditions demand growth, driving the increase of the average room rate. However, supply is likely to grow more than in 2018, both in Lisbon and Porto, with a number of international brands entering the country.