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Market Analytics data reveals that the national average vacancy rate in A+, A, and B offices is 25.08%. In São Paulo, this number is slightly lower, 23.22%, if we look at the entire city, or 21.39% if we consider only the CBDs (Central Business Districts) regions. The struggle to achieve the coveted zero vacancy is one of the biggest challenges for property owners.
The Continental Tower, a building in the Cidade Jardim Center complex in São Paulo, in the Marginal Pinheiros region, suffered from this problem. Until 2020, the tower's floors consisted of two sets of 809 m², aiming to meet tenants who needed large areas for their operations. However, the strategy was not working, and the building faced high vacancy rates. At the end of 2018, the vacancy rate for the asset was 51.6%, in 2019 it was 49.7%, and in 2020 it was 46%.
Hedge Investments, the manager of the CJCT11 fund, which owns 9 floors in the tower, observed some market trends and made a bet that seems to be paying off: they built walls and, instead of offering tenants large floors, started bringing in smaller units for companies looking for more streamlined spaces. From mid-2020, the floor gave way to eight units ranging from 176 m² to 276 m², on the 5th and 6th floors.
Today, at the end of 3Q 2023, the tower's vacancy rate is 29.8%, a reduction of 16.12 percentage points.
With the low vacancy rate, the seesaw of supply and demand came into play. Monitoring by the SiiLA Market Analytics platform shows that with fewer vacant spaces, there was a price recovery in the development. In total, between 2015 and 2023, the asking price for Continental Tower rose by 42%, jumping from R$ 67.98/m² to R$ 96.30/m².
The Cidade Jardim Corporate Center business complex is in the southern part of the city of São Paulo, in the Marginal Pinheiros region. Developed by JHSF Engenharia, the complex offers a private area of 76.9 thousand m², distributed across 3 towers, Continental Tower, Capital Building, and Park Tower.
In a report in November 2021, Hedge announced the change as follows:
"Looking to bring new possibilities for occupations and meet the profile of companies looking for spaces in the region, the company ITS Informov was hired to prepare a study for the floors of the Continental Tower.
The work was developed throughout the first semester and resulted in the project to divide the floor into up to eight sets, in three distinct plant options, with possibilities of flexible spaces, with shared use areas such as reception, lounge, waiting room, and meeting rooms.
In order to define the best subdivision, existing systems and installations on the floors were taken into consideration, such as escape routes, positioning of emergency stairs, compartmentalization, fire doors, hydraulic shafts, and air conditioning system.
Thus, the floor division was suggested to meet the demand for smaller sets, ensure compliance with fire safety standards, and generate less need for adaptation of existing systems, and consequently reduce construction costs. For this, it was chosen to consider the areas of influence of the air-conditioning equipment to delimit each set."











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