Offices were the properties that were released the most due to the effect of the pandemic and the growth of remote work. Although little by little the corporate real estate market is recovering demand and the number of rental operations, the novelty is that the search for offices with a surface area of 500 square meters predominates.
From the sector, they highlight that since the beginning of the year more than 300 operations were carried out and the majority were carried out in the northern corridor of the city of Buenos Aires, especially in Palermo, Belgrano and Núñez; and also in the Catalinas area.
mariana stangeof Mariana Stange Real Estate, told infobae that the interest on the part of the companies persists. “We are receiving many inquiries and visits, we notice that the market recovery that began last year is continuing. However, the decision times are longer due to the political and economic situation that we are going through, ”he highlighted.
The development of corporate Real Estate, like most businesses in the country, is subordinated to the growth of the real economy. A context of high inflation and exchange rate delays poses a difficult scenario for new developments to emerge and for tenants to undertake massive agreements.
“Today, companies are looking for offices that are around 500 m2, when before they were 1,000/1,500 m2 on average. Due to remote work, they do not need to locate all their employees in a single building at the same time. The offices are meeting areas for collaborative work”, he explained. Nicholas Ferrerofrom CBRE.
The most requested offices are those that are fully armed; if they have furniture, better. We also have searches for tiny offices (less than 100 m2). There are two types of tenants, companies and entrepreneurs or professional studios”, Stange added.
Companies saw an opportunity in recent years to reduce their work spaces and thus reduce fixed operating expenses. But the current scenario shows that they need offices again.
“In the past, well-located buildings with connectivity were mainly sought, but now those that also have outdoor spaces and amenities within the property itself,” Ferrero clarified.
Priority is given to those equipped with air conditioning and distribution, divisions, light fixtures, curtains, and wiring. “The garages are not decisive. Yes, the safety of the environment and the proximity of shops and gastronomy. Those offices with the possibility of cross ventilation and open spaces are valued”, added Stange.
Office vacancy is 17.76% and there are no variations in the entry of new buildings. However, regarding the new stock of offices, the incorporation of some 300,000 m2 is expected in the remainder of 2023, mainly in the northern area of CABA.
The agreements that are agreed between owners and companies or professionals can end after 6 months. The duration of office rental contracts generally last between 3 and 5 years
Juan Manuel Farola, from Colliers, said that “the focus that grew the most in demand and occupation of spaces is the Libertador corridor, between Belgrano and Núñez. The items that drive demand are companies that operate in oil and gas, technology, and corporate consulting services, among others.”
There are inquiries from the banking, financial and pharmaceutical sectors. “Companies may seek to relocate because the hybrid work model allowed them to make a downsize (reduce size). And since prices fell, the opportunity to make a quality leap from a lower category asset to a premium one presents itself,” Ferrero added.
The values remain stable since the last two years, “with slight variations in submarkets, depending on the greater or lesser vacancy in each of them,” said Farola.
According to Colliers, the average rental value of offices in CABA is USD 22.31 per square meter.
Stange said that downtown Buenos Aires, with high vacancy, presents opportunity values, especially for those companies that take advantage of the fly to quality (quality leap), with a range between USD 12 and 15 per m2 for the same category.
Most of the contracts are being made in pesos or in dollars at the official exchange rate. The adjustment that was semi-annual is evolving towards a quarterly or four-monthly periodicity, product of the high devaluation of the peso. This is accepted by the parties.
“The tenant also pays VAT, expenses and taxes,” added Stange.
In general, office rental contracts are Triple Net (NNN). Where the tenant agrees to pay all expenses, including property taxes, building insurance, and maintenance costs, which are added to rent and utilities.
“In CABA, a garage is usually included for every 100 m2 rented, but in Greater Buenos Aires it can vary. The agreements range between 3 and 50 years, but in general they are stipulated in a range of 3 to 5 years”, concluded Ferrero.
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