Trend is of price recovery in the corporate office market in São Paulo

Leitura de 5min

O Relógio Imobiliário – ou JLL Clock – indica que ainda há boas oportunidades para locatários ou para aquisição de imóveis. Mas os preços mostram tendência de alta na capital paulista.

The study Capital Markets: trends of the real estate market, which has just been released by JLL, indicates that the corporate office market is starting to change in São Paulo. The hands of the JLL Clock are showing 6 o’clock.

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But what does that mean?

Eduardo Miyamoto, from the Market Intelligence and Research area at JLL, explains that the real estate market is cyclic and changes depending on supply and demand. In the last three years, there has been surplus supply due to many deliveries of buildings and also the macro-economic downturn. The high vacancy rate favored those interested in doing a lease, because they could get discounts and other concessions from the owners.

“This scenario is coming to an end. Those who have plans for expansion or who want to move to a better, well-located office must hurry, because we are observing a reduction in supply in upscale areas, and the owners are starting to show less flexibility in negotiations,” says Miyamoto.

The same is true for those interested in purchasing commercial properties at attractive prices. The expectation of a drop in the dollar and the basic interest rate, the reduction in supply, and the lack of new projects, especially in primary regions, at so-called upscale addresses, such as on Paulista and Faria Lima, should contribute to the price recovery. “We see a window of opportunity closing,” says Ricardo Hirata, also from the Market Intelligence and Research area, JLL.

Why this reversal in the scenario?

Among other things, two factors justify a new trend in the office market in São Paulo, according to the study Capital Markets: trends in the real estate market. “The first factor is the price recovery. We have already perceived a reduction in the difference between the value requested and the value transacted on. We see a slow but constant growth in the transacted price. Second, because we identify less flexibility from the owners, based on the expectation of a macro-economic recover and the return of the confidence of the industry and the consumer,” explains Miyamoto.

Why is now the time for tenants or buyers?

Knowing how to take advantage of the real estate cycles is essential for making a good deal and ensuring the future liquidity of the asset. Real estate cycles last for years. In Brazil, JLL’s monitoring indicates that they last an average of 10 years. At the moment, the time is still favorable for tenants and buyers.

Find out more about real estate cycles and the JLL Clock.