How would the exit of betting companies affect real estate?
- An exclusive SiiLA study identifies approximately 16,000 m² of office space occupied by betting companies, with an estimated annual rental value of R$22.6 million; a potential exit would have effects concentrated in specific submarkets
A select group of 84 companies generates a combined R$20 billion in annual revenue: betting operators, popularly known in Brazil as “bets.” Now, after the Lula administration signaled a possible ban, the real estate sector could lose approximately R$22.6 million in annual rental activity from these companies.
An exclusive SiiLA study, which cross-referenced the list of companies authorized by the Ministry of Finance’s Secretariat of Prizes and Betting with Market Analytics data, identified approximately 16,000 m² of office space occupied by companies linked to betting operations.
São Paulo accounts for most of this footprint. In the city, the study identified 13,200 m² occupied by 15 companies across 15 buildings, with an estimated annual market rental value of approximately R$20 million.
Despite this volume, the potential return of all these spaces to the market would have a limited effect on São Paulo’s overall office vacancy rate. Under a complete ban on these companies’ operations, the city’s office vacancy rate would rise from 15.88% to 16.02%, an increase of just 0.14 percentage points.
While the increase would be minimal across the São Paulo market as a whole, a closer look at individual submarkets reveals a scenario that could keep some landlords up at night.
In the Rebouças submarket, the potential return of the spaces occupied by betting companies would push the vacancy rate from 3.99% to 5.83%, an increase of 1.84 percentage points.
The effect becomes even more pronounced when both location and building class are considered. In Rebouças’ Class A+ office market, the 3,700 m² occupied by betting companies represent a potential vacancy increase of 4.09 percentage points, from 4.09% to 8.19%, should all this space return to the market.
The largest percentage-point increase, however, would occur in Class B buildings in Vila Leopoldina. The departure of tenants occupying 864 m² would push the vacancy rate in this segment from 14.36% to 28.90%, a difference of 14.54 percentage points.
Outside São Paulo
Betting companies have a smaller footprint in the other markets monitored by SiiLA. The study identified an additional 2,838 m², with an estimated annual market rental value of approximately R$2.61 million.
Belo Horizonte accounts for nearly two-thirds of this space, totaling 1,775 m². Should all these spaces be vacated, the office vacancy rate in the Minas Gerais state capital would rise from 12.98% to 13.48%. Campinas, Porto Alegre and Rio de Janeiro would see smaller impacts, while no occupancy by the operators covered in the study was confirmed in Brasília or Curitiba.
The effect is once again greater when the analysis is limited to high-end buildings. In Belo Horizonte, the companies identified occupy only Class A+ space. The return of these 1,775 m² to the market would raise the segment’s vacancy rate from 1.83% to 3.28%, an increase of 1.45 percentage points.
