Portugal Commercial Property Guide

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Since the economic crisis in 2008, the Portuguese economy has grown steadily and shows no signs of slowing down. GDP rose by 2.2% between 2018 and 2019 whilst unemployment dropped to 6.13% in 2019 – the lowest it has been since 2003. The property market has followed this rhythm, with commercial properties in Portugal entering the cycle at a later stage.

Since the economic crisis in 2008, the Portuguese economy has grown steadily and shows no signs of slowing down. GDP rose by 2.2% between 2018 and 2019 whilst unemployment dropped to 6.13% in 2019 – the lowest it has been since 2003. The property market has followed this rhythm, with commercial properties in Portugal entering the cycle at a later stage.

Portugal’s commercial property market entered 2020 in a healthy state with strong occupancy rates, limited supply and rental growth. 2019 was a record-breaking year with commercial property sales in Portugal exceeding €3.5bn. Plus, in 2019 a further €1.5bn was invested in land for development and assets for renovation.

Even though Portugal’s property market cannot escape the impacts of the COVID-19 (coronavirus) crisis, the general market outlook is still optimistic. Early reports have shown that thanks to the sustained demand for properties in Portugal and the country’s exemplary management of the outbreak, Lisbon is one of the four cities where prime property prices are expected to rise in 2020.

Another reason for investing in commercial property in Portugal is that there are numerous incentives for investors such as the NHR (Non-Habitual Resident) programme which can reduce tax exposure and the Portuguese Golden Visa programme which offers residency to investors and their immediate family.

Take a look at our commercial properties for sale in Portugal or get in touch with David Moura-George to find out about off-market opportunities..

Reasons to invest in commercial real estate in Portugal

As well as diversifying an investment portfolio, commercial real estate is great for generating consistent long-term yield and is a secure asset during both high and low cycles.

Hedge against inflation

One advantage of investing in commercial real estate is that it can offset the impact of inflation over time as investors can increase their rental prices to reflect the inflation rate.

Long-term strategy: generate strong and reliable returns

Buying a commercial property in Portugal can enable investors to generate long-term and consistent revenue which can be received monthly, quarterly or annually. Plus, it is also possible to benefit from capital appreciation when selling the asset in the future.
Commercial yields can often outperform residential yields and the average commercial rental yield is between 4 and 7% in Portugal.

Tangibility: diversify an investment portfolio

Unlike shares and stocks which can be here one day and gone the next, commercial real estate is praised for its tangibility and provides better financial security than investing in financial markets. Commercial real estate is a great way to diversify an investment portfolio to ensure that it comprises both hard and intangible assets.

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The diversity of Portugal’s commercial property market

Spanning a whole range of industries from restaurants and hotels through to logistic and office spaces, Portugal’s commercial real estate market is exciting and dynamic with each industry offering its own unique opportunities and trends.

“The Portuguese commercial real estate market has registered a very strong demand from international investors over the past few years. The biggest demand in 2019 was for office spaces and logistic properties. There was also an increased interest in student accommodation, co-living properties and senior homes.”

David Moura-George, Director of Portugal

Ways to invest in commercial real estate in Portugal: types of commercial property

Office space

One of the most popular types of commercial properties, offices in Lisbon are particularly popular with foreign investors, accounting for 80% of total transactions in 2019. With limited supply and more and more international companies looking to establish a presence in the capital, investing in office buildings in Portugal can enable investors to generate rental yields of 4-6%.

The total sum invested in offices in Lisbon reached €982m in 2019, which is more than double the total for 2018. Prior to the COVID-19 pandemic, the first quarter of 2020 saw 44,000 sqm of office space in Lisbon occupied which is 5.2% higher than Q1 2019.


A dynamic sector with a wealth of opportunities for investors, retail property investment can be anything from a hands-off long-term secure asset with blue-chip (AAA) tenants like Pingo Doce or Continente to something riskier which allows for lease regearing or is vacant with the opportunity to change its use.
The retail property market is particularly interesting in Portugal as the e-commerce industry, though growing, is still very modest with a market penetration of just 47% in 2019. In comparison, the UK had a penetration rate of 81% at the same time. In 2019, the average rental yield for retail properties in Portugal was 4-7% and shopping centres had a higher rental yield of 5-7.5%.

Industrial and logistics properties

This sector comprises mainly assets used for storage, distribution or assembly but may also include properties which can also be a mix of office and industrial space. Logistic properties in Portugal normally benefit from long leases of up to 25 years and good rental yields of 6-7.5%.


With a warm climate, a diverse landscape and a unique culture, Portugal is a popular destination for tourists, especially those from the UK, Germany and Spain. In 2019, the country welcomed 27m tourists, a 7.3% increase on the previous year.

Multiple residential properties & plots for development in Portugal

As well as regular multi-family properties, this exciting sector also encompasses student housing and nursing homes. Residential development in Portugal is set to rise in 2020 with 14,000 units submitted for licensing in the Lisbon Metropolitan Area in 2019, a 5% increase on the previous year. In the Porto Metropolitan Area (PMA), the number of units submitted for licensing in 2019 was up 50% on the previous year with 9,800 units submitted.

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How much does it cost to buy a commercial property in Portugal?

When buying a commercial property in Portugal, there are a number of additional fees and taxes investors will need to take into account. We have outlined the key costs below. Please note that IMT, IMI and financing expenses will be worked out on a case-by-case basis.

  • IMT: Up to 6% of the sale price
  • Stamp duty: 0.8% of the sale price
  • Office / registry / lawyers: approx. 1% of the property value
Company running costs
  • Tax: 21.5% of the company's earning
  • Accounting: €200/month (average)
  • Additional fees: 1% annual management fee for funds only
  • IMI: 0.3-0.45% of the market value
  • Insurance: Depend on the property size and type 
Financing (varies case by case)
  • Up to 50% LTV
  • Up to 10 years

Effects of COVID-19 on the commercial property market in Portugal

The Portuguese government has been praised throughout the world for their quick response to the COVID-19 pandemic and the government has introduced a number of financial measures to help protect families and businesses during this period of uncertainty. Portugal’s commercial property market had a strong start to the year with €800m in sales in just the first two months. It is expected that total commercial sales for 2020 will reach €2bn. Though not as strong as 2019, this is substantially higher than the total in 2007 (€1.3bn) which was the best year before the economic crisis.

If you would like to find out more about off-market opportunities, please get in touch with David Moura-George to book a meeting.