However, this does not necessarily indicate a change in trend but rather a specific moment in the market that poses a challenge for 2025. For the first half of the year, the entry of 63,000 m2 of offices of which 63% were unemployed at the end of 2024.
In this context, it will be crucial to observe whether demand has the capacity to absorb the new supply and reverse the negative absorption registered in the last quarter of 2024. Positively, the reactivation observed in previous quarters is a good indication that this could be possible.
“The slight increase in vacancy, as a result of more vacant space, and the moderate increase in asking rent values are mixed signals. Although the increase in vacancy is a worrying fact, the increase in requested rental values suggests that there was greater market activity and there is currently interest in completing pending corporate movements,” he said. Charles Gowland, Senior Consultant at CBRE.
Limited offer of high quality spaces
At the end of the fourth quarter of 2024, the existing Class A/A+ office inventory is 2.2 million m2 in CABA and Greater Buenos Aires, registering an increase of 1.9% compared to the previous quarter. Production in 2024 reached 40,500 m2, a figure 52.4% below that achieved the previous year.
For the next two years, the completion of 154,000 m2 is expected, a figure that is well below the historical production average. 35% of the projects are located in the northern area of CABA, and 60% are planned for 2025.
“The reduction in new building production since 2021, due to economic and political uncertainty, has led to a limited supply of high-quality spaces. However, the demand for class A spaces remains strong, and the new buildings that have entered the market have been occupied quickly, even though the hybrid work modality has spread,” he explained. Karina LongoResearch Manager at CBRE.
In the future, the reduction in the number of projects in construction It represents a challenge for the demand that continues to focus on class A spaces, with state-of-the-art building quality. The challenge for developers will be to decide when to resume pending projects, especially if signs of revival in demand continue.
Rent and vacancy
There is a positive fact for the owners of offices: In the fourth quarter of 2024, rents show a slight increase of 2.7% compared to the previous quarter, standing at US$23 per m2, abandoning the downward trend of the last year.
By area, the requested rental values in the north of CABA continue to be the highest in the market, and they also show a slight increase motivated by the entry of new surface in Palermo. The completion of new high-quality buildings during 2024 has produced a revaluation.
In terms of values, the differences between areas are wide although the gap is beginning to narrow. Between the northern corridor of CABA and the Technological District the difference fell to 52.8%, due to the release of premium surface in the district, which went on the market at a higher price than the rest of the available spaces.
While the vacancy rate, that is, the available spaces, presents an increase as a result of the entry into the market of the Mirabilia building in Palermo and San Isidro Plaza in the Panamericana corridor, which together contributed 40,500 free m2.
Regarding the demand, The rented area in the quarter reached 29,300 m2, a figure that shows a decrease of 18.5% compared to the previous quarter. The demand was driven by the occupation of buildings in Catalinas-Plaza Roma, Polo Saavedra and the Panamericana corridor, which together absorbed 60% of the total rented area.
Source: Ambito
