Office market slows in Q1

Lisbon’s office market slowed in terms of take-up in the first quarter of 2023 with approximately 20,000 square metres occupied.

The total take-up represented a sharp fall of 69% on the same period in 2022 according to the real estate consultants Savills for the first three months of the year.
When compared with the average of the first quarters over the past five years, the result was equally 55% below the average of 43,900m2. In terms of deals closed, there was a 20% increase on the 1st quarter of 2022.
Despite a greater number of business deals closed, these were mainly for small-sized offices with an average area per deal of around 500m2.
The larger occupation deals to the end of March were seen in zones 3 (New Offices Zone) and 6 (West Corridor) with 3,794m2 and 3,729m2 respectively.
However, the values achieved were not enough to avoid like-for-like falls of around 89% and 19%. In Zone 4 (Historic and Riverside (Beira-Rio) saw a gradual increase in the volume of take-up, closing the quarter with 2,840m2, above the 428m2 closed in Q1 of 2022.
The TMTs and Utilities sector maintains the lead at the top of the table as the most dynamic sector, achieving a take-up rate of 5,699m2.
“The results of Q1 2023 are quite normal and to be expected when looked at in the optic of the current economic climate. The sharper fall should take into consideration the comparative base which is quite high. 2022 was the year of pre-rentals which inflated the volume of take-up over all of the quarters, bringing more pressure to bear on the 2023 numbers”, explained Frederico Leitão de Sousa, Head of Corporate Solutions at Savills Portugal.