Stability Persists in High-End Office Vacancy Rates Across Prime Regions of São Paulo in 3Q23

The vacancy landscape in high-end offices (Class A+ and A) within the Central Business Districts (CBDs) of São Paulo held steady in the third quarter of 2023, maintaining a 23% vacancy rate, consistent with the preceding period. These statistics are derived from the research conducted by SiiLA, a complete hub for commercial real estate solutions in the Latin American market.

Despite the introduction of new inventory, with asset deliveries in the Vila Olímpia and Pinheiros regions contributing over 23,000 square meters to the monitored corporate floor space by SiiLA, the vacancy rate remained unaffected.

The new corporate floor developments that have become part of the inventory are: Auri Plaza Faria Lima and Pátio Rebouças. Despite its name, the former is situated in the Vila Olímpia region on Fiandeiras Street, carrying an A+ classification with 14,447 square meters of leasable space. On the other hand, Pátio Rebouças offers 8,759 square meters of leasable space and is classified as Class A. It stands at 12 stories and is located in the Pinheiros region, near the Fradique Coutinho subway station on the yellow line. This asset was developed by RBR Asset, an independent asset management firm focusing on real estate and infrastructure.

The primary driver of this semester’s performance was the volume of new leases surpassing returns, resulting in a positive net absorption of 17,465 square meters. This reversal from the previous quarter's negative net absorption (at -17,517 square meters) underscored the robust market dynamics at play.

São Paulo encompasses a total of 11 primary office regions monitored by Market Analytics, including Berrini, Chácara Santo Antônio, Chucri Zaidan, Faria Lima, Itaim Bibi, JK, Marginal Pinheiros, Paulista, Pinheiros, Santo Amaro, and Vila Olímpia, along with their adjacent areas.

According to SiiLA data, Berrini and JK were the standout performers in the last quarter. Berrini experienced a vacancy rate of 19.3%, a decrease from the previous quarter's 20.7%, coupled with a net absorption of 4,676 square meters. Meanwhile, JK witnessed a reduction in vacancy from 6.1% to 5.4%, with a net absorption of 2,400 square meters, highlighting their impressive market resilience.