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The traditional street in the center of Buenos Aires that was reborn and is the one chosen by tourists
November 29, 2023
The brands are installed with gastronomic proposals that attract Latin American tourism
Florida Street today is more active than ever with the opening of new stores, tourists and second brand items.
Florida Street , the iconic commercial artery of the city of Buenos Aires, is experiencing a renaissance driven by the growing flow of tourists and the reactivation of economic activity in the downtown area . Although the pandemic left its mark on this city corridor, with many gastronomic establishments closing their doors, today it is more active than ever with the opening of new proposals.
The resurgence of this corridor is reflected in the increase in inquiries from gastronomic entrepreneurs and the occupation of spaces that were previously empty, although with a change in the profile of tenants, who now lean towards second brands. Although renowned businesses (such as the Cuesta Blanca clothing brand) still have a presence, there is a shift towards lesser-known brands that took advantage of historically low prices during the pandemic to establish themselves in the city's classic shopping area.
Surprisingly, the area's revitalization isn't coming primarily from big brands.
Currently, rental demand is highly concentrated in small-sized premises, covering up to 250 square meters. This phenomenon explains why the revitalization of the area does not come mainly from the big brands. Larger properties are currently facing leasing challenges as demand shifts towards more compact spaces.
According to the latest survey carried out by JL Ramos specific to this area, there are 260 premises, with a vacancy rate of around 2.6%, equivalent to approximately seven or eight premises currently available. “Florida experienced rapid growth and rapid recovery between 2022 and 2023, resulting in a low availability of commercial premises,” explains Jorge Gayoso, director of LJ Ramos. ”There is a large presence of foreign tourists because for them Argentina is cheap and that contributed uniquely to this phenomenon. Currently, the brands established in the pedestrian area are directing their strategies towards international clientele,” says the expert in the area.
Florida Street experienced notable depreciation, with rental costs decreasing from US$60/m² and US$80/m² to US$15/m² and US$20/m².
Profile of tourists and local categories
Although there is a tourism boom in the city of Buenos Aires, it is not the same everywhere. Unlike neighborhoods like San Telmo, where the diversity of travelers is notable, in the downtown area the Latin American profile predominates. “For them, the center is attractive, with emblematic places such as Plaza San Martín and 9 de Julio Avenue. Everything designed for tourism is concentrated on Florida Street, where today establishments such as I Love Gifts or La casa del dulce de Leche stand out . Even the space that previously housed a smaller Falabella branch has evolved into a store specialized in gifts,” says the broker.Before, renting a store on Florida Street cost between US$60/m² and US$80/m², but today it is possible to obtain it for between US$15/m² and US$20/m², giving small brands the opportunity to secure rental contracts at long term, mainly in the clothing sector. Consequently, owners renting to big-name brands that originally occupied this corridor were forced to conform to the values of the second brands. “The first lines now prefer to set up shop in shopping centers. Although there are still brands such as Cuesta Blanca, Vitamina and Portsaid, these stores have currently moved within Galerías Pacífico, in Córdoba and Florida, sharing space with renowned brands such as Hugo Boss or Rochas,” explains Gayoso.
This corridor is faced with the challenge of satisfying the growing demand in the gastronomic sector.
Within the gastronomic sphere, traditional options such as Havanna and McDonald's remain, although a challenge arises in the ability of these establishments to cope with the overwhelming demand. “This year marked the return of the flow of people to the downtown, with the exception of Fridays due to the home office modality,” warns the broker. However, this revitalization generated a challenge: the insufficient gastronomic offer to satisfy the growing demand during peak hours, between 11 a.m. and 3 p.m.
Contrary to the pre-pandemic situation, where the availability of premises was greater, today closures persist on the side arteries such as Viamonte and Tucumán streets, with the need for significant investments to attract businessmen reluctant to operate only from Monday to Thursday. However, those businesses that resisted the onslaught of the pandemic are now experiencing a boom. “With the reappearance of the usual public, the gastronomic offer has not yet been completely restored. In a block where there were previously seven gastronomic establishments, today there are only two,” says Gayoso.
The few locations available are those of larger size, as well as those of smaller dimensions in the lateral arteries.
However, this is a problem that only affects the establishments on the street, since those tourists who arrive with considerable purchasing power immerse themselves in Galerías Pacífico , where the gastronomic offer reaches its climax, operating even seven days a week. week.
The evolution of Florida Street has reached its peak. Although there are premises available, the reluctance of those interested remains palpable. Average rental prices in Florida range between US$18, US$21 and US$25 per square meter, according to the official exchange rate of Banco Nación. Currently, only the largest premises are available, as well as those of smaller dimensions on the lateral arteries. “Those who identified the opportunity at the time took advantage of the situation, but there may still be cases of relocation or the inability of brands to face increases in rental costs,” says the expert.
Despite continuous growth in recent years, merchants fear a possible cooling of the economy, since they cannot make a living from tourism alone.
An interesting fact is that some premises that had a value at the beginning of the contract could have experienced depreciation, even with the corresponding updates. “There is the possibility that owners and tenants will negotiate and adjust the rental price, or that those who cannot cope with the situation will choose to abandon the premises,” notes Gayoso, although he warns that much will depend on the economic measures taken by the next Government.
The evolution of the dollar is also presented as a crucial factor in this scenario. “Businesses, in this context, are immersed in deep concern and uncertainty. Faced with a possible cooling of the economy, they cannot live off tourism alone, they need the Argentine consumer,” says the broker.
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