5th August 2022
The Demand for Office Space in Portugal

The Lisbon office market began 2022 in good shape. In January 2022 , a take-up volume of 13,000 sq m was registered, which contrasts drastically with only 1,991 sq m in January 2021, says Savills Research.

This comes on the back of the momentum already felt in the last 3 months of 2021 – when  the final take-up for 2021 was 161,600 sq m, 15% higher than in 2020. The Porto office market also managed to recover slightly from the effects of the pandemic, with a 5.1% growth compared to 2020.

The impact of the lockdowns and all the safety and social distancing measures had an inevitable effect on the working practices of companies, both in terms of the reorganisation of their working models and the way they use office spaces.


If before the pandemic, some decisions to transform office spaces were postponed in favour of other decisions, in the post-pandemic period we have witnessed a complete change of mentalities – where the well-being of employees now comes first.


Many companies have gone back to the drawing board and analysed their occupancy costs, taking into account two key new factors: working from home and compulsory compliance with social distancing rules in offices.

According to Eurostad, only about 5% of European workers were teleworking before the  pandemic. Portugal then was above the average with 6.5%.

The peak of remote working  in Portugal was recorded right at the beginning of the pandemic, in the 2nd quarter of 2020, when more than 1 million workers were working from home, about 23.1% of the total employed population. In the last quarter of 2021, this had already dropped to 9.3%.

At the beginning of the pandemic, uncertainty about the future worked in favour of  tenants, giving them some negotiating margin.  With the gradual recovery of the economy and growing demand led by international companies, the negotiating power has passed back into the hands of the landlords. Compressed rents, with low or no negotiating margin, rent- free periods and contributions to fit-out are no longer on offer.

The current prime rent in the Lisbon office market stands at 25 euros/sq m/month, but this is expected to rise due to the increase in demand from international companies that intend to enter or expand their activity in Portugal.

Over the last five years, we have seen an increase in companies renting more than 5,000 sq m.


Since 2017, these larger rental deals represented on average 30% of the total take-up volume per year, but  2020 (45%) and 2021 (39%) saw the volume of these larger deals increase. Consultants and lawyers, TMT’s and business services sectors are the main renters,  mostly multinational companies. The last five years have seen an average take-up of approximately 174,000 sq m per year.
Given the upward trend in demand, the pipeline planned for 2022-2024 will bring 242,000 sqm to market.  With more than 30% of space in the Greater Lisbon Area already pre-let, the new office space on offer will be quickly absorbed.

The current stock of office buildings consists essentially of used buildings, many of which do not meet current requirements in terms of the well-being of employees,  the retention of staff and the need for sustainability policies.


Only 15% of the buildings can offer space above 8,000 sq m (the average area requested by international companies).  It is therefore imperative that the market continues to bring on stream new projects, either through new construction or through the rehabilitation of existing buildings.

Occupiers will likely pay higher rents for newer, energy efficient premises. Companies focusing on the social element of ESG will also begin to increase their average floor space per worker to meet employee expectations.  The Lisbon office market look set for big changes ahead.


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