After two years of crisis, the office market seeks to find its north. Little by little, the companies began a progressive and sustained process of returning to face-to-face work, responding to the new social and health needs. In this scenario, downtown Buenos Aires is shown as one of the most affected spaces. Many companies seek to relocate to more decentralized positions and thus gain from improvements in infrastructure and design to services, both for their employees and customers.. Undoubtedly, this translates into a new geography for this sector. “In recent times, many companies have sought to leave the center of Buenos Aires, and -in most cases- they have chosen to form a migration process with a northern destination,” says Mercedes Pagliettini, Senior Broker, Cushman & Wakefield. And adds Fernando Novoa Uriarte, director of Newmark: “This remains an attractive area for the relocation of companies. The choice is supported, in large part, by the proximity to the homes of its employees and managers”.
According to the latest Office Market Beat report from Cushman & Wakefield, a global corporate real estate services company, the Dot Zone and the Technological District, were the poles chosen by the companies to settle. In this way, the trend of contracting surface in the “Non-CBD” zone (not central) is accentuated, since during the last quarter of 2021 100% of the occupations were constituted in this sector, a trend that was replicated to throughout the first months of 2022. These, according to the study, are two of the submarkets that register the greatest positive absorption.
Among the emerging poles, the following stand out: Parque Patricios and Palermo. A research work carried out by the firm Newmark Argentina -which has as its axis the Class A office market in Buenos Aires- warns that both areas are in the process of consolidation, where rental values are close to the market average, oscillating between US$23 and US$25 per square meter.
Regarding the Parque Patricios submarket, Novoa Uriarte explains that this is presented as an area with great potential, not only because it has tax benefits, but also because in recent times there has been a noticeable growth in the area’s commercial and service offerings. “Due to different factors, this office complex has been raising the weighted average rental price in the area,” says the broker. For Gonzalo Pellejero, manager of offices and premises of the Adrián Mercado Group, demand is currently moving towards the neighborhoods farthest from downtown. “Today the consultations are multiplied by offices in Palermo, Belgrano, Recoleta, Monserrat and Parque Patricios (which has tax incentives because it is a pole that has the endorsement of the Buenos Aires state). Within the center of the city, there is currently interest in the corridor of Avenida 9 de Julio, since the values there fell notoriously”, maintains the specialist.
Experts agree that in the Pan-American Corridor the difference between its heterogeneous offer continues to be observed due to its geographical extension.
The two areas that concentrate the largest number of square meters of Class A or premium offices are north of Greater Buenos Aires and Puerto Madero, between the two they account for 41.2% of the inventory (distributing almost equally 20.7% and 20.5%, respectively). In third place on the podium of the poles that have the most square meters is Catalinas with 16.5%, according to a report by the company Colliers International.
Currently, according to Pagliettini, demand is concentrated in two large groups. On the one hand, there are companies that seek to make a leap in quality and for this they focus their search on high-level buildings; while, on the other, there are the companies that need to move, but do not have the necessary capital to face the adventure of a relocation (either what the set-up of the place demands or what corresponds to the transfer). “What the first group usually requests are quality buildings, with good technical characteristics and the latest generation; while the second seeks ready-to-enter offices, preferably with furniture and where the initial entry/investment cost is reduced to the bare minimum and essential,” says Pagliettini.
What about prices?
The report prepared by the Adrián Mercado Group shows that the average rental price asked for premium offices is between US$25 and US$30/per m². These prices are given punctually in some towers of Catalinas, Plaza Roma, Puerto Madero, Corredor Libertador and Polo DOT.
In the center, and in those spaces of lesser category, there are lower and very competitive prices, between US$10 and US$20 per square meter., depending on the surfaces, locations and functionalities of the properties. “In the midst of this scenario, class B offices seem to be the most resistant,” explains Pellejero. In this case, the average prices range from US$7 or US$8 per square meter to US$13 or US$15, depending on the state of the building, the characteristics of its spaces and the age of the property.
Buenos Aires, the most expensive
Regarding the region, Buenos Aires is leading the ranking of cities with the highest value per square meter of premium offices. According to the report on the premium office market in South America prepared by Cushman & Wakefield, a global corporate real estate services company, La Reina del Plata shows the highest rental price measured in dollars, with a value of US$ 24.7/m².
The podium of the most expensive cities in this category is completed by Santiago de Chile, with US$19.3/m² and São Paulo, with US$19.2/m². They are followed by Bogotá, at US$18.1/m², and then Lima and Rio de Janeiro, with US$16.3/m².
As for the new meters under construction, in 2022 the entry of 140,692 m² is expected, among which the building of Worko, which will contribute 39,114 m² to the GBA Panamericana submarketwhile on the corner of Libertador and Pampa 20,416 m² are built.
“The northern zone of CABA, Palermo and the Pan-American corridor continue to be areas of attraction for demand and are the ones that concentrate the largest area under construction (63.1%), one more sign that developers continue to bet on diversification towards the north of the city. On the other hand, The case of Palermo stands out, which concentrates 25.5% of the meters under construction, totaling 60,257 m², of which its entry is expected by 2023adding to the consolidation of this emerging pole”, explains Novoa Uriarte.
Within the city, the highest revenues are expected in the Catalinas-Retiro submarket, estimating for 2023 the entry of 42,000 m² at the corner of Avda. Córdoba and Alem. Regarding the ranking of the projected square meters, the submarket that leads this category is Catalinas–Retirowhich brings together the highest concentration of projects.