In the first half of 2023 Lisbon’s office market suffered a nose-dive of 77% in relation to the same period in 2022 and fell 17% in Porto.
The Lisbon take-up for the period was 38,000m2 while in Porto it stood at 25,184m2. According to Savills Portugal the reason is a lack of quality stock and companies dragging their feet when it comes to taking decisions on renting out new office space. However, Savills points out that the second half of the year should see the market moving again.
In Lisbon, Parque das Nações (Zone 5) and the West Corridor (Zone 6) saw the greatest up-take with over 40% of total rentals, each with 25% and 18% respectively.
However, all zones in the market saw a decline in take-up compared with numbers over the past 5 years. The Prime CBD (Zone 1) and the New Office Zones (Zone 3) suffered the biggest falls in take-up a over 70%.
Even though the volume of take-up has fallen over the past six months, prime rents remained stable at €27 per month per m2 because of a scarcity of quality product and strong demand from companies, especially larger ones that are demanding in terms of ESG criteria and sustainability.
The TMTs and utility sectors (13,065m2) continued to drive the offices market in Lisbon, while in Porto, even through take-up was down 17% on H1 in 2022, the take-up rate was 9% above he average take-up registered for the past four years.
This result was achieved thanks to 32 deals (seven of over 1000m2) that raised the average take-up rate for the first half of the year to 787m2.