Rental prices for offices in Brazil

Juliana Mello

The Brazil Business

Updated

11 September 2012

In this article, you will be informed about the average rental prices of prime offices in Brazil. We covered the largest and more productive state capitals of the country, located in three Brazilian regions

Rio de Janeiro – RJ

Depending on the neighborhood, rentals in the “Marvelous City” are even more expensive than in New York. Although the prices have decreased comparing to 2011, per square meter of commercial offices in Rio de Janeiro are still more expensive than São Paulo and Brasília. The highest prices are in Zona Sul, Orla, Downtown, Barra da Tijuca and Cidade Nova neighborhoods.

Two reasons contributed for Rio de Janeiro to remain as the top expensive rent location. First, there is the city’s geography, with restricted available spaces for new constructions. In second place there is the recovery of Rio de Janeiro’s economy, growing the national and foreign companies' interest in establishing operations in this town.

Given the lack of location to accommodate new ventures, Rio de Janeiro has been adopting a strategy already used by other great cities, such as New York, Paris and London: the reform of old buildings, practice known as retrofit.

General rental price (per month): BRL 130.91 /sq. meter per month - BRL 12.16/sq foot

Annual rental growth:  -7.7%

São Paulo – SP

São Paulo suffers from the greatest issue of the large metropolitan business centers: lack of space. The city receives more and more people and is not being unoccupied to balance its numbers. The city scored the lowest vacancy rate of the world in 2011, only 0,8%. In comparison, London was rated in 5%, Honk Kong, 3.1% and Geneva, 2.5%.

If we analyze the kinds of business established in São Paulo it gets obvious why the city is in desperate need for more and more office spaces. São Paulo ranked as the Brazilian city that most received foreign investments in 2011. About 43% of the international investments were directed to the creation of headquarters and centers for research, marketing, design and consumer attending services. Other 25% of the foreign investments were directed to the service sector, with an emphasis on the consulting and outsourcing businesses.

Good news is that São Paulo is to offer 300 to 400 thousand square meters of new office areas per year from 2012 onwards, what must decrease the prices and increase the vacancy rates.   

General rental price (per month): BRL 123.7/sq meter per month - BRL 11.49/sq foot

Annual rental growth:  33.9%

Brasília – Distrito Federal

  The region known as Plano Piloto has the highest rental prices. The capital of Brazil has very few corporate buildings, and it is actually suffering from a lack of space for new constructions.    

Yet, the demand for offices in Brasília continues to climb. As it gets more and more difficult to find an office in the North or South Wings of the Plano Piloto, the trend is to look for offices located in the outskirts of the city.  

General rental price (per month): BRL 107/sq meter - BRL 9.94/sq foot

Annual rental growth: 21%    

Recife – Pernambuco

  Recife is undergoing important transformations, as more companies and investors are showing interest in the city. Home to the country's most important technology hubs - Porto Digital – as well as the Port and Industrial Complex in Suape, the most important city in the Northeast region have a strategic position for regional manufacturing and distribution as well as exports to other countries.

Compared to other main cities in Brazil, the market for offices in Recife is still small, with growing demand and short supply of quality properties. The high end developments expected for delivery over the coming five years will considerably increase the stock of Class A offices in Recife, what shall increase the value and attractiveness of that city's real estate market.

The highest valued neighborhoods are Boa Viagem, Aflitos and Espinheiro.

General rental price (per month): BRL 62.9/sq meter - BRL 5.84/sq foot  

Belo Horizonte – Minas Gerais

The number of available prime offices in Belo Horizonte are not meeting the demand, and the high prices of the prime lands are making impossible the construction of new corporate buildings. The most expensive rents are in the neighborhoods of Savassi, Anchieta and Sion.

General rental price (per month): BRL 75 /sq meter - BRL 6.97/sq foot

Annual rental growth: 13,47%

Other cities’ numbers

• Vitória – Espírito Santo:

General rental price (per month): BRL 53.8/sq meter - BRL 5,0/sq foot

Annual rental growth – 19,1%

• Curitiba – Paraná:

General rental price (per month): BRL 55/sq. meter - BRL 5.11/sq foot

Annual rental growth – 39,9%

• Salvador – Bahia:

General rental price (per month): BRL 56.8/sq. meter - BRL 5.27/sq foot

Annual rental growth – value not found    

The numbers for this article were obtained from the 2012 Cushman & Wakefield “Office Spaces Across the World” survey.