Portugal Real Estate Investment Hits 10-Year High
Portugal’s real estate market reached its strongest investment performance in a decade in 2025, with total volumes climbing to €2.8 billion, up 22% compared to 2024, according to Dils. The fourth quarter alone generated €895 million, sealing a robust end to the year.
Investment Growth Signals Market Confidence
Despite a challenging macroeconomic and geopolitical backdrop, investor activity strengthened significantly. International capital accounted for roughly 60% of total investment, while domestic funds made a noticeable comeback.
Pedro Lancastre, CEO of Dils Portugal, stated that the increase in investment reflects sustained confidence in Portugal’s property market. The country continues to be viewed as a safe and competitive destination with diversified demand across sectors.
Office Market Leads the Recovery
Offices represented 39% of total investment, making them the leading asset class. Annual office investment reached €666 million, marking a 159% increase compared to 2024. In the fourth quarter alone, €356 million was invested.
In Lisbon, office take-up totaled 72,854 square meters in Q4, bringing the annual figure to 204,241 square meters, 8% below 2024 levels. New companies accounted for 30% of occupied space. The development pipeline in the capital stands at 370,000 square meters, with 125,000 square meters expected for delivery in 2026, more than half of which are already pre-let.
Porto recorded weaker performance, with 43,700 square meters of take-up, down 63% year-on-year. The pipeline totals 131,000 square meters, including 75,600 square meters under construction and 43,200 square meters scheduled for delivery in 2026.
Retail and Retail Parks Benefit from Tourism
Retail assets accounted for 19% of total investment. The sector grew by 6.4% in 2025, supported by strong tourism and increased consumer spending. Domestic investors represented approximately 60% of retail transactions.
Shopping centres reported a 10% increase in sales, while retail parks continued attracting investor interest, with five new projects under development. Yields remained broadly stable, with potential compression expected in logistics and retail park segments.
Hotel Sector Sets New Benchmarks
Hotel investment reached €540 million, up 15% year-on-year. Major transactions included landmark hotel sales in Porto and Comporta. The Cascais Miragem deal recorded the highest price per room ever achieved in Portugal.
Around 2,900 new hotel rooms were delivered in 2025, marking one of the strongest years in recent history. In the fourth quarter, seven new hotels opened, adding 467 rooms, including five-star properties such as The Editory Hotels and Tivoli Kopke Porto Gaia.
Tourism indicators remained positive, with 82 million overnight stays, up 3%, and 33 million guests, up 2%. The U.S. market posted the strongest growth at 7%.
Residential Market Continues Upward Trend
The residential sector maintained upward price momentum due to persistent supply-demand imbalance. The House Price Index rose 4.1% quarter-on-quarter and 17.7% year-on-year.
Lisbon remains the primary focus for end-users, with prime areas averaging €5,200 per square meter and projects priced up to €350,000 gaining traction. In Porto, average prices reached €3,700 per square meter amid resilient domestic demand.
Further south, Troia, Comporta and Melides recorded strengthening domestic demand over the past 12 to 18 months, with prices ranging between €5,000 and €15,000 per square meter. In the Algarve, strong demand was observed in the mid-market segment, with prices from €5,500 per square meter in Portimão to above €13,000 in the Golden Triangle.
As experts at International Investment report, Portugal’s record investment volumes underline the structural strength of its real estate market. Supported by tourism growth, diversified capital inflows and constrained supply in key regions, Portugal remains one of Southern Europe’s most resilient and attractive property investment destinations.