Office Rentals in Buenos Aires: The USD dollar m2 price has fallen a little but vacancies have increased
The cost of leasing has dropped just 3.7% in a year but the available rentable area has increased by 36.7%.
In light of the lower economic activity, the office market also experienced a contraction during the first quarter of this year. Not only did gross rental prices decrease in these workspaces also the level of vacancy (available surface) rose to 6.7% of the total of the offer, to 36.7% higher than in the same quarter of 2018.
According to a report by Cushman & Wakefield, “during the first quarter of 2019, the movement of the market was relatively slow due to the complex economic context, although, despite this, it is perceived that demand still remains active,” they said.
According to the consultant’s report, it is expected that the level of vacancy “to increase during 2019”. Among other reasons, because there will additional square meters on offer with completion of new buildings currently under construction.
At the general level, the dollar prices of the rents declined 3.7% compared to the closing of the previous year. This variation may be higher in older buildings, and in space that has been in the market for quite some time. The average rental price went from USD 34 per square meter in the first quarter of 2018 to USD S32.
In the first quarter of the year, the vacancy rate increased slightly to 6.7%. This represents 87,595 m2 of availability on the market, a figure of 6.2% above the previous quarter.
Although the available m2 had a reasonable growth between the area of the corridors of the Federal Capital (Catalina, Puerto Madero, Retiro, etc) and the area of the corridors located in the north, such as the Panamericana, the biggest increase in vacancy was observed in the first with a 5.3%. This figure implies a growth of 10% compared to the previous quarter.
The Pan American corridor continues to concentrate the largest amount of vacant surface available, with a vacancy of 14.4%, followed by MicroCenter (CBD) with the 9.5% and the Nodo Panamericana-Gral. Paz has 8.9% vacant.
The rental price, the exchange rate crisis and their reflection on economic activity resulted in a decline in the prices that are replicated in most submarkets. The most affected were the lower parts of 9 de Julio (-10.3%) and Panamericana (-7.7%), and Catalinas-Plaza Roma (-5.4%).
Currently, in construction, there is 338,280 m2 so that, for this year, it is expected 160,710 m2 will be completed which will increase the inventory of premium offices 12.4%.
Although all the submarkets have some developing projects, 56.5% of the surface under construction is located in the area of the Capital Federal.
With respect to the total area under construction, this amounts to 711,520 m2, 59.8% of it will be located in Buenos Aires Province.
Source: El Clarin