Recent analyses by Capital Economics highlight Portugal as a standout performer within the Eurozone, particularly in its prime retail real estate asset market.
With strong economic fundamentals and a highly favourable rental outlook, Portugal is forecast to be among the Eurozone's best retail performers over the 2025-29 period, projecting impressive total returns of 10.5% per annum.
Investor confidence in Portugal has notably strengthened over the past year. In the first quarter, retail assets constituted a significant 56% of all commercial real estate investment, according to Cushman & Wakefield.
This robust appetite has already contributed to a 40-basis-point reduction in prime yields during Q1. While this has led some to view the Lisbon retail market as potentially overvalued, the sector's underlying prospects remain exceptionally strong.
The vitality of Portugal's retail sector is underpinned by several key drivers. Retail sales recently saw a remarkable 2.1% month-on-month increase, the strongest in Europe, propelled by thriving tourism and resilient domestic demand.
Amanda Collison, spokesperson at Property Market-Index, gave her thoughts on why Portugal is set to top the Eurozone rankings.
“During 2024, a significant increase in investments from affluent international investors and relocators has been recorded in Portugal. According to the Portuguese Trade & Investment Agency, €13.2 billion was invested in foreign direct investment in Portugal in the last 12 months, a 19% increase from the previous year.
“Of this amount, €3.5 billion was attributed to real estate investment.
“Foreign investors accounted for 81% of Portugal’s total real estate investment in Portugal overall last year, while foreign residents made up approximately 12% of Portugal’s population as of December 2023, with US residents increasing to nearly 21,000 people, representing an increase of over 340% in five years,” Collison stated.
Consumer confidence has also rebounded, mitigating previous declines linked to trade policy uncertainties.
Looking ahead, Portugal is poised for a record-breaking year in tourism, with projections indicating 33 million visitors in 2025 – a 2.3% increase from the previous record in 2024. This influx is set to significantly bolster footfall across high streets and urban centres, particularly in Lisbon.
Domestically, the outlook for consumer spending is equally encouraging, with a forecast growth of approximately 2.5% per annum over 2025-27, comfortably surpassing the 1% per annum expected across the wider Eurozone.
This sustained consumer demand is supported by robust employment growth, easing inflationary pressures, and declining mortgage servicing costs amidst loosening monetary policy.
Lisbon, in particular, benefits from a notably tight supply environment. Availability rates are below the Eurozone average, and prime Lisbon retail vacancy stood at just 2.4% in Q1 2025, as noted by CBRE.
This supply-demand imbalance has empowered landlords to drive rental growth, with prime rents in Lisbon rising 1.9% quarter-on-quarter and 5.8% year-on-year in Q1.
Considering these compelling factors, Lisbon is forecast to deliver rental growth of just over 3.5% per annum between 2025 and 2029, comfortably outperforming the Eurozone average of 2-2.5% per annum.
Investors can potentially take advantage of this growing market through the country's increasingly popular Golden Visa residency-by-investment programme.
The CERES II fund invests in majority stakes exclusively in small and medium-sized companies based in Portugal, with the aim of developing and managing operations, directly or indirectly, through its own or third-party brand: Proximity Food Retail Units.
Contact Portugal Pathways to learn more about CERES II or other Golden Visa-eligible funds.
While direct real estate purchases are no longer eligible for Portugal’s Golden Visa programme, investors can still qualify by investing €500,000 in an approved alternative investment fund.
Golden Visa-eligible alternative investment funds often invest across Portugal’s key growth sectors, potentially including Portuguese retail real estate, alongside other sectors such as tourism and hospitality, healthcare, media and international events, tech, and renewable energy.
Portugal’s Golden Visa residency-by-investment programme, which is responsible for over €7.5 billion in foreign direct investment (FDI) since its inception, provides investors with a clear pathway to permanent residence and potential dual EU citizenship.
Paul Stannard, Chairman and Founder of Portugal Pathways and the Portugal Investment Owners Club, states:
“International investors and affluent families are drawn to Portugal’s Golden Visa for the flexibility it allows.
“Requiring holders to spend just seven days per year in Portugal, the Golden Visa’s clear pathway to citizenship makes it a no-brainer for anyone looking to secure dual EU citizenship and an EU passport for themselves and their eligible family members.
“2024 was a massive year for Portugal’s Golden Visa, and so far in 2025, we’re seeing demand reaching new heights.
“This is backed up significantly by the potential for affluent families and investors to combine Golden Visa qualification with investment into alternative regulated Portuguese Golden Visa funds focused on the retail real estate operations sector in Portugal.
“However, there are so many avenues for investment, and an array of alternative regulated Portuguese investment funds to choose from to qualify for Portugal’s lucrative Golden Visa residency by investment programme.”
About Portugal Pathways
Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.
About Portugal Investment Owners Club
The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.
Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.
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