Responsible for the largest high-end office market in Brazil, the city of São Paulo ended 2021 with 25.15% vacancy in the main commercial regions. The data are from SiiLA, a multinational of data and analytics solutions for the commercial real estate market in Latin America. They showed a slight drop compared to the previous quarter when the rate was 25.94%.

In 4Q21, the capital of São Paulo registered a higher number of leases than devolutions in the period, with a positive balance of 26,600 sq meters, of which a little more than 8,000 sq meters had been leased by companies in the financial sector.

Graph 1: Variation in occupancy between the 3rd and 4th quarter of 2021 by sector of activity of the leasing companies according to SiiLA data from the Office market, São Paulo, in all CBDs regions, in Class A+, A, and B developments.

The Faria Lima region showed the best performance, where the occupancy rate, which was 88.5% in the third quarter of 2021, reached close to 95% of slabs occupied by the end of 2021. Large national and multinational companies appear among the main area takers in the region: Google, Shopee, and BTG Pactual lead the list.

The JK region also presented a small drop in the vacancy rate, closing the year at 10.43%. One of the main leases was XP Investimentos, which leased a new area in the São Paulo Corporate Towers.

"The high-end office market was one of the most affected among commercial real estate during the last two years of the pandemic. We left a rate of 15.95% recorded in the 4th quarter of 2019 and reached close to 26% in the 3Q of 2021. The small drop from the 3rd to the 4th quarter of 2021 can be interpreted as a sign showing that the activities in the offices are resuming gradually, as well as their occupation", according to the CEO of SiiLA Giancarlo Nicastro.

Brazil: vacancy rate remains above 25% of available office space

The impact on office occupancy in Brazilian cities monitored by the SiiLA platform remains with a high vacancy rate, closing the year 2021 at 25.58%.

With a total inventory of 13.7 million sq meters of offices in classes A+, A, and B, SiiLA's monitoring shows that during 2021 more than 313.6 thousand sq meters of the area of this type of property were delivered. The last quarter of the year presented a negative balance between leased and returned locations, of -27.3 thousand sq metres.

The advance of vaccination throughout the national territory had been received with the hope for controlling the pandemic and a massive return of economic activities, especially for high-end corporate buildings. "However, the arrival of the Ômicron variant once again postponed plans to return to the offices", explains Nicastro.

"In addition to the pandemic, high interest, unemployment rates, inflation, and economic slowdown contributed to part of the business community choosing to terminate their lease contracts, resulting in negative net absorption in the period", he adds.

São Paulo and the other monitored capitals continue with vacancy rates are considered high, compared to what the market considers "desirable", which would be close to 15%. Considering the general market (classes A+, A, and B), Rio de Janeiro presented a vacancy rate above 37%.

The Brazilian capital, Brasília, which received new stock in the third quarter of 2021, recorded a better performance in terms of occupancy, with its more than 740 thousand square meters leasable, with 84% of them leased. Curitiba has 25% of its commercial properties vacant; Porto Alegre with 34%. And Belo Horizonte maintained the vacancy rate at 20.6% without receiving new stock in the period.