While Europe retreats, Portugal accelerates and rises 32% in real estate investment

According to Colliers Research, almost every major economy saw real estate investment decline in early 2026: the USA (-23%), China (-72%), and Germany (-18%). The Eurozone overall, on average, fell 26%. Portugal did the exact opposite and rose 32%. Only Taiwan (+52%) outperformed globally.

The numbers behind the quarter

Total investment volume reached €915 million in Q1 2026, a robust figure when compared to the 2025 full-year average (€2.7 billion).

Hotels led sector performance with €336M invested, representing 37% of total volume and a 67.5% increase compared to the 2025 average. Retail followed closely with €345M (38% of total), although this represented a 10.9% decline year-on-year. Industrial & Logistics saw the sharpest growth of any sector, more than doubling to €40M, up 111.1% from the 2025 average. Office investment, by contrast, fell sharply to €35M, down 60.3%, the steepest decline among all sectors. Living recorded €39M in investment, while alternative assets reached €121M.

Hotels and retail clearly dominate investor demand, together accounting for 75% of total volume. Office remains under contraction, reflecting investors' selectivity toward Grade A, ESG-compliant assets. Logistics, meanwhile, is flagged as the next sector expected to gain weight in coming quarters.

Who is buying

Foreign capital continues to lead demand, particularly in the hotel sector.

Stable yields

Prime yields remained largely unchanged during the quarter.

Macroeconomic backdrop

The environment continues to favor investment: inflation normalizing close to 2%, Euribor stabilized in the 2% range, and a resilient Portuguese GDP, expected to grow close to 2% in 2026, outperforming several Eurozone peers.

What this means

Record tourism performance in 2025, with momentum carrying into 2026, reinforces Portugal's position as one of Europe's most attractive hospitality investment destinations, further supported by a still-fragmented ownership structure offering clear consolidation opportunities. Prime retail, meanwhile, remains a solid defensive allocation, underpinned by limited supply across Lisbon and Porto's key high-street locations.

Office is the most penalized sector, reflecting increasingly selective, quality-focused demand. Logistics emerges as the segment to watch in the coming quarters, driven by near-shoring trends and e-commerce growth.

Sources

"Real Estate Investment in Portugal: Q1 2026 Snapshot" by Colliers Research

MSCI Real Capital Analytics