It is enough to cross the micro-centre of Buenos Aires to verify that the office market continues to be one of the most affected by the pandemic. For nearly three years, the wave of corporate property closures due to the mass relocation of employees who suddenly had to work from home and did not return to work It hasn’t stopped yet.
On the other hand, this scenario does not hint at imminent changes, among other things because 83% of Argentines currently work in a hybrid scheme, 14% remotely and only 4% will work every day to the company that employs it, according to data from WeWork, a company focused on flexible workspaces.
As part of the trend, which appears to be here to stay, in the final quarter of last year approximately 10,000 m2 of the class B office sector were cleared, according to statistics maintained by Cushman & Wakefield, a business services firm.
In this way heVacant or unoccupied office space rose from 11.3% in the last quarter of 2021 to 12.4% during the same period last year. That is, it meant an increase of 8.9%.
According to these data, the rented area is 1,635 m2 while in the same period of the previous year it was 9,841 m2. “Expected 2023 will also be characterized by increased supply and unemployment”the specified ratio.
It so happens that this trend towards freeing up workspaces has been accentuating for several months. Not only due to the diversity of geographical possibilities inherent in teleworking, but also because companies that continue to bet on face-to-face work choose to move to buildings of better quality and location (fly towards quality), in a context where “there are various opportunities for improvement at very affordable prices”, explain the experts.
Carolina Wundes, coordinator of the market research department of Cushman, quantifies the event: “In the last period of the year, 10,664 m2 were vacated and only 1,635 were let, which gives a negative net absorption of 9,336 m2 and Job vacancies are expected to continue to increase throughout 2023.” he opined.
However, he added, “there are 126,667 m² under construction and projects, mainly in the sub-markets of Distrito Tecnológico, 9 de Julio and Libertador CABA. Although there is no confirmed delivery date yet.”
As a consequence of the exodus of many companies from the typical offices of downtown Buenos Aires, “the average rental price for class B offices has decreased and is now US$ 16.1 per m²what it represents a year-over-year decline of 5.9% in dollars– In the most popular submarkets such as Libertador CABA and Libertador GBA, the values reach 21 and US$20.7 per m² respectively.
Juan Querol, broker at Cushman & Wakefield, outlines other opportunities for companies: “Today, in other sub-markets, there are options available in Premium (Class A) buildings priced at US $24 per m² and Several companies are taking the opportunity to upgrade and have a more pleasant workplace,” he highlighted.
Despite the unfavorable context, according to JLL Argentina, another company specializing in corporate real estate, economic activity ended 2022 better than expected, with growth close to 5%. this still happened amid persistent inflation and depreciation of the exchange ratio, thanks to the sustained recovery of consumption, of the sectors most affected by the pandemic and of the manufacturing industry.”, explains Guido Mosin Research Manager JLL Argentina.
As for the prospects for this year, according to experts, beyond an incipient recovery in recent monthsthe market is still far from its historic averages and periods of best performance. To this it should be added that this is a year of presidential elections and this situation usually adds uncertainty and delays decisions until the results are confirmed.
For this reason in JLL they hope “that 2023 will be a year of stability, similar to 2022, with a reduced number of interventions likely to respond to specific opportunities for modernizing structures at lower costs that would be paid in a more dynamic and active market”.
Source: Clarin
