Lisbon office sector to be more decentralised as some go ‘dual’

The post-pandemic office sector in Lisbon will be more decentralised, experts told Real Asset Media’s Portugal Investment Briefing, organised with Iberian Property, which took place online recently on the REALX.Global Platform.

“The new normal is a fully upgraded office experience, which means looking at tenants’ new needs and preferences,” said Joana Rodrigues, architecture director, Savills. “The trend in Portugal is to go back to the office, but people want to be in a good quality space near their home.”

A study which Savills undertook for Siemens, one of its clients, showed that in Lisbon around 25% of employees come from the opposite side of the River Tagus and, while they would prefer not to commute every day of the week, would still like to be in an office environment.

“The solution is creating an office hub on that side of the river that gives workers the opportunity to work near home for two or three days a week in a good quality space,” said Rodrigues. “This way employees don’t lose the connection with the company and with each other and achieve a good work/life balance. I think this will become a real trend.”

The head office in the CBD would remain, as a place for meetings and liaising with colleagues, but not on a daily basis.

Non-traditional companies switch to in- and out-of-town mode

“Some traditional companies like law firms or consultancies still need to be in the centre of town,” she said. “But others are shifting to a dual model, maintaining a presence in the CBD but opening hubs elsewhere. Tech companies like Microsoft or Siemens are decentralising fast.”

Investors should take the opportunity to capitalise on this trend. “Business hubs near residential areas would be a really good investment, North of the city but also outside Lisbon,” said Rodrigues.

They can be in residential suburbs but also further out of the city to cater for people who do not want to live in an urban environment. Offering flexibility is key, as well as providing a healthy and safe environment that makes people feel confident in returning to work.

“Sustainability in a building now is a must-have for all concerned, investors and tenants,” said Frederico Leitao De Sousa, senior consultant, offices agency, Savills. “Offices without green credentials are at risk of early obsolescence, as companies will not want to lease them and tenants won’t want to be in them.”

Crucially, ESG now extends to the amenities inside and outside the building, to the context and the community around the office, he said, which entails a lot of research and additional work to create good spaces.

The consolidation of the hybrid working model and the emergence of decentralised office hubs do not in any way spell the end of the traditional office market in Lisbon, he added.

“The prime office market is going strong and there is still far more demand than supply,” said Rodrigues. “We are getting a lot of enquiries and our forecast is that 2022 will be a very good year for the office market.”