São Paulo high standard office market closes the year with a 22.4% vacancy rate
New stock was responsible for adding over 270,000 m² to the leasing market.
For the third consecutive quarter, the vacancy rate of high-standard corporate properties in the city of São Paulo grew. In the 4th quarter of 2020, the rate was 22.4%, an increase of 3% over the previous quarter, according to JLL's First Look study.
The average asking price in the city was 84.81 BRL, or 0.12% less than in the previous quarter. For Yara Matsuyama, Office Leasing Manager at JLL, the stable value reflects the combination of two factors.
“There were falls in rental prices in some areas of the city, which shows greater flexibility on the part of the owners to keep current occupants or to attract new businesses. In the primary, more affluent regions, where the vacancy is very low, the prices remain higher and there is no prospect of falling,” he explains.
According to the JLL survey, the quarter had negative net absorption of 25,500 m². Yara points out that within the scenario of pandemic, home office, contract review, returns, and delivery of new inventory, the rate fell within expectations. Despite the reduction in the pace of negotiations, the executive points out that the expectation of vaccinations may influence the market.
“The feeling, at the moment, is that we will again have a large volume of negotiations, with companies seeking market alternatives and solutions, such as flexible spaces and decentralization of offices to suit the post-pandemic era”, he points out.
Prospects for 2021
An additional 208,200 m² of new stock are expected to be delivered in 2021. The volume should impact the absorption and vacancy rate, which should continue their growth trend. However, Yara points out that this should be a year of high volume of negotiations.
“2021 will be the year of efficiency. Companies should look at their costs and needs in order to make the most of the available resources. Part of this analysis should focus on the portfolio and ways to optimize it,” says the executive.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in over 80 countries and a global workforce of more than 91,000 as of December 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.