Those who monitor the corporate real estate market observe that demand for offices has recorded a deceleration in the first quarter of the year compared to the previous period. This created it rental prices have fallen, necessary to incentivize the sector.
Although vacancies or job availability decreased by 0.4 points according to a report from CBRE Argentina, they remain at high levels: 18.8%, The outlook, according to this source, is that demand will continue in the same way waiting for a more predictable environment to reactivate their business movements.
According to the data reported in the latest report, the current vacancy rate is 2.3 percentage points more than that recorded in the same quarter of the previous year. Something that occurred due to the combination of several factors: on the one hand, due to the less economic activity already a market in which Traditional rentals compete with temporary work spaces (coworking).
Also due to the impact of the office production that was delivered during 2023. It happened that during the pandemic inventories had accumulated and many of the works already in progress were delayed.
Dollar prices fall
In this context, in the first quarter of the year Rents fell 1.2% from the previous quarter. The average price for Class A/A+ offices was US dollars 23.38 per square meter (m2) per month.
An interesting fact that confirms the trend is that All areas showed a decrease in requested rental valueswhich suggests a possible readjustment not only to try to capture demand, but also to face the first devaluation of the official dollar, whose value is taken as a reference for the payment of rent.
“Since the adjustment made to the value of the official dollar at the end of 2023, and its direct impact on incomes, the market became more favorable for the owners, improve the deteriorated profitability margin of the offices” explained Juan Villarolo, senior consultant at CBRE.
Supply and demand
Net absorption for the first quarter of 2024 amounted to 9,708 m2. However, for the second consecutive quarter it closed on positive values They continue to be well below the market’s three-month average.
The surface area rented on a quarterly basis reached 20,220 m2. Demand was driven by occupancy of buildings in the Northern Corridor of Pan-American, Macrocentro and Macro Norte areas, which together absorb 63% of the total rented area.
At the other extreme, the surface area freed was 10,512 m2. The overall unoccupied area is located in the CBD area (acronym for Central Business District) within which the submarkets stand out. Plaza Roma, Puerto Madero Norte and Microcentro which concentrates 92% of the total.
“The transition moment that the market is going through as it adapts to the new economic measures could delay the reactivation of demand, which It waits for a more predictable environment to make movements corporate,” added Karina Longo, Research Manager at CBRE.
From Newmark Argentina, however, they believe that “the market is waiting for the great paradigm shift at a national level”. And in this sense it is expected that, “if economic conditions adapt and an environment of greater predictability thrives, companies will resume their business movement plans, promoting the absorption of new meters”.
The Federal Capital and the CABA North corridor are where the highest concentration of projects delivered in 2023 is located. While, according to CBRE data, production for the next three years will be 167,687 m2 of which 73% is expected this year .
Source: Clarin
