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Portugal “one of world’s most sought after destinations” for property investment

Savills World Research expects buoyant 2024

Global property investment is expected to increase in 2024, peaking in the third quarter, according to Savills World Research, which cites Portugal as “one of the most sought-after destinations due to its tourism potential”.

“Savills researchers predict a more positive property investment environment in 2024, with 57% on average expecting a moderate to strong increase in investment activity next year, although this figure rises to 70% of respondents for multifamily residential properties and 66% for industrial and logistics properties,” the international property consultancy said in a statement released today.

Savills expects “investment activity to pick up in the third quarter of 2024, with the recovery being driven by a number of important markets, including the US and the UK“.

The real estate consultancy is “more optimistic about activity in the global residential markets, particularly in the multifamily sector, where demand outstrips supply in many areas, and in the logistics sector, driven by its strong fundamentals”: 90% of Savills’ researchers expect rental values to increase in the multifamily segment and 81% expect increases in the residential market in general.

In the logistics segment, 92% of respondents expect rents to rise or remain stable, in a context of resilient consumer demand and an expanding production base after the covid-19 pandemic.

For the office and retail segments, 70% of Savills researchers anticipate “stable or increasing rental values in the prime property market”, whether it is prestigious office space in city centres (73% anticipate an increase in values) or quality retail outlets with a strong influx of national visitors or tourists (81%).

As for the secondary office market, 73% of those surveyed expect values to remain stable or fall next year, with “any increases in rents will probably depend on the updating of these properties”.

Quoted in the statement, Eri Mitsostergiou, director of Savills World Research, said “2024 should be a much better year for property investors worldwide, with a sustained recovery expected as yields become more attractive, prime rents rise, and price revaluation begins to realign the expectations of buyers and sellers in markets where this has not yet occurred”.

The head of research at Savills Portugal, Alexandra Gomes, said that “for 2024, the projections are slightly more optimistic, although investors are still analysing the risks very carefully“.

“We will certainly continue to see greater portfolio diversification as a strategy adopted by investors, directing their investment towards alternative segments such as residential, senior living, healthcare and student housing. In addition, ESG criteria and decarbonisation will also feature prominently, since as investors become more aware of environmental, social and governance aspects, they will look for assets that offer a high financial return and are aligned with their values,” he adds.