São Paulo’s competitive office vacancy rate is nearly half the reported rate

São Paulo’s vacancy rate for Class A+, A and B office space stands at 13.77%, equivalent to 881,400 sq m of vacant space within an analyzed stock of approximately 6.40 million sq m. But behind this figure lies a largely overlooked question: how much of that vacant space is actually on tenants’ radar?

An analysis conducted by SiiLA’s market intelligence team using its Market Analytics platform shows that at least half of this vacant space is currently outside the spotlight of leasing negotiations. This is known as “structural vacancy”: space that has remained continuously unoccupied for more than three years. Any intervening occupancy or interruption in the data series breaks that continuity. 

Of the total vacant area, 454,800 sq m fall into this category, representing 51.6% of the city’s unoccupied space. This breakdown helps distinguish between units that are off tenants’ radar and those that genuinely attract competition and participate in the office leasing cycle. Once this inactive space is excluded, 426,600 sq m remain available. 

As a result, the competitive vacancy rate falls to 7.18%. This analytical metric does not replace the city’s overall vacancy rate, but provides a perspective in which only a fraction of the competitive stock is actually being considered as a leasing option. 

By asset class, Class A properties currently have approximately 207,600 sq m of vacant space, of which more than 70% is classified as structural vacancy, or around 148,000 sq m. After the adjustment, the category’s vacancy rate falls from 18.2% to approximately 6%. 

The weighted average length of time that the analyzed sample has remained off the market’s radar is 7.1 years. Of the total recorded, 56.2% became vacant before 2020, while only 2.5% of this space became vacant from the first quarter of 2023 onward, showing that the challenge of attracting and retaining tenants is not new. 

The study does not establish why each space remained unoccupied, but several hypotheses could help explain the lack of sustained occupancy. These include liquidity issues or a mismatch between the property and market requirements, related to factors such as location, floor plate configuration, technical specifications, investment needs, pricing or market positioning. The analysis does not assess each of these hypotheses individually or draw definitive conclusions about the causes.