Lisbon’s office market improves in March

The office rental market in Lisbon has continued to improve in the first quarter of 2018 compared like-for-like in 2017 with 17,640 m² leased, up 110% on February 2018 and up 46% on Q1 in 2017. Despite lack of overall supply in Lisbon, companies are adapting to existing available supply.

Office area rented in March 2018 (17,640 m²) was very positive compared to February, (an increase of 110%, corresponding to 8,400m²) and compared to March 2017 (up 46%) which registered 12,117m².

“Q1 2018 ended in March with a recovery on the two previous months, although overall it was 9% below 2017. Despite the obvious and often referred to lack of quality office supply, companies have been adapting to existing market supply and what that can provide. One of the signs of this adaptation is the increase in average surface area contracted which in the first quarter of 2017 was 682m² and this year was 846m², an increase of 25%,” says Teresa Cachada, Consultancy Department analyst at Savills Aguirre Newman.

In the first quarter of 2018 there were 47 leasing operations, 17 down on the same period last year.

The highest uptake was in the CBD (Zone 2) and West Corridor (Zone 6), both with 10 transactions. In the secondary zone (Zone 4), the opposite was true with no transactions in 2018.

Studying the geographic distribution, the Emerging Zone (Zone 3) was the one responsible for most transactions (10,689 m²), 27% of the total. Evaluating take-up per area in 2018,  74% of transactions were over 300 m². Just 12 transactions were below 300 m².

As to average area leased per transaction, this rose 24%, to 682 m² in Q1 2017 to 846 m² in the same period in 2018.

Similar to that seen in recent months, all of the area contracted to date in 2018 referred to used buildings and offices.

The sector “TMT’s & Utilities” registered 10,869 m², responsible for 27% of contracted area.