Average vacancy rates are rising in the Buenos Aires Class A office market but they are still healthy compared to other South American metros, according to the latest quarterly report from Colliers International.

With A Decline In Rents, The Crisis Reached the Office Market is the headline of Alfredo Sainz’ analysis in La Nacion which shows average Class A rents finished the third quarter 6.5% lower than the second quarter and 11.3% lower than one year ago. The current average lease rate of US$25 per square meter (US$2.32/sf) is 32% lower than the 2008 peak of US$36.7 per square meter (US$3.41/sf).

As anticipated, the pullback in BA office rents was accompanied by an increase in average vacancy rates which have risen from the pre-crisis level of 1.4% in 2007 to 9.2% in 2014, although Colliers is quick to clarify that 9.2% is still a healthy number.

The vacancy increase is not a worrisome statistic, because a percentage around 9% is not a high number in regional terms, and you could describe it as a healthy market. On the other hand, you have to look a little more carefully at the average rent decrease,” said Juan Manuel Farola, the Office Division Manager for Colliers International.

Farola also points to Buenos Aires’ positive absorption rate of 10,000 square meters (107,000 sf) in the third quarter as another positive sign, although the market absorbed 22,000 square meters (236,000 sf) in the previous quarter.

“This decrease in absorption can be attributed to the recent behavior of some companies that have decided to delay their investment processes in hopes of gaining greater visibility regarding economic conditions. However, looking at the cumulative absorption rate, there is a very good chance of reaching the average annual absorption rate for our market.” (Full Story in Spanish)

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