Commercial Real Estate Investment Rises 11% in the First Half of the Year to €1.42 Billion
Commercial real estate investment totalled €1.42 billion during the first half of the year, representing an 11% increase compared with the same period last year. Growth was largely driven by the first quarter, when investment reached €930 million, significantly exceeding the €490 million recorded in the second quarter. According to the latest Market Pulse report published by global real estate consultancy JLL, international investors accounted for 65% of total transaction volume, while domestic investors contributed the remaining 35%.
Retail and hospitality assets represented around two-thirds of total commercial real estate investment, accounting for 34% and 32% of total transaction volume respectively. Growth in the hospitality sector was largely driven by the sale of the Ritz-Carlton Penha Longa Resort and the acquisition of the Corinthia Lisbon Hotel for approximately €150 million.
As of May 2026, Portugal’s hospitality sector had generated €2.36 billion in revenue, up 5.7% year-on-year, outpacing the growth in visitor numbers (+2.4%, reaching 12 million tourists) and overnight stays (+1.5%, totalling 28.7 million). The figures reflect continued revenue optimisation strategies and an increasing focus on the premium and luxury segments. Although occupancy fell to 63%, the national average daily rate (ADR) increased 1.8% to €154, while revenue per available room (RevPAR) edged up 0.3% to €97. Development activity also remains robust, with 84 hotel projects currently under construction, representing 7,970 rooms, of which 56% are in the upscale and luxury categories.
In the retail sector, notable transactions included the sale of several shopping centres, retail parks and Aqua Portimão Shopping Centre. Demand for high street retail space remains strong in both Lisbon and Porto, particularly along Avenida da Liberdade, where international luxury brands continue to show strong interest. Prime retail rents remain at elevated levels, reaching €160/m²/month in Chiado, €65/m²/month on Avenida dos Aliados, €50/m²/month in Clérigos and €90/m²/month on Rua de Santa Catarina.
The industrial and logistics sector attracted 13% of total investment, including the sale of a logistics portfolio valued at approximately €90 million. During the first half of the year, total leasing activity reached 199,180 square metres across 30 transactions. Logistics assets accounted for 82% of total take-up, with Greater Lisbon representing 52% and Porto 25%.
In the office market, Lisbon recorded office take-up of 66,900 square metres, below the levels seen in recent years, reflecting softer demand amid a more challenging macroeconomic environment. Nevertheless, prime office rents remained stable at €32/m²/month, demonstrating continued demand for high-quality office space in prime locations.
In the second quarter of 2026, Portugal’s residential property prices increased 14% year-on-year (while declining 1% quarter-on-quarter). Transaction volumes, however, fell 7% compared with the same period last year, to 75,860 transactions. Existing home sales declined 10%, while new-build sales increased 14%.
In Lisbon, residential prices rose 13% year-on-year to €5,770 per square metre, while transaction volumes fell 11% to 4,080 units. Porto recorded a 9% increase in prices to €4,030 per square metre, with transaction volumes also declining 11%, to 2,650 units.
On the supply side, housing completions increased 4% year-on-year in the first quarter, reaching 6,930 units. Building permits, after declining 3% during the first quarter, recovered to show 3% growth by May, with 18,650 new residential permits issued.
According to Carlos Cardoso, CEO of JLL Portugal, the first-half results reaffirm the Portuguese real estate market’s ability to continue attracting capital despite an uncertain international environment.
The report states: “The outlook for the second half of 2026 remains positive. The market continues to benefit from strong fundamentals, diversified demand and growing interest in high-growth sectors such as data centres.”
Andreia Almeida, Head of Research at JLL Portugal, added that Portugal’s position among Europe’s most attractive investment markets remains an important indicator of investor confidence.
She commented: “Portugal continues to strengthen its position as one of Europe’s leading real estate investment destinations, combining resilience, competitiveness and a strong ability to attract capital. The indicators recorded during the first half of the year point to a positive outlook for investment and market activity throughout 2026.”
The first-half figures highlight the increasing diversification of capital flows within Portugal’s real estate market. Beyond the residential sector, commercial assets such as hotels, retail, logistics facilities and data centres continue to attract significant international investment, reflecting investors’ growing preference for real assets with strong operational fundamentals and stable long-term cash flows.
At the same time, international investors continue to account for approximately 65% of total commercial real estate investment, underscoring their long-term confidence in the Portuguese market. Despite ongoing global economic uncertainty, Portugal continues to attract international capital thanks to its stable institutional environment, resilient tourism sector, and the continued development of its technology and infrastructure industries.
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