Pacaembu Avenue needs to reinvent itselfLeitura de 2min
Office offerings at reasonable prices have attracted ex-tenants of this important avenue in the city’s west side.
Made up of old houses and mansions of 200 to 1,000 m2 that have typically housed architectural firms, law firms, consultancies, real estate agencies, and small and medium-sized stores, Pacaembu Avenue is considered under the city’s zoning as a low-density mixed zone.
Since part of its properties are protected as Historic Heritage of São Paulo and the zoning is restrictive, there were few changes in the characteristics of the buildings or in their occupancy patterns in recent decades, according to Simone Shoji, from the Market Research and Intelligence department at JLL.
However, one new fact has been promoting an emptying of Pacaembu Avenue and causing a change in the occupant profile.
The broad offerings of offices and the drop in rental price per square meter in practically all the main areas of the city has led the occupants of Pacaembu Avenue to migrate to commercial buildings in search of better facilities, more security, and lower cost,” says JLL director of Transactions, Roberto Patiño.
According to him, for some time, Pacaembu has been losing relevance and becoming a corridor for vehicles to pass through, as has already occurred with Santo Amaro and Rebouças Avenues. “The excess of cars makes it difficult for drivers to stop on a whim. So the businesses suited to it are those the serve the local public, who leave the house with a certain destination in mind. The number of veterinarians and small pet shops has grown,” says Roberto Patiño.
In addition, tenants no longer see a favorable cost-benefit ratio in the region. The price has been falling, but not enough for Pacaembu’s old mansions to compete with the benefits of offices in new buildings.
The avenue’s future is uncertain, Patiño and Simone claim. Due to its protected properties, it is not possible to modify the design of the lots. “It is not permissible to join lots together with the though of new construction types, such as a supermarket. Also as a result of the protection, building height is limited to 10 meters, which prevents the construction of buildings, Simone explains.
Since it is a traffic corridor with a high flow of vehicles, it is not an attractive area for residential use, and it has not typically had a flow of pedestrians either. There is also the action of a strong residents’ association that blocks any attempt to use the area to set up bars, venue, and restaurants (this action was incorporated into the new Zoning Law).
Apparently, there would need to be a bigger drop in rent prices to attract new types of occupants, such as pet shops, beauty parlors/clinics, and other types of services related to the residential surroundings. The time has come to accommodate prices to find a new occupant profile,” says Simone. “Pacaembu needs to reinvent itself,” Patiño concludes.