Portugal has emerged as one of the top destinations for high-yield commercial real estate investments in 2022, according to the MSCI Real Estate Index.
The annual returns from investing in commercial real estate in Portugal increased from 6.8% in 2021 to 8% in 2022. This sector outperformed other asset types such as real estate investment trusts (5.5%), stocks (7.7%), and bonds (-18.7%).
In a year when most other European markets recorded lower returns, Portugal experienced significant growth, as reported by MSCI.
Hotels led the way in profitability for Portuguese real estate, generating a return of 12.5%, nearly tripling from 4.0% in 2021.
Retail followed, offering an 8.5% return for investors in 2022, a notable improvement from 7.3% in 2021. All retail segments, except supermarkets, saw increased profitability: shopping centers rose from 7.3% (2021) to 8.6% (2022), street retail stores increased from 6.8% (2021) to 8.0%, and independent stores grew from 5.4% (2021) to 7.8% (2022). Supermarkets, however, saw a decline from 9.5% (2021) to 7.7% (2022).
Office properties improved by 0.4%, yielding a return of 7.3% for investors. Prime office spaces in downtown Lisbon performed best, at 8%, while Porto reached 7.1%.
The performance of industrial real estate also improved, rising from 7.6% in 2021 to 7.8% in 2022. Properties located in the northern periphery (8.2%) performed significantly better than those in the southern periphery (3.8%).
Alternative assets (in education, healthcare, entertainment, etc.) produced a total return of 4.4% in 2022, maintaining the previous year’s performance. Among these, the healthcare segment stood out with an 8.1% return for investors, while the education sector yielded 7.3%, surpassing entertainment (1.7%) and other segments (1.1%).
Considering the returns from commercial real estate investments in Portugal, it is clear that the country remains an attractive sector for many investors.
As a team of many years of experience, GlobalCiti is planning to offer a comprehensive A-to-Z consultation for our valued clients. With the Golden Visa in hand, you hold the key to an open door to Europe.
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