Two years after the covid-19 pandemic that ended trade, rental values of shops in noble areas of the city of Lisbon have almost recovered compared to 2019 and the supply of existing spaces is not sufficient to meet demand . Who says it’s Sandra Campos, Director of the Retail Department at real estate advisor Cushman & Wakefield (C&W). “The impact on rents in Chiado was no different than in any other part of the country. We have experienced two years of the pandemic with strong impacts on the global retail sector, against demand, resulting in an inevitable drop in rents forced to use more favorable terms to keep the contracts in place,” he explains. “The decrease compared to 2019 was around 6%, but a full recovery is already expected compared to pre-pandemic values,” assures the C&W manager.
It was the cooperation between owners and tenants that allowed the stores to stay open during the worst moment of the pandemic, argues Sandra Campos, underlining the longer take-up of vacant stores as the main effect on the market. But the scenario at the end of 2022 is the opposite. “As of today, supply is not meeting demand, which means that there is almost no quality space to rent in the main areas of the city,” he points out.
Chiado is the 27th most expensive shopping area in the world, according to C&W’s Main Streets Across the World ranking, having risen two positions compared to the previous study in 2019. According to the consultant, the top rent on Rua Garrett has increased in value since 2013, currently €1,426 per square meter per year, “a value five times higher than that of 30 years ago in the most expensive area of Lisbon”.
The emergence of Chiado on the list led by New York’s 5th Avenue is justified by Sandra Campos on the grounds that Lisbon has become “a very attractive city, open to the world and able to arouse the interest of reference retailers and cities such as Budapest and Istanbul that registered strong declines, allowing the rise of Lisbon and in particular Chiado.”
Avenida da Liberdade is distinguished by its luxury and has registered “unprecedented demand” since the beginning of the year, according to Cushman & Wakefield.
The appreciation of the main areas of the Portuguese capital is also due to the recovery in tourism. “Chiado is an area characterized by a strong flow of tourists, both national and foreign, and is a must see in Lisbon. It is increasingly becoming a mass market destination that feeds on this flow. This area, namely Rua Garrett, has a quite small size , so the brands installed there do not give up this point of sale even during a pandemic, recognizing its strategic value in this segment,” emphasizes the consultant.
Chiado manages to beat the Avenida da Liberdade, but the demand for this location is also high. “Avenida da Liberdade, with much more tradition as a luxury destination, has seen unprecedented demand since the beginning of the year. There is a clear lack of quality spaces and rehabilitation must be the way for new players to enter the luxury sector. If this scenario continues, we foresee an increase in prime rent values, which has already been reflected in the most recent transactions,” continues Sandra Campos.
In Porto, the Rua Santa Catarina and the surrounding area, such as the recently opened Mercado do Bolhão, concentrate the largest offer, but the consultant points out that “Avenida dos Aliados has established itself as the new luxury destination of the P
Source: DN
