Commercial real estate investment doubles
Commercial real estate investment continues at an impressive pace in Portugal, showing the sector’s resilience. From January to March 2022 alone, this investment stood at 380 million euros, almost double the amount recorded in the first quarter of 2021, according to multiple news repots quoting CBRE.
The American commercial real estate services and investment firm giant pointed out that the “Investment in commercial real estate reached 380 million euros in the first quarter of 2022, almost double compared to the same period of the previous year”. Data from CBRE suggests that the logistics and office segments in the country are among the asset classes that attracted the highest volume of investment.
In the meanwhile, the National Statistics Institute (INE) of Portugal has pointed out that the commercial real estate prices in Portugal increased by 5.1 percent in 2021, accelerating by 2.3 percentage points compared to the 2020 change and reaching the highest increase since 2010.
According to the data released by the country’s statistics body, the 5.1 percent increase reflected an acceleration of 2.3 percentage points compared to the variation in 2020 and reaching the highest increase since 2010.
Nonetheless, INE highlights that "as has been the case since 2016 the growth in commercial property prices was less intense than that observed in housing (9.4%)." In 2020 housing prices rose by 8.8 percent implying that the 5.1 percentage growth in non-housing property prices comes after two consecutive years (2019 and 2020) of deceleration in the commercial property price index, or IPPCom.
The residential property market, whose behaviour is captured by the House Price Index (HPI), presented a price growth of 9.4%, above that registered by the CPPI. In 2021, the growth rates of the two indicators recorded the lowest differential since 2015, 4.3 p.p., 1.7 p.p. less than in 2020, INE notes.
Commercial Property Price Index (CPPI) and House Price Index (HPI), National total, 2009-2021
The statistics institute also observes that "the residential property market, whose behaviour is reflected by the Housing Price Index (IPHab), showed price growth of 9.4%, above that recorded by the IPPCom. In 2021, the growth rates of the two indicators recorded the smallest differential since 2015, 4.3 percentage points (p.p.), 1.7 p.p. less than in 2020."
The main purpose of the Commercial Property Price Index (IPPCom) is to measure the evolution of the prices of commercial properties transacted in the national territory.
Similarly to the Housing Price Index (IPHab), disclosed by INE since July 2014, the IPPCom compilation uses tax administrative information from the municipal tax on property transfers (IMT) and the municipal property tax (IMI), sent monthly to INE by the Tax Authority.
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