An important issue to understand the relevance of location to determine the value of a property is understanding how regions or clusters arise, which consist of the formation of a centrality. It can be born from an urban operation, like the origin of the Faria Lima office region, which originated from incentives from the government, with the arrival of a big company, among other ways. In Rio de Janeiro, we can mention Macaé, which flourished with the installation of Petrobrás in the region.

It is for these reasons that we normally have a concentration of offices in large cities. To give you an idea, the São Paulo region, currently the largest office market mapped by SiiLA Brasil, has almost 8.5 million square metres in the corporate slabs of classes A+, A and B, 11 CDB (Central Business) regions Districts) and nine secondary regions.

Offices tend to cluster due to economies of scale and proximity to customers, favouring synergy between companies and driving business. Another important drive is accessibility, where the offer of public transport and the quality of roads and pavement greatly influence.

The main location factors that affect the value of corporate slabs are public transport infrastructure, proximity to other developments and the offer of commerce and services. In São Paulo, the average asking price is 79 reais per square meter, and the occupancy rate is 78.9%, speaking of the general market (classes A+, A and B).

No wonder that the most desirable regions for offices, such as Itaim Bibi, JK and Faria Lima were the ones that least felt the impacts by the Covid-19 pandemic, as we can see in the graph that shows the asking price versus the vacancy rate in CBD regions of São Paulo (classes A+ and A). In addition to the location factor, these are regions occupied mainly by companies in the financial sector and large multinationals, making up the tenant profile that tends to suffer less in periods of crisis, such as the one we are going through.

To give you an idea, in the second quarter of 2019, even before the pandemic broke out, the vacancy rates of high-end offices (A+ and A) at Itaim Bibi, JK and Faria Lima were 0%, 1.4% and 8.5%, respectively. In the same period of 2021, Itaim Bibi remains 100% occupied, while JK and Faria Lima observed a slight increase in the vacancy rate, with 2.6% and 12.3%, noting that we had the delivery of Birmann 32, in Faria Lima, which added nearly 50,000 square metres of corporate slabs in July 2020.

The data showed that the pre-pandemic period was designed as the best moment for offices in the historical series of SiiLA Brasil, which has monitored this market since 2015. At the time of the construction of Birmann 32, the market speculated pre-lease values in around 250 reais per square meter in Faria Lima. Even with the economic crisis generated by the health crisis in the country and the world, the project was delivered partially pre-leased to technology giants such as Facebook and other companies.

And newer stock comes around in the Faria Lima region. The delivery of Faria Lima Plaza, another high-end office building with 22 floors, six basements and 40,000 square metres, is scheduled for the next few months. The project already has slabs pre-leased to essential players in the e-commerce segment.

While the pace of the second dose of the vaccine reaches the economically active population and companies organize their offices for the return of their employees, albeit in a hybrid way, the trend is for the office market to regain momentum for recovery.