Real Estate Funds in Portugal Reach Record €18 Billion Under Management
Portugal's real estate investment funds have shattered previous records in the first half of 2025, with the total value of assets under management increasing by 6.5% to surpass €18 billion. According to the latest figures released by the Portuguese Securities Market Commission (CMVM), this surge represents the most significant half-year growth since 2001, underscoring a period of intense activity and investor confidence in the market. The growth rate in Portugal was a staggering 13 times higher than the average recorded across the Eurozone during the same period, signaling the country's standout performance in the European property investment landscape.
The primary drivers behind this expansion are a combination of appreciating property values and a notable increase in the number of investment funds, particularly the rapid emergence of collective investment companies. These vehicles have become a popular structure for pooling capital to target opportunities in the Portuguese real estate sector. Igor Borrego, the head of capital markets for the consultancy firm CBRE in Portugal, commented on the findings, stating, “The data from the CMVM is unequivocal. We are seeing a level of growth that reflects both the underlying strength of property as an asset class and the sophisticated financial instruments now being used to access it.”
A detailed analysis of the fund allocations reveals a strong preference for the commercial real estate segment. The vast majority of the €18 billion is invested in assets such as office buildings, retail spaces, and industrial logistics parks. These sectors are perceived by fund managers as offering stable, long-term returns and are favored by institutional capital. In contrast, residential real estate constitutes only a minor fraction of the total assets under management. This disparity exists despite a well-documented housing shortage and soaring rental demand across the country, particularly in urban centers like Lisbon and Porto.
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In a recent market discussion, Mr. Borrego highlighted this imbalance, remarking, “A significant structural gap exists in the Portuguese market. There is a clear absence of large-scale private investment in the residential rental sector, where it is desperately needed. The returns offered by real estate funds in Portugal are significantly more attractive than those from traditional financial products like term deposits, yet this has not translated into a meaningful flow of capital into build-to-rent or large-scale residential portfolios.” This observation points to a potential market failure or a yet-to-be-tapped opportunity for institutional investors.
The CMVM's report provides a granular view of a market in robust health, at least from a commercial investment perspective. The consistent inflow of capital and the record-breaking value of assets under management paint a picture of a mature and attractive investment destination. However, the minimal participation of these large funds in alleviating the housing supply crisis remains a critical point of discussion among policymakers and market analysts. The current trajectory suggests that while Portugal's commercial property market is thriving, the residential sector awaits a new class of investor to help reshape its future.
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