18 October, 2025

| Insight

The first half of 2025 (H1 2025) was a period of strong recovery and market resurgence for Portuguese commercial real estate, with the total investment volume soaring to €1.23 billion—a remarkable 69% increase year-on-year. But within this growth, one asset class stood head and shoulders above the rest: Retail.

In a decisive market shift, the retail sector didn’t just participate in the rebound—it led it, solidifying its position as the best-performing asset class by investment volume. Retail emerged as the undisputed investment king, achieving a colossal €616 million in capital inflows. This figure not only captured 50% of the total commercial real estate market share but also represented an astounding 360% increase compared to H1 2024.

Retail’s Reign: Investment Volume Analysis

This dramatic growth was primarily driven by key factors that underpinned investor confidence:

  • Robust Tourism: Historic tourism flows continued to sustain strong consumer demand.
  • Footfall Recovery: A marked recovery in footfall and sales across shopping centers fueled operational confidence.
  • Sustained Consumer Activity: Despite broader economic concerns, consumer activity remained resilient.

A Stable Picture on Prime Yields: The Details

The high volume of transactions and strong investor demand translated into a generally stable environment for prime yields across most retail sub-sectors by Q2 2025, though notable movements were recorded within specific segments.

For the largest assets, prime Shopping Centers and Retail Parks, the prime yields remained stable, holding at 6.50% and 7.00%, respectively. This stability reflects solid operational confidence in these formats.

However, the High Street segment proved to be particularly attractive to investors, seeing a significant 50 basis point (b.p.) compression in its prime yield over the half-year. This downward pressure, which reflects rising asset values, pushed the yield down to 5.00%, indicating heightened competition for premium urban retail space.

Conversely, the Supermarkets segment experienced a slight yield expansion of 0.25 percentage points (pp) quarter-on-quarter, reaching 6.00%.

In conclusion, while the Office and Industrial sectors also contributed to the overall market increase, it was the unprecedented 360% surge in retail investment that defined the first half of 2025, firmly positioning the Portuguese retail asset class at the forefront of the country’s real estate investment landscape.

Ready to capitalize on the yield movements in this resilient segment? Discover current Portuguese supermarket investment opportunities here.