Nicholas Cox is president of CBRE Argentina and Chile. He has extensive knowledge of the office and logistics center market, two estate keys in today’s economy.
In dialogue with Scopetook a tour of the most sought after areas in Buenos Aires by companies, the opportunities and projections of what is to come.
Journalist (P): What trends are there currently in work models in corporate offices?
Nicholas Cox (NC): What defines work models now is flexibility. If the pandemic left us with anything, it is knowing that we have to adapt to different circumstances, different ways of doing things. Flexibility of schedule, flexibility of spaces, flexibility of integrating with different teams. Not only have you had to adapt your schedules but also the facilities for that. In short, you cannot say that you have a flexible work culture when you offer a small office next to each other, or you do not have meeting space with Zoom technology, all of those things have to go along with it. Companies little by little were adopting these types of tools, looking for a space conducive to that flexibility. People value flexible work, even more so in cities like Buenos Aires where the transportation infrastructure is not optimal.
Q: How is the demand for offices?
NC: In terms of occupancy we have seen that demand is increasing, there are encouraging figures. We have had positive absorption for three consecutive quarters; more square meters are occupied than vacated. What has consistently increased is the number of spaces with rental contracts.
Q: Is this situation also seen in Chile?
NC: YES, much more marked
Q: Some time ago more offices began to be installed in the northern area of Buenos Aires. What are the most in-demand places, those that are working and those that are not?
NC: The northern zone had a strong emergence in 2010. Today it is a bit the other way around. It has a lot of vacancy, new buildings, with a lot of technology, very large, that could not yet be occupied, the buildings are not finished being delivered because they are empty. There are qualitative changes, fewer spaces are needed. Today you talk to a potential tenant and they don’t ask for 100% of the workstations, they ask for 50%.
The center once again took center stage, due to its ease of access. Catalinas, Puerto Madero and Retiro have once again gained interest because people want to get there easily with public transportation. For example, going to the Panamericana area is more problematic, there are not as many buses or there are no parking spaces and not all companies have shuttles. The office submarkets in the City of Buenos Aires that have good transportation are having greater demand.
We are also seeing that a new area is emerging, which is the focus in Núñez. Today the General Paz and Zona Norte axis is moving towards Libertador. Now they are going to build a third office tower where the Axion service station was. The Innovation Park will also consolidate that area. There is a trend that is repeated a lot in several Latin American cities, which is that office real estate development somewhat follows the residential real estate development of high-income people. The same thing happened in Santiago de Chile, they moved towards Las Condes, for example.
Q: What happened to the Nordelta office area?
NC: They are getting busy but slowly. We must also differentiate the corporate user or those who have a smaller or family business. It is difficult for the corporate user to leave, because it attracts talent from all over the city. For example, someone from the south finds it more difficult to get there.
Q:-Microcentro’s reconversion plan was cancelled. What do you think about it?
NC: The reconversion of the Microcenter was difficult to articulate. The majority are small, loose units. When you have to convert, you have to buy the entire building. There were specific buildings to do it. It was difficult to execute, we did not think that there was going to be a wave of developments as can happen in an area where land is put up for tender, such as the Innovation Park. And there is the implication of price too. The cost of construction went up and conversion is more expensive to do.
In Chile the dynamic is the same. The city center is very complicated, it has not recovered after 2019. Companies took advantage of the window of space to areas such as Las Condes and Providencia and made a fly to quality. The market has a very interesting demand, with a single-digit vacancy rate except in the center.
Q-What vacancy is there in Argentina?
NC: It’s at 15%. Before we had a vacancy of 5 to 10%. We have had 3% vacancy at record times. But, we were also up 18%. Today it is decreasing since the middle of last year. If the country begins to truly grow, the need to offices It is going to increase and some areas are going to overheat.
Q: What is the situation of the logistics centers?
NC: There is a lot of growth in what is known as built to suit. There is a vacancy of 5.1, which is low compared to offices. There is a lot of movement, retail is going to have to take up more spaces because it is growing a lot. If you compare the Buenos Aires market with other cities in Latin America, it is noticeably behind in terms of square meters. That will necessarily have to be updated at some point. When a country does not grow in economy it is difficult for it to grow in infrastructure.
Source: Ambito
