Brazil’s Commercial Real Estate Rental and Sales Prices Fall

By Jack Arnhold, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to the latest FipeZap Commercial Index, commercial real estate prices in the four Brazilian cities of Rio de Janeiro, São Paulo, Belo Horizonte and Porto Alegre recorded a marginal drop in both the average selling price of -0.06 percent and also in the average rental price of -0.44 percent in March 2018.

Rio de Janeiro remained at the top of the sales ranking, with an average per square meter price of R$10,674 while São Paulo remained at the highest average per square meter rental price of R$43.47 in addition to offering the highest rate of commercial rentability among the cities monitored, with an annualized return of 5.5 percent. Rio came in second place at R$40.64 per square meter

For March, the top five neighborhoods in Brazil for commercial sale prices were all located within Rio de Janeiro. Leblon led the way with an average sale price of R$34,812 per square meter.

This was followed by Ipanema at R$25,195 per square meter, then Jardim Botânico at R$24,254 and finally Flamengo and Catete at R$16,268 and R$16,227 per square meter, respectively.

Things, however, have changed slightly in the rental market since the last report, with Rio de Janeiro no longer dominating the most expensive neighborhoods for commercial property to rent.

While Leblon still stands way above all others with an average rental price of R$123.21 per square meter, and Ipanema follows with R$82.16 per square meter, the next most expensive neighborhood for commerical rental property is Cidade Jardim in São Paulo, with an average rental price of R$71.62 per square meter.

Jardim Botânico in Rio de Janeiro follows at R$70.86 per square meter, and another São Paulo neighborhood, Itaim Bibi, rounds of the list at R$65.19 per square meter.

Over the past twelve months, the FipeZap Commercial Index registered a nominal fall of -2.29 percent and -3.78 percent, respectively, in the sale and rental prices of commercial real estate across Brazil.

The accumulated inflation in the period is 2.68 percent as calculated by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics).

The FipeZap Index is prepared by the Economic Research Institute Foundation (Fipe) using data from the Brazilian Institute of Geography and Statistics (IBGE), in partnership with the Brazilian real estate website, Zap Properties.