First-of-its-kind study finds Santa Catarina has Brazil’s highest replacement cost for logistics parks

Santa Catarina is the most expensive market in which to build a logistics park among the 17 analyzed by SiiLA. Its estimated replacement cost reaches R$4,106 per square meter of gross leasable area (GLA), ahead of São Paulo at R$3,893 and Alagoas at R$3,795. At the other end of the range is Paraíba, at R$2,406 per square meter. The gap between the highest and lowest costs is approximately 71%.

For a hypothetical development with 10,000 square meters of leasable area, that gap would represent roughly R$17 million. The comparison follows the study’s assumptions and includes land acquisition, earthworks, construction, additional development expenses and contingencies.

Land prices help explain regional differences. Alagoas has the highest average land price in the sample, at R$787 per square meter of land. Although the state has one of the lowest construction costs, it ranks third in total replacement cost.

“A warehouse’s value lies in the income it generates. That is why knowing how much it costs to build is not enough. The right question is whether the rent the market pays today justifies that cost. When the property’s value, calculated from its income, exceeds its replacement cost, there is room for new projects. When it falls below, the market is signaling that it does not yet pay enough to justify building there,” says Giancarlo Nicastro, CEO of SiiLA.