PORTUGAL Trends and Developments Contributed by: Francisco Lino Dias, Teresa Madeira Afonso, Diogo Neves and Maria Sanches Afonso, PLMJ
Although there was a general decline compared to 2022, there was an increase in the volume of property transactions in the hospitality sec - tor, which exceeded the figures recorded in 2019 (pre-pandemic period). Hospitality sector accounted for around 40% of the total com - mercial market. Revpar (revenue per available room) grew by 16%, to EUR72.1, and the occu - pancy rate (per room) stood at 66%. Portuguese hotels recorded approximately 70 million over - night stays, which reflects an increase of around 10% compared to 2022. In Lisbon there was an occupancy rate of around 75% and in Oporto there was an occupancy rate of around 71%. In 2023, there was a downturn in purchase and sale activity in the residential market. Compared with 2022, there was a drop of around 15% in the number of residential properties sold in Por - tugal. There was also marked pressure on prices in the residential market – with an average price increase of around 5% – as a result of demand considerably outstripping supply. This scenario raises numerous challenges in terms of access to housing. Another consequence of the shortage of sup - ply is the increase of rent in all sectors. Prime office rent has reached a maximum of EUR28 per square metre per month. In the I&L sector, rents reached EUR4.75 per square metre per month. In the retail sector, rents increased by approximately 9%. The first half of 2024 is still expected to be characterised by some stagnation, followed by a gradual recovery during the second half, with an increase in the volume of investments of up to 15% compared to 2023. In the commercial market, in transactions involv - ing I&L assets, secondary areas are expected to
grow exponentially – given the growing demand and saturation in conventional areas. The hospitality sector is expected to remain a sector of strong interest to investors. Investment in shopping centres is expected to increase and, as far as offices are concerned, it is estimated that around 40% of the offices planned for 2024 and 2025 are already pledged. In the residential sector, there will continue to be a shortage of supply compared to demand – despite the approval of the Urban Planning SIM - PLEX (detailed below), which will have a con - siderable impact on speeding up and reducing bureaucracy in urban planning procedures. Sustainable investments that comply with ESG standards are gaining momentum and significant investments of this nature are to be expected in 2024. Portuguese Real Estate Legal Ecosystem Housing remains the hot topic in Portuguese real estate for 2024. The Portuguese government has identified the housing crisis as one of the main pillars for intervention and introduced a multi - tude of legislative reforms with impact on the Portuguese real estate market. Those reforms will require all stakeholders and legal advisers to update their legal knowledge, adapt their per - spectives and manage ongoing transactions. New legislation Mais Habitação programme As anticipated, the Mais Habitação (“More Housing”) legislative programme – comprising a series of structural measures, including sev - eral tax measures that revolve around the chal - lenges and solutions to the housing crisis – was
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