Brazil Office Market Space Update – February 2010 (Quarter 4, 2009)

February 17th, 2010 by Ruban Selvanayagam 1 Comment
The Brazilian office space market remained stable throughout the global economic downturn with leases being on average 8.7 percent higher than the year previous.  The year was, nevertheless, signified with uncertainty and the completion of a number of buildings were postponed.  For this reason, the first quarter saw lease values drop and then rise again in the second half of the year as the country officially moved out of recession. Please see the graphs below with the latest statistics referring to the
last quarter of 2009 (published in February 2010).

The following facts are worth noting:
  • São Paulo and Rio de Janeiro remain the largest real estate markets in the country;
  • In the 4th quarter of 2009, over 92,000m² of office space was absorbed in the cities of Rio de Janeiro, São Paulo, Brasília, Porto Alegre, Curitiba, Salvador and Vitória;
  • Lease value rises in 2009 were largely driven  by cities outside the Rio-São Paulo axis – most notably in Brasília (Distrito Federal);
  • The largest amount of new office buildings in 2009 were constructed in Curitiba and Brasília;
  • Rio de Janeiro continues to command the highest lease rates for Class A office space ($BRL 90.70 compared to $81.67 in São Paulo);
  • The vacancy rate of office space in the cities of of Rio de Janeiro, São Paulo, Brasília, Porto Alegre, Curitiba, Salvador and Vitória increased by 0.5 percent from December 2008 to the same period of 2009;
  • Brasília saw a significant rise in vacancy rates (21.96 percent compared to 1.84 percent in the year previous) along with Brazil’s third largest metropolitan city, Salvador (21.96 percent compared to
  • 2.67 percent in the same period of 2008).  It is worth noting that these two markets are very small and so a single office building can have a large effect on market indicators (in Brasília, for example, two large office buildings were completed);
  • Average lease figures decreased in in two of the countries wealthiest areas: Rio de Janeiro (-4.53 percent) and Porto Alegre (-11.21 percent). These two cities also saw also saw vacancy rates fall (4.05 and 5.24 percent respectively);
  • There was no new buildings in Vitória and the vacancy rate remained unchanged.
Information sources: Cushman & Wakefield; Fundação Getúlio Vargas; the Instituto Brasileiro de Geografia e Estatística, IBGE (Brazilian Institute of Geography and Statistics); Fecomércio Rio de Janeiro (Rio de Janeiro Chamber of Commerce); the Federação do Comércio do Estado de São Paulo (São Paulo Chamber of Commerce); Federação do Comércio de Brasília (Brasília Chamber of Commerce); Federação do Comércio Varejista do Estado do Rio Grande do Sul (Porto Alegre Chamber of Commerce); Federação do Comércio do Paraná (Curitiba Chamber of Commerce); Federação do Comércio de Bens, Serviços e Turismo do Estado da Bahia (Bahia Chamber of Commerce, Service and Tourism) and Federação do Comércio do Estado do Espírito Santo (Vitória Chamber of Commerce).