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Along with the residential sector, a rising consensus that the Brazilian commercial real estate market may also be stabilising has been appearing – including by Estácio Sá of Yuny, a development company focused on the high end market in central São Paulo.

Speaking with the Exame magazine, Sá indicated that sales figures in the last few months have pointed to a deceleration and due to factors such as the rise in interest rates at the start of 2011, investors have become more selective in their decisions.  Nevertheless, the level of sales has still been higher than historic records demonstrate – two thirds of commercial launches made in São Paulo are already with over 60 percent of units sold.  “In terms of economic viability, developers generally need to sell 50 percent of stock within up to 12 months after launch.  This is what is happening – but there are no developments that are completely sold within a weekend as was the case in 2010,” he commented.

Sá also believes that the rapid commercial property price rises in recent years will no longer be the case for the immediate future: “Prices were moving up so quickly because developer costs were mounting high and also the market was repressed for some time in the previous decade.”  For the Yuny company, demand for its commercial property products nevertheless continues to be very strong – Sá illustrates a development property launch in the Avendia Pedroso de Moraes (west zone of São Paulo) at the close of 2010 which was completely sold out in one week.  Another high-end project in the prime Faria Lima region already has 12 of the 18 levels pre-leased and 2 in the contract signing stage – according to Sá: “we could have already leased all the development but we are not willing to move on price.”  A commercial opportunity in Barra de Tijuca (close to where several events will be held during the 2016 Olympics) that was previously marketed by this website sold within 2 days of launch (note we are no longer publicising real estate opportunities that are not related to the Fez Tá Pronto base of the pyramid construction programme).

Sá also warns that investors should understand when exploring the increasingly popular trend of buying office space that commercial developments can take up to three years to complete.  It should therefore be ensured that demand in the area chosen will remain high and also there is not an over-supply of stock as what some are debating will occur in the region surrounding the Avenida Chucri Zaidan in São Paulo (although Sá believes there are some good opportunities there).