• Read more: Petros Sells Office Tower in Rio for BRL 128 Million with a 10.83% Cap Rate; Here’s What You Need to Know

Class A+ and A properties follow different trajectories, with Class A assets performing better than Class A+ properties. Currently, the vacancy rate for Class A offices is 26.27%, while Class A+ buildings show a higher rate of 30.96%.

The worst period for Class A+ offices occurred in 2017 when vacancy peaked at 50.51%. This was due to the delivery of 83,000 square meters of new developments in the Centro and Porto areas, combined with negative net absorption. Meanwhile, Class A properties registered a 32.86% vacancy rate in the same period, but despite the addition of 21,000 square meters of new stock, they showed positive net absorption.

The only time when A+ properties had a lower vacancy rate than Class A assets was between Q4 2019 and Q1 2022. Since then, Class A buildings have consistently maintained a lower vacancy rate.

• Read more: A+ Office Buildings Have Lower Vacancy Rates and Greater Resilience During Crises

While Class A+ and A properties have fluctuated at times, they have maintained a downward trend in vacancy. The same cannot be said for Class B assets, which have faced sharp increases in vacancy rates since the beginning of tracking.

Currently, Class B vacancy stands at 40.23%, the highest among the three categories. Even in its lowest recorded period, the vacancy rate was still high, reaching 28.53% in Q2 2017.

Despite the slight overall improvement, Rio de Janeiro still faces challenges in its office market. The key question is: why is this happening?

Most office tenants in Rio belong to the FIRE (finance, insurance, and real estate), oil and gas, government, and nonprofit sectors, along with a segment of public services. However, one specific factor could further exacerbate the difficulties: the Central Bank’s decision.

While companies worldwide are reinforcing the return to in-person work, the Central Bank has taken the opposite approach, implementing a 100% remote work policy in its building on Avenida Presidente Vargas in downtown Rio. The office has been completely vacant since last week. Without an official justification, the decision stands in contrast to moves by major corporations like Google, Amazon, Disney, and JP Morgan, which have abolished or significantly reduced remote work.