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Rentals: The local summer is over - El Cronista
Source:
March 19, 2024
In three months, rental prices for commercial premises doubled. What was the impact on a sector that, until December, had reduced its vacancy?
Rentals: the local summer is over
By Belen Fernandez
Summer is over for rentals of commercial premises . So far this year, the number of empty businesses has increased and today you can see lowered blinds in the main commercial arteries of the Capital, something that, until the end of 2023, did not happen. The cause: in December, prices doubled, which, together with the drop in consumption, caused the number of contracts that were not renewed to rise.
Already weeks ago, the Argentine Chamber of Commerce and Services (CAC) had warned that the number of empty premises in the City of Buenos Aires during the January-February two-month period registered an increase of 24.2% in relation to what happened in November -December 2023.
In the first two months of 2024, 195 premises for sale, rent or closed were detected on the main shopping streets . In the previous two months, that number had been 157 available businesses.
" Rental prices rose above inflation in the last three months. This caused many contracts to fall. To the drop in consumption, there was now a sharp increase in fixed expenses, " explained Martín Akian, commercial director. in Aranalfe Properties, which operates, above all, on Santa Fe Avenue.
Retail sales recorded a sharp decline in February. According to a survey prepared by the Argentine Confederation of Medium Enterprises ( CAME) , they fell 25.5% annually , at constant prices, and accumulate a decline of 27% in the first two months of the year , compared to the same period last year.
Commercial contracts can be freely agreed between the parties. Therefore, in general, updates are made bimonthly. "In December and January, prices rose considerably, up to 50%. Many companies could not sustain these expenses and decided to close their businesses," added the broker.
In the most sought-after areas of Belgrano - such as Cabildo Avenue -, for example, brands such as Buddies (teenage clothing) left and one of its Starbucks stores also closed . "Opportunities for premises are beginning to emerge in arteries where it was previously impossible to find availability," observed Andrés Di Nallo, broker and appraiser at Adrián Mercado.
However, "each segment must be analyzed in particular," said Daniel Prieto, president of the Association of Hotels, Restaurants, Confectioneries and Cafes (AHRCC) . "Today, we see that, in the case of breweries, there is a lot of supply, but the demand is not so high. In these cases, we see closure of premises in very important commercial arteries," he explained.
What happens on the main avenues
Today, on Cabildo Avenue, there are 16 empty stores. This is an increase of 167%, compared to the previous two months when that number was only six unoccupied premises . In the case of Santa Fe, while, in the November-December period, 27 empty premises were registered, today it reached 43.
The data collected by the CAC
"Throughout last year, we had high demand for places for gastronomy. There was a very tempting combo: people had money in their pockets, which they wanted to consume so as not to devalue themselves, and commercial rents were very cheap, with good opportunities. But The positive trend did not continue this year ," explained Martín Potito, director of the office division of LJ Ramos.
" The panorama changed in the first two months. First, rents are no longer cheap. And, as a second factor, the consumer begins to cut expenses because he no longer has excess pesos and that is seen in fewer outings to eat ," he added. Potito.
Rental prices
Many of the local prices remain in dollars and still do not seem to adjust downwards.For example, a location in Palermo Hollywood, of more than 200 square meters (m2), where a restaurant operated, has a rental value of US$3,500 per month. In the same neighborhood, in El Salvador and Fitz Roy, a 160 m2 premises with a terrace and restaurant facilities has a monthly value of US$2,500 per month.
"The premises that remain empty, in general, are rented quickly. There is a lot of movement. There are tenants looking for cheaper options," Akian explained.
"In the last four months, rental prices, on average, have gone up 40%," Di Nallo said. The truth is that in areas where demand is very high, these increases were up to 100 percent.
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