Faria Lima, known as São Paulo’s financial epicenter, is seeing unprecedented hikes in commercial rent, significantly outperforming other city regions.
A report by Cushman & Wakefield indicates a 20% surge in office rental costs in 2023, with expectations for continued high rates.
Last quarter, Faria Lima averaged R$220 ($44) and Itaim R$280 ($56) per square meter, starkly contrasting city-wide R$109.76 ($21.95).
Daniel Battistella highlights a notable scarcity of new construction and available leases in Faria Lima, leading to consistently low vacancy rates, recorded at 9.8%.
This scarcity is set against a backdrop of a city-wide vacancy rate of 23.47% for Class A buildings, with some areas like Av. Chucri Zaidan experiencing even higher rates of 32%.
The transition back to office-based work after the pandemic has rapidly refilled previously vacant spaces.
Ita’s acquisition of a 23,000-square-meter building on Brigadeiro Faria Lima Avenue for R$1.5 billion ($300 million) exemplifies this trend.
In 2024, experts anticipate Faria Lima’s rental prices to keep increasing, emphasizing its appeal to investors.
2023’s real estate market recovery, with fewer space returns and increased new developments, hints at a dynamic, investment-friendly environment.
Challenges persist in areas like Chucri Zaidan and Chácara Santo Antônio, where oversupply has led to higher vacancy rates.
Conversely, the Rebouças area, nestled between Paulista and Faria Lima, is emerging as an appealing alternative, offering new development projects.
Occupants’ preference to stay highlights Faria Lima’s prime location, solidifying its status in São Paulo’s commercial real estate.