High-Performance Industrial Market: The Growth of A+ and A Properties in São Paulo

In addition to increased demand for industrial properties, the rent has also been on the rise, according to SiiLA's data. The average asking price for A+ and A prime industrial spaces has consistently increased

By 2021, the average asking price was below R$ 20.00/m², surpassing R$ 23.00/m² in 2022 and reaching R$ 28.00/m² in 2023. This growth reflects the high demand for quality industrial spaces, especially in key strategic regions in São Paulo, such as Guarulhos, Barueri, and Cajamar.

The average lease value per square meter of A+ and A prime industrial properties has shown significant growth. In 2024, the average price reached R$ 27.48/m², marking a notable increase from 2010, when the average was R$ 17.62/m².

The vacancy rate in the industrial property market has been on a downward trend. In 2021, the vacancy rate was 17%, but it dropped to 12% by 2023. This shift signals an increasingly competitive market, with less space available for lease.

A clear example of the market adapting to new economic conditions is the contract signed between LG and Prologis Cajamar property in December 2024. The lease value of this transaction was of R$ 30.00/m², reflecting the rising prices for high-quality industrial properties. The Cajamar area, where the property is located, has a vacancy rate of 7.94%.

Throughout 2024, SiiLA's platform tracked other transactions in the R$ 30.00/m² range. One example was Shopee's lease of 74,000 m² at Log São Bernardo do Campo.

• Read more: VTPL11 Acquires a R$ 250 million Stake in a Pre-Leased Industrial Property for Shopee

King Star, a mattress manufacturer, also leased space at Cy.Log Embu, paying R$ 30.00/m². These prices are above historical averages and highlight the increasing competitiveness of the market, where well-located, high-standard properties are becoming increasingly scarce.

A chart of leasing transactions shows a steady upward trend in the transaction value, driven by high demand and the scarcity of available properties.

With asset appreciation, the sales prices of industrial properties have also seen significant growth in recent years. In 2024, the average transaction price for A+ and A prime industrial properties reached R$ 3,769/m², a substantial increase from 2010, when the average price was R$ 2,000/m².

The Cap Rate, an indicator of profitability for investors, has seen notable fluctuations over the years. In 2024, the Cap Rate stabilized at around 8.22%, slightly lower than the 9.90% recorded in 2010. The decrease in the Cap Rate suggests that investors are accepting lower yields, driven by the continuous appreciation of assets, with a focus on the growth potential of São Paulo's industrial market. This trend is occurring against a backdrop of high interest rates, with the Selic rate currently at 12.25% per year, compared to 8.75% at the beginning of 2010, which has led to a shift in capital flows toward other investment alternatives.

In recent years, the volume of delivered properties has been increasing. In 2021 and 2023, more than 1.3 million square meters were delivered to São Paulo's industrial market. In the last two years, the figure remained below 1 million square meters, but still represented a significant number: 862,000 m² in 2023 and 820,000 m² in 2024.

SiiLA's data also shows that the pre-lease rate reached 54% in 2021, representing 717,000 m² of pre-leased space. By 2024, only 33% of the delivered stock was pre-leased, amounting to 276,000 m².