The Buenos Aires retail real estate sector is showing renewed strength as vacancies fall to the single digits and retailers search from prime space along the city’s most traveled avenues and pedestrian streets.
A Stable Climate Along The Main Avenues is how La Nacion describes the retail real estate sector in BA, and the recent wave of new lease agreements and existing lease renewals especially among growing national and international franchises in Buenos Aires.
“The main thoroughfares with clusters of retail shops in Buenos Aires are still in demand. Even though retail is one of the sectors that suffers most from economic fluctuations, many contracts have been signed recently especially among franchises. According to the last report from Colliers International, the Buenos Aires retail real estate market is stable.”
The analysis says both lessors and lessees have adapted to market realities and are typically signing one-year contracts denominated in pesos. While the variation between retail asking price and closing price used to be 5 to 10%, today the margin for new retail tenants to negotiate is closer to 20%. The city’s affordability for retailers and franchisees mirrors the situation in the Class A commercial office space market.
The usual suspects lead the pack in terms of retail demand including Florida Street, the corner of Santa Fe & Callao, Cabildo & Juramento in Belgrano and other streets on the emerging pedestrian grid in downtown Buenos Aires which aims to reduce vehicular traffic, noise and smog along 100 city blocks in the Microcentro.
According to a first quarter 2014 report, the Buenos Aires retail corridors where retailers pay the highest monthly rents are Avenida Alvear in Recoleta (US$100 per m2), Calle Florida in Microcentro (US$80) and the intersection of Avenida Santa Fe & Callao.(US$70 per m2). The La Nacion article pegs Buenos Aires retail real estate vacancies at 7%. (Full Story in Spanish)
For more information about Argentina real estate investments, complete the form below.