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“There is no money” and consumption is falling, but local businesses have waiting lists on the most emblematic corners of the city - La Nacion Propiedades
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“No hay plata” y baja el consumo pero los locales tienen listas de espera en las esquinas más emblemáticas de la ciudad
Las marcas que tienen un local en las zonas más comerciales de la ciudad no dejan sus ubicaciones aunque los alquileres aumenten y las ventas de sus productos bajen
www.lanacion.com.ar
August 7, 2024
Brands that have a store in the most commercial areas of the city do not leave their locations even if rents increase and sales of their products decrease.
The corners of Acoyte and Rivadavia in Caballito are the most sought after by brands to have a store
Brokers and analysts of the commercial premises market describe this present as a “time of progress and recovery”. According to various private statistics, some Buenos Aires markets show full occupancy and a waiting list of tenants.
The commercial premises market has currently experienced remarkable activity in recent years, which has generated great expectations for the future. “The current economic situation presents challenges, however, vacancy rates remain at low levels, and there is significant commercial mobility ,” says Martín Potito, director of LJ Ramos Brokers Inmobiliarios.
Jessica Soledad Amendola, manager of the local and office division of Adrián Mercado, agrees with Potito's vision and says: " If I had to give the current retail market a score from 1 to 10, I would definitely give it a 7; that is, it is approved, although -of course- there are things to improve. Even in the dissimilar market, in some sectors of the city they have managed to reach 100% occupancy, while others are still in the process of reactivation," says the broker.
They were remodeling their house, lifted the carpet and found a treasure
For Lucas Desalvo, Retail and Last Mile specialist at Cushman & Wakefield, a global corporate real estate services firm, businesses with a good business plan and a good location are much more likely to succeed . “If the business is well conceived, it is difficult for it to fail. To do so, it is necessary to locate it on important axes, such as along subway line D ( Cabildo and Juramento , Santa Fe and Callao, etc.). Also in the suburbs there are classic sectors and popular corridors where outlets and mass consumption stores are located, and where rental prices can exceed the most exclusive areas of CABA,” says the Cushman & Wakefield specialist.
On the corners and blocks near Cabildo and Juramento, brands are fighting to get a location
The development of e-commerce , which requires small spaces for product delivery, as well as investments by new entrepreneurs in the digital market, gave a great boost to the commercial sector . Another point that favored the advance of the sector was franchises , which are showing, according to official data, that “there are more than 1,600 brands that adopted this format as a means of expansion and this translates into new commercial spaces. Investment in emerging brands has become an attractive strategy due to their lower initial capital requirement and the possibility of entering an already operational business,” says Amendola. And he adds: “ Currently, there are business opportunities in different areas due to the high demand after the pandemic.”
New entrepreneurs also deserve a separate paragraph. They have been entering this market in the most accessible locations, but they have also undoubtedly been a determining factor in the rebirth of this sector.
Commercial premises on Av. Santa Fe, Santa Fe and Pueyrredón area; Santa Fe and Callao.
Avellaneda Avenue is one of the important axes of the Flores neighborhood
The map of retail
Currently, as during the last quarter of 2023, the areas that are responding best are Caballito (Avda. Rivadavia and Avda. Acoite) and Belgrano (Cabildo and Juramento). “The first is a hub with sustained demand and where retail stores reign. This commercial submarket is one of the most robust in the Autonomous City of Buenos Aires, as demonstrated by its vacancy rate of around 0.7%,” explains Potito.The opposite side of both Caballito and Belgrano continues to be the Florida pedestrian area (the axis that has approximately 9,000 m² available). This corridor, which is mainly nourished by tourism and the movement that offices bring to the area, although it is recovering levels of activity, has undergone a major change in its composition. There, where the first brands used to dominate, today it has begun to be populated by second brands . The new scenario also proposed new locations, smaller spaces and with cheaper rental values.
But beyond the particular differences, most of the commercial hubs have as protagonists shops linked to gastronomy, clothing, supermarkets, fast food, bazaar, kiosk and beauty . “After the pandemic, gastronomy has consolidated itself as a dynamic and profitable sector. In addition, there is a great variety of formats and sizes of premises that adapt to this sector,” explains Amendola. And he adds: “ Another of the sectors that grew, after the health crisis, was that of bazaars and gift shops, and shops dedicated to personal beauty (beauty centers or manicure) that do not require large properties.”
The clothing and accessories sectors account for almost half of the occupied premises (representing 49.95%)
Marcelo Zuliani - commercial manager of Colliers Argentina - explains that the year began with two leading sectors: clothing and accessories account for almost half of the occupied premises (representing 49.95%), followed by the gastronomy sector (with 15.38%). Between them, they accounted for 65.33% of the inventory. "Today, although the indices have changed a little - we still do not have definitive data for the first half of the year - we could say that clothing grew a little more and gastronomy fell somewhat. On the other hand, another sector that grew - in all areas - was bazaar and gift shops. Another fact to take into account is that at the main intersections of avenues on the most important axes there are no longer vacant premises ," says the broker.
According to the brokers consulted, there is a submarket where fashion and the textile sector are the undisputed kings: on Avenida Alvear. There, most of the stock is divided between four categories, but fashion is the undisputed protagonist, occupying 77.8% of the availability , second place goes to health and beauty (with 8.9%), third place to home and bazaar (with 6.7%) and fourth place to financial services (with 4.4%).
Desalvo goes further, and maintains that the market continues to reinvent itself and gives rise to new and surprising commercial proposals. “In my experience, I am amazed by new areas that I even have to explain to the owners so that they understand the use that will be given to the premises. Such is the case, for example, of Detailing spaces: premises aimed at a very high segment that offer aesthetics for their vehicles ,” confesses the broker.
But the situation is not all roses. According to Santiago Winokur, a retail broker at Newmark Argentina, during the first half of the year, retail sales fell significantly. “Sales in our country during the first half of the year fell by 17.8%, mainly due to the drop in consumption, due to inflation and the loss of people's purchasing power. But it is worth noting that, despite all this, demand for retail premises remains strong. In other words, not only has it not dropped, but there are areas where the search for this type of property has increased, such as Palermo Soho. There, several premises that had been empty for some time have been occupied,” explains Winokur. He clarifies: “This is due to a commercial strategy that brands are carrying out, through which they prioritize remaining in the main commercial axes, for a matter of visibility and positioning.”
What is sought
What seems to remain unchanged is the type of premises that are most in demand. “ Location is, as always, the most important factor (corner is better) and natural light follows suit ,” says Potito. The most requested square footage range is between 100 and 300 m².The market offers various opportunities, most of them in the peripheral areas that are emerging in different parts of the city and that are being built as centers, although sometimes they are not sustainable over time or do not achieve the scale to become established. “Today this can be seen in Chacarita, Colegiales, Saavedra, Mataderos and Liniers, where there are new areas that are trying to emerge as alternatives to the already consolidated commercial centers and that present offers, mainly gastronomic, that are serving as a spearhead for developing the area,” explains the broker.
Villa Luro, Versalles, Devoto and a stretch of Emilio Castro are becoming areas of great interest for brands
For Amendola, Villa Luro, Versalles, Devoto and a stretch of Emilio Castro are becoming areas of great interest for brands . “This growth will attract more focus areas that will have new neighborhoods as protagonists. Another place that continues to grow is Avenida Pedro Goyena and something similar is happening with Calle Valle where gastronomic proposals are multiplying in Caballito,” said the broker.
The requested values
Prices for commercial premises vary depending on the area, location and characteristics of the property. Some areas have greater demand and value than others, which is reflected in the cost per square meter. For example, in Caballito, especially in the Acoyte and Rivadavia area, prices start at US$55/m² and can reach US$60/US$70 per square meter, in Santa Fe (between 700 and 5300) they range from US$18/m² to US$60/m² and in Cabildo (from 4800 to 5500) from US$18/m² to US$50/m² (according to data from the latest commercial premises report by Adrián Mercado).For sale, prices can be from US$3000/m² or even less in some areas. All brokers agree that so far this year there have been few enquiries specifically related to the purchase of premises. However, there is considerable interest in renting. “ We see a great interest in renting spaces and it could even be said that this trend is on the rise ,” says Potito. Zuliani adds: “In recent times we have begun to see an upward adjustment in rental prices, as a consequence of the devaluation of last December, January and February,” Zuliani adds.
From the supply perspective, there are projects under construction in different parts of the city that will provide alternatives to the market.
Analysts are all very optimistic about the future of the sector, but they agree on one thing: the market outlook will be strongly influenced by the ability of retailers to adapt to changing demands and the current economic situation. Flexibility and innovation will be key elements to maintain relevance and competitiveness in this constantly evolving environment.
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