Lease Renewal at R$ 400/m² in Faria Lima’s Core Could Impact Local Real Estate Market

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Felipe Leite, director of Primaz Co., notes this upward trend is expected for Faria Lima, given low vacancy rates, yet believes there is an upper limit for rents.

“It’s natural to see prices exceed R$ 400/m², but when there are excellent buildings a block away on Faria Lima at competitive prices, you create a ceiling. Just because space is scarce doesn’t mean people will pay R$ 600 or R$ 800 per m². This eventually supports secondary areas near Faria Lima. However, we will certainly see many cases above R$ 400/m² from now on,” Leite comments.

In the third quarter, Market Analytics data shows that Faria Lima has a 9.7% vacancy rate and recorded a net absorption of 10.5 thousand m², in A+, A and B properties.

Leite believes that nearby areas like Vila Olímpia, Jardins, and Paulista may benefit from these higher rents. Vila Olímpia, for example, has a vacancy rate of 13.5%, Berrini at 20.1%, and Pinheiros at 16.2% — all close by and ready to accommodate companies seeking more competitive prices.

“When some markets get too expensive, companies start considering other areas. The Berrini area, which is quite worn, still captures part of this demand. Vila Olímpia has partly benefited from its proximity to Faria Lima. Undoubtedly, the whole chain is interconnected, and high prices drive the broader market,” Leite concludes.