Foreign Investors Drive 10% Surge in Portugal’s Commercial Property in 2025

A 10 % jump in commercial property deals during 2025 has quietly moved Portugal into the European premier league of real-estate destinations. Money is pouring in from abroad—more than 60 % of all transactions—reviving cranes in Lisbon, Porto and the Algarve, pushing up prime rents and redrawing the skyline just as interest rates start to retreat.

Quick takeaways

• €2.67 B invested in commercial bricks and mortar last year, an all-time high for the post-pandemic cycle.

• Foreign buyers supplied roughly two-thirds of that capital, led by funds from the US, UK and Germany.

• Retail, offices and hotels absorbed three-quarters of the cash, while logistics and ativos alternativos such as student housing climbed more slowly.

• Prime yields compressed to 4 %–6.5 %, confirming brisk demand for well-located assets.

• Consultants expect another 8 % rise in 2026 if the European Central Bank cuts rates as flagged.

Foreign capital keeps the cranes busy

Global funds regard Portugal as a “safe-yield haven” in a jittery Europe. According to data compiled by Cushman & Wakefield, cross-border investors accounted for 60 %–65 % of the € volume in 2025. Lifestyle advantages, a transparent legal system, relatively low asset prices, the lingering Golden Visa halo and high-speed digital connectivity all ranked high in due-diligence checklists. Even with the residential leg of the Golden Visa curtailed, corporate-owned vehicles continue to channel money into flagship retail blocks on Avenida da Liberdade, tech-savvy offices in the Parque das Nações and boutique hotels along the Algarve’s Ria Formosa.

Inside the numbers: how much and where

Lisbon hoovered up nearly half of the capital, but Porto (18 %) and the Algarve (14 %) recorded their busiest years on record. Cushman & Wakefield and CBRE peg the national total between €2.56 B and €2.80 B—a spread that reflects late-closing portfolio trades in December. Either way, the consensus is clear: 2025 out-performed 2024 by about 10 %. Prime retail captured 29 % of funds, offices clocked in at 26 %, and hotel assets grabbed 20 % thanks to record tourism nights. Student-housing developers and senior-living operators made up most of the 13 % alternative slice, while industrial & logistics drew 11 % after a slower second half.

Sectors on the rise, sectors recalibrating

Retail’s rebound continued for a second year as tourist foot-traffic pushed shopping-centre sales up double digits and street-level rents in Chiado hit €140/m². Office landlords enjoyed rising prime rents—€34/m² in Lisbon Core—despite a dip in net absorption, a consequence of corporate “wait-and-see” policies early in 2025. Hotels remained the headline act: more than 80 new properties and 4,800 beds came on stream, propelled by occupancy rates above 76 %. Logistics cooled after a record 2024, yet demand for last-mile hubs near Gaia and Grândola kept yields firm.

Yield picture and financing climate

Across most segments, yield compression resumed as financing costs eased. Street-retail ended the year around 4 %, centres commerciaux at 6.15 %, Lisbon offices stuck to 5 % while Porto offices paid 6.5 %. Industrial parks near the A2 corridor traded at 5.5 %. Mortgage desks at the big banks report that euro-swap rates are already pricing in two ECB cuts for mid-2026, a shift that could shave 50–75 bps off loan coupons and support further price acceleration.

What changes in 2026 for residents and businesses

For everyday residents, the foreign-led boom translates into new jobs in construction, hospitality and retail, but also into tougher competition for central storefronts and potential traffic disruptions near large projects. Entrepreneurs, on the other hand, benefit from revamped high-street stock, more co-working inventory and better access to international financing partners. Municipal planners in Lisbon and Porto are already debating height limits and green-building quotas to balance growth with liveability.

The view from the ground: brokers and economists

"Portugal has crossed the threshold from ‘interesting niche’ to core European market," says Joana Correia, capital-markets director at a Lisbon brokerage. Economists at Banco BPI add that a predicted 0.9 % GDP uptick could be doubled if the real-estate cycle keeps foreign cash circulating through local supply chains. Nonetheless, they caution against "over-reliance on external capital" and urge policymakers to nurture domestic pension funds so that Portuguese savings share more in the upside.

Industry insiders see sustainability retrofits, mixed-use masterplans and the conversion of obsolete offices into housing as the themes likeliest to attract 2026’s record liquidity. For now, the cranes keep moving, and Portugal’s commercial property market shows no sign of putting away the scaffolding.