During the first half of the year, the office inventory experienced a year-on-year increase of 1.63% and new square meters are projected. premium offices in most cities in the region.
“All the cities we surveyed in our report registered growth: Santiago grew 0.18%, Bogotá 0.61%, Lima 0.77%, Sao Paulo 2.4% and Buenos Aires 5.1%the latter being the inventory with the greatest positive variation in the region. The only exception is Rio de Janeiro, where this variable did not change,” explained Ignacio Álvarez, Market Research Coordinator at Cushman & Wakefield.
Real estate market: more square meters under construction
Although Argentina has seen a contraction in its economy, the outlook for the South American corporate real estate market generally supports the recovery that most of the cities analysed are experiencing.
According to Cushman & Wakefield’s report on premium offices, the city with the most square meters under construction is Sao Paulo, with a total of 394,740 m², which represents the highest growth measured in meters in the region. “Despite this, in relative terms, The city with the most projected growth is Buenos Aires, with a future growth rate of 17.56%equivalent to an increase of 306,397 m²,” explains Álvarez.
Santiago, for its part, will see its inventory increase by 9.04%, reaching 1,894,964 m². Bogotá, with similar figures, will see its inventory increase by 8.12%, meaning that there will be a total of 1,911,622 m² of offices. Next comes Lima, with 17,164 m², which implies an expected variation of 1.2%. Rio de Janeiro is the only city that does not currently have any construction projects underway.
In order to understand the impact of these figures, it is important to keep in mind that, at a regional level, the metropolitan area of Buenos Aires It is the territory with the lowest density of square meters of class A offices in relation to its inhabitants. Bogotá and Santiago are the two cities with the highest index. The financial capital of Brazil, São Paulo, continues to have the largest inventory in South America, with 2.94 million m², surpassing the second place in this variable, Bogotá, by 66.1%. The smallest inventory in the region is that of the Peruvian capital.
What happened to vacancies and office prices?
Although with various impacts on vacancy rates, both Buenos Aires as Rio de Janeiro and Sao Paulo showed a positive net absorption. “In the case of Buenos Aires, despite the strength of demand, vacancies increased due to the entry of new buildings”, said Alvarez. In contrast, in Lima there was a downward trend in vacancy, due to the combination of stable occupancy of square meters and the lack of incorporation of new projects into the market. Bogotá and Santiago, on the other hand, showed negative absorption.
In year-on-year terms, the asking price fell by 7.6%. The city with the greatest impact on the variation was Rio de Janeiro, mainly due to the 28.08% drop in the price per square meter in year-on-year terms. It should be noted that, of the total decrease, approximately 16.7% was due to the devaluation of the real, so less than half of the variation arises from a change in the price itself. The second place for the greatest year-on-year decrease in price belongs to Santiago, with a fall of 9.3%. The city that most offset the fall in price in the region was Lima, where the asking price increased by 2.5%, although its impact on the regional average was not considerably significant due to the size of its inventory. The price of Buenos Aires was the second largest increaser, with 1.5%.
“Across the region, major companies are showing growing interest in buildings that offer premium amenities, high-quality spaces and sustainable features. This growing trend reflects that user experience and employee well-being remain a priority for those companies seeking to achieve a competitive advantage through their workspaces. We can say that the “Fly to quality” is still in force, where the location of buildings and amenities are becoming more relevant. As a result, many companies are choosing to reduce the number of square meters in favor of higher quality spaces,” said Herman Faigenbaum, CEO of Cushman & Wakefield South America.
Source: Ambito
