With a total of €21.9 billion in investments in 2024, the Southern European regions recorded a 34% increase compared to 2023. Notably, the second half of the year showed a significant rise over the first half, with a 55% increase in volumes, being respectively at €13.3 billion and €8.6 billion.
This positive trend underscores the increasing investor confidence in the Southern European economies and the resilience of their real estate markets, driven by factors such as economic stability, the attractiveness of key sectors like Retail and Hospitality, which have become the leading asset classes in each market, and improved financing conditions. Moreover, growing interest is directed not only towards high-quality assets but also towards buildings with repositioning potential. Significant capital movements are taking place, particularly in the conversion of obsolete office buildings into residential or hotel spaces.
Portugal Investment Market
Investment activity in CRE in Portugal accelerated in the second half of 2024, reaching a total volume of 1.630 €Mn in this period, contributing to a year-end volume of 2.380 €Mn, 39% above 2023. The four most sizable deals represented close to a third of the total volume invested.
Capital allocation by sector reflected the increased interest in the Retail sector, aggregating 50% of the total invested volume, followed by Hospitality. There is a significant interest in alternative assets, with special emphasis in the Purpose-Built Student Accommodation (PBSA) segment. Despite the high occupational activity, the office sector only attracted 13% of the total volume and the low significance of the Industrial & Logistics sector reveals the shortage of quality product for sale in the sector, against a backdrop of high demand.
