Very high demand for new office space in Buenos Aires means all new projects are pre leased
“What is already built, is fully leased”; All the main market analysts agree. This semester will add 8 new buildings, which increase the inventory 3.6% but not enough to satisfy strong demand.
Real estate market analysts agree that this will be a good year for the office segment. The Buenos Aires market and the northern corridor remain stable and the greatest demand is concentrated in the higher offices, classified as A +, whose average rent is between US $ 30 and US $ 32 per square meter and last year saw an increase of 1.32% in cost.
Eduardo Di Buccio, research manager and María Eugenia Aguirre, marketing coordinator of real estate consultancy CBRE, said that “everything that is built is already rented”. In as much, Juan Manuel Farola, manager of the division offices of Colliers International agreed commenting that even the new projects under way have been pre leased.
The total consolidated area by 2022 is estimated at 3.7 million m2, of which 16% is under current construction. The addition of eight new buildings during this year is added to this future panorama.
For Di Buccio, the office market was revived as of 2016 with a macro economy that began to give certainty and had a similar performance in 2017 and is estimated to remain stable going forward.
Within the corporate offices, the market is favored by the so-called A + class, which are the newest, best located, with technical and sustainable specificities and the so-called class A offices that are of the older category. “In the A + offices the monthly rent per square meter goes from US $ 32 to US $ 42 and the offices are priced between US $ 22 and US $ 28 per square meter,” Di Buccio said. “The price of the A + pushes the average ceiling of the rents and the demand validates them,” he explained.
For the directors of Colliers, in the first months of this year the incorporation of eight buildings is expected, which will increase the premium inventory of offices in 65,724 m2 (3.6%), which will be distributed in 58.9% in the submarkets of North GBA and 41.1% in North CABA.
Meanwhile, Di Buccio said that the vacancy “was at 8% three years ago and fell to 6.3%, because demand increased,” he explained. He estimated that the office market increases close to 100,000 m2 per year and specified that the net demand or absorption is 25,575 m2 and calculated that 438,023 m2 are under construction. He agreed with Colliers, whose executives said that “a lot of meters are expected to come in as fresh offers of land to develop new office towers becomes available” in reference to the public auctions of the Agency of State Property (AABE) in the area of Catalinas. Developers such as Consultario and TGLT confirm this.
He explained that in the cases of construction of A + offices, the developers “keep the building to use it themselves or to rent offices or sell some units as in the case of IRSA that have sold units to Banco Macro”.
For CBRE, the most important projects for 2018 and 2019 in terms of offices are: Olivos Office Center, which is a 9-storey Class A + tower in Pan-American and San Lorenzo; Alrio Docks, smaller offices within the complex, Class A; Open Office Libertador 700, is a Class A + office tower on Avenida del Libertador in Vicente López, near the local railway station, and another project from this same developer, Open Office Libertador 1000 that was entirely taken over by WeWork.
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