Economic Context
Portugal's economy continued its positive trajectory in the first quarter of 2026, demonstrating sustained momentum. The Gross Domestic Product (GDP) grew by 2.3%, a figure that notably outperforms the Euro Area average. Inflationary pressures have eased, with the rate moderating to 2.3% in 2025. Projections indicate that inflation will stabilise below the 2.0% mark in the coming years, although a temporary increase to 2.6% is anticipated for 2026. The labour market has shown resilience, with the unemployment rate expected to fall to 5.7%. However, the pace of job creation is projected to slow, with an anticipated growth of 1.3%.
Demand Overview
The Greater Lisbon office market experienced a period of robust letting activity during Q1 2026. A total of 39 new deals were finalised, contributing to a total take-up of 28,910 square metres. This represents a remarkable 80% increase when compared to the same period in the previous year. The average deal size also saw a significant increase, rising to 740 sq.m from 500 sq.m in Q1 2025.
Several noteworthy transactions defined the quarter, including Jerónimo Martins letting 4,700 sq.m at the new Campo Novo - Building 1. Additionally, a confidential tenant from the TMT & Utilities sector secured a 2,840 sq.m lease in the Arts Business Centre, and a 1,890 sq.m lease was signed at the Roche building.
Demand was geographically concentrated in specific submarkets. The New Office Areas (Zone 3) captured the largest share of activity, accounting for 37% of the total take-up. The Western Corridor (Zone 6) followed, with 24% of the total volume. From a sector perspective, the TMT‘s & Utilities industry was the primary driver of demand, representing 32% of the quarterly take-up, with the Company Services sector coming in second with 18%.
Vacancy Trends
The overall vacancy rate across Greater Lisbon saw a slight but positive decline, settling at 6.8% at the end of the quarter. This rate varies significantly between submarkets. The Western Corridor (Zone 6) recorded the highest vacancy at 13.3%. In contrast, the Central Business District (Zone 2) and Secondary Office Locations (Zone 4) maintained exceptionally low vacancy rates of 3.4% and 3.3%, respectively. The market continues to absorb new supply effectively, and there has been no significant impact from sub-let space becoming available.
Rent Trends
Prime rents demonstrated stability across most of Lisbon's office zones. In the Prime CBD (Zone 1), top-tier rents held firm at €32.00/sq.m/month. The only notable movement was observed in the New Office Areas (Zone 3), where prime rents increased to €22.00/sq.m/month, reflecting strong demand in that submarket.
Total and Under Construction Pipeline
Development activity in the Lisbon office market remains high. Six new buildings reached completion in Q1 2026, adding a substantial 41,750 sq.m of new office space to the market. The construction pipeline is robust, with 252,320 sq.m currently under development, of which 29% is already pre-let. Looking forward, a total of 286,050 sq.m is scheduled for delivery over the next three years.
Key completions during the first quarter included WellBe (Zone 5), delivering 26,710 sq.m; Rato 11, 14 & 15 (Zone 2), which added 8,420 sq.m; and Castilho, 26 (Zone 1), providing 3,920 sq.m.
