Economic Context
Portugal's economy continues to show strong performance, with its Gross Domestic Product (GDP) projected to grow by 2.3% in 2026, a rate that surpasses the average for the Euro Area. This economic expansion is primarily fuelled by strong domestic demand, with private consumption being the main contributor. On the inflation front, pressures have eased, and rates are anticipated to stabilise below the 2.0% mark in the medium term. The labour market demonstrates notable resilience; the unemployment rate is trending downwards, expected to reach 5.7%. However, the pace of job creation is projected to slow to 1.3% in 2026.
Demand Overview
The Greater Porto office market experienced a significant acceleration in letting activity during the first quarter of 2026. A total of 7,150 sq.m were let across 17 separate deals, representing a remarkable 67% increase compared to the same period last year. In contrast, the average deal size decreased to 420 sq.M.
Key deals during the quarter included three major deals at the Viva Offices development located in Zone 3 (ZEP). These deals, involving two confidential tenants and the company Nordex, collectively accounted for nearly 4,000 sq m of let space. Zone 3 (ZEP) was the most active submarket, capturing over 60% of the total take-up. The CBD Boavista (Zone 1) followed, contributing 24% of the take up volume. The primary driver of this demand was the TMT’s & Utilities sector, which was responsible for 73% of the total take-up.
Vacancy Trends
The overall vacancy rate across Greater Porto saw a marginal decrease, tightening by 0.1 percentage points year-on-year to stand at 8.7%. Vacancy rates displayed considerable variation between submarkets. The CBD Downtown (Zone 2) recorded the lowest rate at 5.7%, followed by CBD Boavista (Zone 1) at 7.7%, and ZEP (Zone 3) with the highest rate at 10.9%.
Rent Trends
Prime rents held steady across all submarkets in the first quarter of 2026. The highest prime rent was observed in the CBD Boavista (Zone 1), at €21.00/sq.m/month. This was followed by the ZEP (Zone 3) at €19.00/sq. m/month and the CBD Downtown (Zone 2), which registered a prime rent of €17.00/sq. m/month.
Total and Construction Pipeline
No new office buildings were completed and delivered to the market in the first quarter of 2026. However, the development pipeline for new office space remains robust. An estimated 116,800 s. m of new supply is forecast to be completed over the next three years. Of this total, approximately 91,500 sq m is already under construction. 14% of this upcoming space has already been pre-reserved, indicating strong future demand. The key submarkets with significant ongoing development activity include CBD Downtown (Zone 2), Oriental (Zone 4), Matosinhos (Zone 6), and Vila Nova de Gaia (Zone 8).
