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How much does a premium office rent for and how to reverse the coming crisis in that market? - La Nacion Propiedades
Source:
www.lanacion.com.ar
March 31, 2025
The lack of new projects is altering the market supply and demand, driving the modernization of existing buildings to meet the growing needs.
Premium offices will experience a renovation crisis in the coming years due to the decline in construction of AAA-class buildings.Shutterstock - Shutterstock
The Buenos Aires corporate real estate market is undergoing a transformation, and one of the most significant findings from Newmark's "Analysis and Perspectives 2025" report is the shortage of new AAA-class office developments through 2028. This situation is having a significant impact on the sector's supply and demand dynamics and poses challenges for both property owners and companies seeking high-quality space.
According to the report, there are currently only three projects under construction that will total 106,334 rentable square meters. Of these, two are scheduled for delivery by 2025: a building in the northern corridor of Buenos Aires (22,995 square meters) and a project in the northern zone (39,114 square meters). The third, a 44,225 square meter development in Catalinas , will not be ready until 2028. This implies that, in the coming years, the only way to meet the growing demand for premium space will be through the modernization and conversion of existing buildings.
This year, the addition of 60,000 m² in two buildings is planned, although more than 22,000 m² are still under negotiation, meaning that only 40,000 m² will directly impact vacancy in the short term.
Only three AAA office projects are under construction, and the largest of them, located in Catalinas, will not be ready until 2028.Renders provided by developers
Starting in 2026, the lack of new AAA developments until 2028 will lead to a gradual absorption of available stock, which will put downward pressure on vacancy. Given that the construction of a building of this category can take between three and five years, the lack of new projects underway will keep future supply restricted, reducing the availability of premium space in the city.
This lack of new AAA projects is due to multiple factors, including economic uncertainty, a lack of financing for large developments, and the low absorption of square footage in previous years due to the pandemic and the rise of remote work. However, with the progressive stabilization of the market and the rebound in in-person corporate employment, the need for modern and efficient offices is resurfacing.
This phenomenon translates into market fragmentation: while AAA buildings with sustainability certifications, advanced technological infrastructure, and additional services continue to attract demand, those that have not been renovated face higher vacancy rates and must reduce their rental prices to attract occupants . In this context, investment in property renovation becomes a key strategic factor.
Demand for flexible and coworking offices is on the rise, driven by new hybrid work modalities.Gentleness
Adaptation not only involves aesthetic and technological improvements, but also more flexible rental formats. Many companies are opting for shorter-term contracts, flexible occupancy schemes, and coworking options , forcing owners to rethink their business models.
Emerging hubs like Palermo and Parque Patricios could benefit from this situation , attracting companies looking for alternatives to premium corridors, where availability is more limited. Furthermore, the report suggests that flexible occupancy formats, such as coworking spaces and hybrid offices, will be key to the market's reconfiguration.
Older and outdated office buildings face higher vacancy rates and must adapt to new market demands.Ricardo Pristupluk - La Nacion
Furthermore, the possibility of financing for renovations and improvements will play a key role in this scenario. Access to real estate credit is expected to gradually improve, which could accelerate the renovation process for buildings that urgently require updates.
In short, the Buenos Aires office market is at a crossroads: with no new projects on the horizon, the key to growth will lie in adaptability. Those who manage to anticipate the sector's new demands and offer functional, technological, and sustainable spaces will be the ones that will make the difference in the coming years.
www.buysellba.com
Source:
A cuánto se alquila una oficina premium y cómo revertir la crisis que se viene en ese mercado
La falta de nuevos proyectos está alterando la oferta y demanda del mercado, impulsando la modernización de edificios existentes para cubrir la crecientes necesidades
www.lanacion.com.ar
March 31, 2025
The lack of new projects is altering the market supply and demand, driving the modernization of existing buildings to meet the growing needs.
Premium offices will experience a renovation crisis in the coming years due to the decline in construction of AAA-class buildings.Shutterstock - Shutterstock
The Buenos Aires corporate real estate market is undergoing a transformation, and one of the most significant findings from Newmark's "Analysis and Perspectives 2025" report is the shortage of new AAA-class office developments through 2028. This situation is having a significant impact on the sector's supply and demand dynamics and poses challenges for both property owners and companies seeking high-quality space.
According to the report, there are currently only three projects under construction that will total 106,334 rentable square meters. Of these, two are scheduled for delivery by 2025: a building in the northern corridor of Buenos Aires (22,995 square meters) and a project in the northern zone (39,114 square meters). The third, a 44,225 square meter development in Catalinas , will not be ready until 2028. This implies that, in the coming years, the only way to meet the growing demand for premium space will be through the modernization and conversion of existing buildings.
This year, the addition of 60,000 m² in two buildings is planned, although more than 22,000 m² are still under negotiation, meaning that only 40,000 m² will directly impact vacancy in the short term.
Only three AAA office projects are under construction, and the largest of them, located in Catalinas, will not be ready until 2028.Renders provided by developers
Starting in 2026, the lack of new AAA developments until 2028 will lead to a gradual absorption of available stock, which will put downward pressure on vacancy. Given that the construction of a building of this category can take between three and five years, the lack of new projects underway will keep future supply restricted, reducing the availability of premium space in the city.
This lack of new AAA projects is due to multiple factors, including economic uncertainty, a lack of financing for large developments, and the low absorption of square footage in previous years due to the pandemic and the rise of remote work. However, with the progressive stabilization of the market and the rebound in in-person corporate employment, the need for modern and efficient offices is resurfacing.
An increasingly selective demand
Class A office vacancy closed 2024 at 18.8%, a high figure but one that is trending toward stabilization. However, older and outdated buildings are struggling to attract tenants , as demand is focused on modern, energy-efficient spaces with advanced technology and flexible designs that adapt to new hybrid work modalities.This phenomenon translates into market fragmentation: while AAA buildings with sustainability certifications, advanced technological infrastructure, and additional services continue to attract demand, those that have not been renovated face higher vacancy rates and must reduce their rental prices to attract occupants . In this context, investment in property renovation becomes a key strategic factor.
Impact on prices and adaptation strategies
Regarding rental values, prices are expected to remain stable in the range of US$23/m² to US$25/m², with occasional adjustments depending on the location and quality of the property. As supply dwindles, owners of aging buildings will need to adopt aggressive marketing strategies or invest in improvements to attract tenants.
Demand for flexible and coworking offices is on the rise, driven by new hybrid work modalities.Gentleness
Adaptation not only involves aesthetic and technological improvements, but also more flexible rental formats. Many companies are opting for shorter-term contracts, flexible occupancy schemes, and coworking options , forcing owners to rethink their business models.
Emerging hubs like Palermo and Parque Patricios could benefit from this situation , attracting companies looking for alternatives to premium corridors, where availability is more limited. Furthermore, the report suggests that flexible occupancy formats, such as coworking spaces and hybrid offices, will be key to the market's reconfiguration.
A horizon of consolidation and challenges
2025 will be an important year for the consolidation of these trends. With future supply restricted, the modernization of existing buildings becomes an unavoidable necessity for Buenos Aires to remain a competitive market in the corporate office sector. Developers and owners who commit to the modernization and operational efficiency of their spaces will be better positioned to face an increasingly demanding and selective landscape.
Older and outdated office buildings face higher vacancy rates and must adapt to new market demands.Ricardo Pristupluk - La Nacion
Furthermore, the possibility of financing for renovations and improvements will play a key role in this scenario. Access to real estate credit is expected to gradually improve, which could accelerate the renovation process for buildings that urgently require updates.
In short, the Buenos Aires office market is at a crossroads: with no new projects on the horizon, the key to growth will lie in adaptability. Those who manage to anticipate the sector's new demands and offer functional, technological, and sustainable spaces will be the ones that will make the difference in the coming years.
www.buysellba.com
