Investment in commercial real estate for returns up 44% in 2024
Investment in commercial income real estate in 2024 grew by around 44% compared to 2023, totalling more than €2.3Bn according to figures released by CBRE on Tuesday.
The consultancy says that investment is distributed mainly in the regions of Lisbon, which captured 50% of the amount, Porto with 4% and Algarve, which, due to the enormous buoyancy of the hotel sector, captured 8% of the total amount invested. In the hotel industry, CBRE also said that 42% of the capital invested is of foreign origin.
The distribution by sectors positions retail as the star sector for CBRE, namely with 50% of the investment volume and hotels with 23%, followed by the office sector with 14%, student residences accounted for 8% and the industrial and logistics sectors at the bottom of the table, with 4%. Yields have generally remained stable, however, some sectors, such as High Street Retail, Shopping Centres and Student Residences, are already showing signs of a slow down.
During 2024, the consultancy registered a total of 83 transactions, 17% below the previous year. Among the largest transactions of the year, CBRE was involved in the sale of the Conrad Hotel Algarve by ECS to Quinta do Lago. The consultancy also adds that, taking into account the transactions that are in the due diligence phase and the pipeline expected for the rest of the year, 2025 may remain in line with the investment volume of 2024 or even show some growth, albeit slight.
On the occupancy side, offices recorded an increase of 77% in take up (absorption) in Lisbon and 38% in Porto. These figures, which are influenced by a restricted set of large businesses, both in Lisbon and Porto, mark a significant recovery compared to 2023.
The logistics sector recorded an absorption of almost 400 thousand square meters in 2024, 27% higher than in 2023. Prime rents have increased again in several parts of the country and CBRE expects this trend to continue as new high-quality projects come on to the market.
