The high-end office market in Rio de Janeiro is entering a phase of recovery following a two-year downturn. In 2022, leasing activity surpassed returns, signaling a positive shift. Net absorption, which measures the amount of leased space minus returns, was negative in 2020 and 2021 but ended 2022 with a positive figure of 33,000 square meters.

Since then, the "fly to quality" movement has had a significant impact on the statistics. Companies are migrating from Class B properties to high-end spaces (A+ and A). For example, the fashion retailer Reserva traded a warehouse in São Cristóvão for an A building in Orla region, Centro Empresarial Visconde de Ouro Preto (CEVOP).  We recently published a content about these changes in the city of Rio de Janeiro.

According to data from the SiiLA Market Analytics platform, the vacancy rate for A+ and A corporate floors stood at 32.4% in 2Q23.

Centro submarket

The downtown area of Rio (Centro) has always been an important commercial region with the largest stock of offices in the city. The occupancy rate for high-end developments in the downtown area reaches 73.5%. The acquisition of the Serrador building by the Municipal Chamber contributed to the reduction in vacancy, with 18,000 square meters occupied by the public entity in the beginning of the year.

Expectations are that with public policies like Reviver Centro Program, the region will experience a rebirth. Additionally, with the return to in-person work, it is anticipated that employees will seek housing closer to their workplaces, spending less time commuting.

This initiative aims to attract more residents to the downtown and Lapa neighborhoods, promoting urban and environmental revitalization, the preservation of existing buildings, and the construction of new real estate ventures.

Investors are interested in this opportunity as buildings that align with the plan have access to a range of benefits, such as reduced Real Estate Transfer Tax (ITBI) and exemption or suspension of tax credits related to Property Tax (IPTU) and Domestic Waste Collection Fee (TCL).

With the combination of the Revised Master Plan and the Reviver Centro Urban Plan, the real estate market in Rio de Janeiro presents positive prospects for the future, with the recovery of the office sector and the appreciation of properties located in the city center.