Portugal's commercial real estate market saw its best year with a 154 percent increase in investment in 2015. Investment in the commercial property sector rose to almost €2 billion, reports say.
According to Iberian Lawyer, commercial real estate market in the country reach an all-time high last year, recording as much as €1.9 billion worth of deals. As per the report of consultancy firm B. Prime, majority of the investment in the sector came overseas, accounting for 92 percent, 43 percent of which came from the United States, The Portugal News reported.
In growth in the sector is largely attributed to the economic recovery of Portugal and the return of investor confidence. The devaluation of euro against dollar also contributed along with the already low levels of return in the U.S. domestic markets. Additionally, Portugal's golden visa program also helped increase activities in the market as it was able to approve 760 visas in 2015. High-end value homes also received a large proportion of investment.
Leading law firms, which are benefitting in the CRE growth as it brings a surge in instructions too, are expecting the trend to continue. "We started feeling the first signs of recovery in 2013, when investors regained confidence in the market and returned," said Tiago Mendonça de Castro, a partner at PLMJ and head of the firm's real estate practice in Lisbon.
Meanwhile, Cushman & Wakefield said that portfolio transactions nearly doubled the average transactions to about €32 million last year. With this strong demand, Cushman & Wakefield said the level of commercial real estate investment in the country shall continue throughout 2016 and it is possible that a new record-high investment volume will be attained.
On one hand, the high demand is already putting some stress to the supply and so renovations and construction restarted. Old buildings are being transformed into hotels to meet the demand brought on by a boom in the tourism sector, Iberian Lawyer reported.