Commercial real estate investment down 46%

In the first nine months of this year, commercial real estate investment in Portugal amounted to €1.05 billion, down 46% compared to the same period in 2022. Such data is contained in the latest JLL Market Pulse report. This outflow is due to a "more cautious approach by investors" and a "delay in the execution of many transactions, reflecting the growing uncertainty due to the macroeconomic and geopolitical environment," the consultancy said in its report. This is a "global trend that also affects Portugal".

According to Pedro Lancaster, executive director of JLL Portugal, "the third quarter results are not surprising" because "economic cycles affect real estate, and by the end of the first''half-year has already seen a slowdown in trading and investment activity'." "Even though inflation pressures are easing and the ECB did not raise interest rates at its last meeting, there is still a lot of uncertainty about macroeconomic developments and how real estate buyers, whether companies or families, and banks will adapt," Pedro Lancaster observed, his words reported by the press office. He also noted that the mood in real estate "prevails globally, not just in Portugal".

According to Joana Fonseca, head of strategic consulting and research at JLL, especially in the office and residential segment, "the main impact of this tense environment is evident in the loss of volume, with fewer transactions taking place than the average of previous years." "Indicators of value, i.e. prices and rents, remain stable or even rising, with a few adjustments in some secondary segments and locations," it added.

The JLL report also indicates that in the third quarter of this year, house prices in Lisbon remained stable at 4,580 euros per square meter. In Porto, prices stand at 3,020 euros per square meter, down 2% year-on-year, reports''consulting firm.

Pedro Lancaster said that the country still faces a serious supply shortage, which is supporting price levels while activity is declining. However, he warned that "the most worrying thing is that there are no incentives in place to stimulate supply growth in the near to medium term, especially in housing, where a shortage of properties is underpinning the market's price rises and restricting access for many consumers." "The creation of new supply must be done by private companies, but conditions must be created to ensure that these investments are realized," he stressed.