Industrial properties problem: low vacancy and rising costs pressure market, executives say
- Vacancy near 6% and low delivery volumes tighten warehouse supply, drive rents higher, and pressure expansion decisions across Brazil
Recent data from SiiLA’s Market Analytics shows that vacancy rates in logistics condominiums continue on a downward trajectory. At around 6%, the indicator is approaching a critical level, historically associated with a shortage of available space and upward pressure on prices.
What stands out, however, is that this movement is not being accompanied by a meaningful increase in new deliveries. Traditionally, the market operated with a peak of completions in the fourth quarter, followed by a weaker start to the year. But data from 2025 and early 2026 point to a break in this pattern: new supply volumes have remained low over several consecutive quarters.
The delivery chart reinforces this structural shift. After peaks above 1 million sqm in previous cycles, the market is now recording more restrained and irregular volumes, with no signs of a new robust development wave. In practice, this means the pipeline is failing to keep pace with absorption.
Construction costs
Over the past five years, the cost of building logistics warehouses in Brazil has risen from approximately R$1,301/sqm to R$1,932/sqm — an increase of 48.4%. Over the same period, official inflation measured by the IPCA accumulated between 30% and 35%.
In practical terms, this means construction has become significantly more expensive in real terms, with an additional increase estimated between 12% and 18% above inflation.
This gap helps explain the slowdown in new speculative developments. More than an inflationary effect, the increase reflects structural pressures on inputs such as steel and cement, as well as labor costs and logistical bottlenecks inherited from the post-pandemic period.
The result is a more selective market, with greater reliance on pre-leases and built-to-suit agreements to make new projects viable.
This mismatch between supply and demand is already being reflected in pricing. In some markets, rents are reaching levels close to R$50/sqm, driven by the scarcity of well-located Class A+ and A assets and increased competition among occupiers.
What is the market saying?
According to Marcio Siqueira, Executive Director of Operations at Log, the current environment signals a shift in investment dynamics. He notes that rising construction and capital costs have increased selectivity for new projects, reducing the volume of speculative developments and encouraging more strategic expansion, including in regions outside the Rio–São Paulo axis.
“Even in a challenging macroeconomic scenario, spaces in logistics condominiums remain occupied [...] It is natural that higher construction and capital costs bring greater selectivity, but this also creates opportunities to operate in new markets and regions,” he says.
At the same time, this environment has been driving demand forward. Most new leases have been closed through built-to-suit (BTS) contracts or pre-leases, a movement directly linked to the reduced availability of ready-to-occupy space.
“Companies are not just reacting to the shortage of warehouses; they are choosing to anticipate their contracts because they know exactly what they will receive: Class A assets, delivered strictly on time and with the infrastructure required for operational efficiency,” the executive adds.
“I believe the main issue relates to the scarcity of land. Even when land is available, the development and approval process can take considerable time — up to three or four years — due to environmental requirements from regulatory agencies. The most suitable plots have already been used, making the process more complex today,” explains Marino Mario, founder and CEO of Retha.
In addition, Mario notes that the geopolitical environment also justifies price increases, which will impact costs. However, he believes the main constraint on the availability of new warehouses and projects is, without a doubt, the shortage of land.
