Porto is without doubt a beautiful city overflowing with art, history and culture. It offers underrated beaches and of course has one of the world’s most famous wine regions on its doorstep. But let us take all of this off the table and look at the numbers and facts which paint an equally attractive picture.
In recent years the city of Porto, has experienced a massive boom in its hotel development, office space, and residential sectors. While prime office rent has remained stable, the market take-up for this sector has increased to 24,470 m2 in Q2 2022, representing a +137% y-o-y growth. As well, the hotel pipeline for 2022 has resumed its course and with the significant increase in tourism, since the easing of health and travel restrictions, the hotel investment volume in the country has picked-up with an estimated €22.5 billion for the year, representing a 60% increase from 2021. With approximately 1000 refurbished rooms completed in 2021 and an additional 1600 new rooms expected in 2022, Porto is undergoing major refurbishment, and is adapting to the rise in popularity the city is experiencing.
With the increase in investment pouring into the city, housing refurbishment has kept developers busy. We observe that Porto is surpassing Lisbon in terms of licensing approvals, allowing for greater supply of new residential projects and lower comparative housing prices on average. Although real estate prices are lower in Porto than in the capital city, JLL market pulse for Q2, 2022 reports that y-o-y average sales price for both pre-existing building and new constructions are at record highs with more than 10% increase in both market segments.
International investors and digital nomads are not the only ones being attracted to Portugal and all that it has to offer. Indeed, students from all over the world are also drawn to the Southern European country to pursue higher education levels, due to the country's reputation for its great student/life balance. According to JLL market research, in the last 5 years Portugal has seen the number of international students increase by 55%, which represents 14% of the total number of students in the country. As such, with the increase in national and international students enrolling in Portuguese universities that offer English programs, the student housing portion of the market is expected to experience significant growth in the years to come.
Increase in demand is enhanced further by a natural northern migration from Portuguese citizens seeking a more affordable lifestyle, housing market and school system. Porto offers this and more.
With fast increasing tourism, international residents like digital nomads, students, relocating Portuguese and corporate headquarters, Porto’s continued ascendency seems inevitable.