Lisbon leads the European office market with competitive yields

In 2026, the European office market is preparing for a new investment cycle, driven by the stabilization of yields prime and the recovery of investor confidence.

Portugal, especially Lisbon, appears as one of the most attractive destinations, according to the “European Office Investment – Q4 2025” report by Savills.

As yields prime European prices remained at 4.9%, with Lisbon recording 4.75%, a competitive value in relation to Madrid (4.80%) and higher than Milan (4.25%), Paris (4%) and London West End (3.75%). This scenario places the capital of São Paulo among the markets with the best balance between income and appreciation potential.

Frederico Leitão de Sousa, responsible for the office sector at Savills Portugal, highlights the good performance of the occupational market and an increase in office-to-housing conversions as factors supporting the investment recovery. “Portugal is now entering a particularly favorable cycle. We believe that 2026 will be the year of consolidation”, he says.

Investor interest has focused on assets prime with high occupancy, as confirmed by the INREV survey, which points to a preference for Southern European markets and a growing interest in Germany, highlights the report.

Pressure from international capital is increasing, with growth in investment cross border. This movement tends to accelerate the absorption of stock available in Lisbon and the compression of yields, highlights the document.

Mike Barnes, director of office research at Savills, says that the shortage of space prime and the increase in costs of fit-out lead many companies to renew contracts, capturing increases in income. “Owners are thus able to capture increases in rent during renovations”, he explains.

James Burke, Global Chief Investment Officer cross border at Savills, notes that “favorable financing conditions are attracting more investors”, which should increase investment volumes in European property this year.

According to Oxford Economics, Eurozone GDP growth is expected to be 1% in 2026 and 1.6% in 2027, with Southern Europe standing out for its dynamics. Portugal thus asserts itself as one of the most competitive destinations for international capital looking for offices prime, sustains Savills.