As Portugal’s second-largest city, Porto is well on its way to becoming a major investment destination, with foreign investors flocking to the scene.
In the last few years, Porto has seen a surge in activity and investment, attracting the attention of investors around the world.
Professionals are returning to the city following the pandemic, tourism is thriving, and the city’s universities are attracting an increasing number of students. It is also quickly becoming a hotspot for start-ups, with many new businesses popping up in recent years.
The city’s port is one of the busiest in Europe, and its airport is a hub for domestic and international flights. Porto is also home to a large university, which attracts students from all over the world.
With all of these factors working in its favour, it’s no wonder that Porto is attracting the attention of businesses and individuals as an ideal location for investment.
Prime office space is in demand
The expansion of the city’s university and the influx of new businesses has driven demand for office space. Take-up in prime office rental space increased to 24,470 m2 in Q2 2022, equating to an impressive growth of 137% y-o-y. This is compounding the shortage of space and pushing rental values up.
Porto’s mayor has pledged to invest €1 billion in the city’s infrastructure over the next decade. The investment will improve the city’s roads, public transport, and sewage systems—no doubt attracting more businesses wanting prime office space.
A bounce-back for hotels
Hotel investment is now at €22.5 billion in 2022, with 1600 new rooms (+60% from 1000 rooms in 2021). The city’s thriving economy and growing tourist industry are driving this investment.
While room occupancy may have slumped during the pandemic, hoteliers are confident that demand will rebound in the coming years.
Over the next five years, the city is expected to see a boom in hotel construction, with over 30 new hotels planned. Tourist numbers have already begun to rebound, and by 2025, Porto is expected to welcome 7 million visitors per year.
The rise of the digital nomad in Porto
Porto has seen an influx of digital nomads drawn to the city’s low cost of living and vibrant culture.
This new breed of workers is helping to drive the city’s economy, and many businesses are now catering to their needs. There are a growing number of coworking spaces, and increased demand for shorter-term rentals as freelance workers flock to the city.
A growing interest from overseas students
The number of international students studying in Porto has increased by 55% over the past five years.
This trend is set to continue as more and more students are drawn to the city’s universities.
Subsequently, the student housing market in Porto is poised for significant growth in the coming years.
Residential property continues to climb
Porto saw a 10% year-on-year increase in average sales price in 2022 ($2601 – $3200 sqm) with a total of 1,600 sales. The city’s expanding economy and population growth are driving demand for residential property.
Notably, there is a growing interest in Porto from foreign buyers. With all of these factors working in its favour, Porto is poised for continued growth in the years to come.