June 2025 Market Overview
The Portuguese construction sector continues to influence commercial real estate dynamics, with the latest performance offering valuable signals for market participants. According to the latest data from INE, construction output in June 2025 rose by 2.9% year-on-year, driven by gains in both building construction and civil engineering.
This steady expansion holds strategic importance for real estate investment, as it reflects ongoing development momentum while highlighting cost pressures from a 12.2% surge in wages. For investors, these figures provide a timely benchmark for assessing market health and refining portfolio strategies.
Key Takeaways for Commercial Real Estate
- Broad-Based Growth Across Segments
- Gains in both building construction and civil engineering point to sector resilience, creating favourable conditions for launching new commercial real estate projects, including mixed-use and office developments.
- Gains in both building construction and civil engineering point to sector resilience, creating favourable conditions for launching new commercial real estate projects, including mixed-use and office developments.
- Rising Labour Costs as a Strategic Risk
- With wages growing much faster than employment, labour cost inflation could impact budgets and profit margins for commercial real estate developments, particularly those with long construction timelines.
- With wages growing much faster than employment, labour cost inflation could impact budgets and profit margins for commercial real estate developments, particularly those with long construction timelines.
- Infrastructure Expansion Signals Opportunity
- The rebound in civil engineering activity may enhance the value of surrounding assets such as logistics hubs, retail centres, and business parks, creating new opportunities for targeted commercial real estate acquisitions.
- The rebound in civil engineering activity may enhance the value of surrounding assets such as logistics hubs, retail centres, and business parks, creating new opportunities for targeted commercial real estate acquisitions.
Forward-Looking Perspective
In the second half of 2025, commercial real estate investors should watch whether construction output growth can sustain its current pace amid rising wage pressures. Persistent cost inflation may require adjustments in pricing strategies or asset selection to preserve returns.
Public infrastructure investment could stimulate demand in well-connected locations, while disciplined cost control — through phased construction, fixed-price contracts, and pre-leasing agreements — can help mitigate financial risks in large-scale commercial real estate projects.
Conclusion
June’s data confirms that Portugal’s construction sector is maintaining a growth trajectory, providing support to the commercial real estate market. However, accelerating wage growth represents a structural cost challenge that must be factored into investment planning. The most effective strategies will balance exposure to high-demand asset classes with robust cost management and adaptable financing structures.
For tailored insights and strategic opportunities in the Portuguese commercial real estate market, contact Roca Estate to discuss how our expertise can support your investment goals.