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Commercial Real Estate investment in Portugal is forecast to surpass the €1 bn mark in 2015, reaching one of the highest figures on record, according to Luis Antunes, head of C&W’s capital markets in Portugal.

This would represent a nearly 43% increase on 2014’s levels of €704 mln and about three times as much as 2013, when only €320 mln were transacted in the market. In 2012, Portuguese real estate reported as little as €100 mln of activity.

Consistent economic improvement, higher levels of consumption and a better than expected unemployment situation, an unruffled public debt market and Portugal’s 'clean' exit from the Troika’s adjustment programme, are important factors for the market positive evolution, according to C&W.

‘We are seeing interest from traditional investors from Germany, Spain, the UK and the US as well as from new geographies such as China, South Africa and Brasil,’ Antunes added. As a result of increased activity and growing demand for assets, prime retail yields have already compressed by around 100 basis points from 7.5% previously to about 6.5% at present while prime office yields are currently at around 6%.

In 2014 the largest deal was US investors Blackstone’s purchase of more than €200 mln logistics and retail property assets portfolio from ESAF. In the retail sector, Carlyle sold the Freeport Outlet Alcochete to the VIA Outlets joint venture, the main asset of a European portfolio comprising three outlets; while the US Alaska Permanent Fund Corporation bought 50% of Alegro Alfragide from Immochan.