The vacancy in offices in Alphaville is not a recent phenomenon, to say the least. According to a survey by SiiLA commissioned by Seu Dinheiro, the vacancy rate in high-end offices—classes A and A+—was 24.23% in the fourth quarter of 2019.

In other words, even before the onset of the COVID-19 pandemic, which led many companies to close offices and adopt remote work, Alphaville was already struggling with several partially empty buildings.

The issue is that since then, the unoccupied spaces have consistently increased, and rent has also declined, as owners have little negotiating power with potential tenants.

And not even the decrease in the number of companies implementing remote work and the return to in-person work have reflected in the region. By the third quarter of this year, Alphaville had a vacancy rate of 33.31% and an average price per square meter of leases still below the pre-pandemic period.

This trend contrasts with certain areas of São Paulo, where vacancy rates have been decreasing since the beginning of last year. In the Faria Lima region, for instance, vacancy rates reached 12% at the peak of the pandemic in early 2021 but have already dropped to around 5.2% in the second quarter of this year.

Mauro Lima, Managing Partner of the Real Estate division at Inter Asset, notes that this opposite trajectory in office spaces in areas already dominated by offices in the capital and Grande São Paulo is natural, as the recovery always starts with the prime market and expands to other less heated regions within the metropolis, such as Chucri Zaidan and Rebouças avenues.

"Alphaville is an excellent residential development; the houses there continue to be wonderful. The services they have in terms of restaurants, bakeries, and pharmacies are also great, but it's not an obvious office address, so companies end up giving priority to São Paulo."

Even managers who don't have vacancy problems aren't overly enthusiastic about the neighborhood's potential. One of RBR Asset's funds, RBR Properties (RRBR11), owns 5.6% of a property in Alphaville. The Pravda Building is fully occupied, but Caio Castro, Partner and Investment Committee member, explains that the exposure only happened due to a significant tenant's demand.

"We are at ease with the property because there is significant demand for the tenant's services, we acquired the property at a low cost, and this is a small portion of the portfolio. However, the region historically has a high vacancy rate", he stated.

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