Market Trends of Brazil Commercial Real Estate Industry
Strong Demand in the Industrial Sector
- Brazil's standing in the world In the final quarter of the year (Q4 2022), the logistics market had favorable results thanks to the addition of 622,501 sq.m. of new inventory. Deliveries were made mainly in Minas Gerais and Sao Paulo (346,284 square meters) in the Southeast area. Total deliveries were 3.36 percent greater than the previous quarter.
- The country's net absorption of 351,050 square meters was again focused in the Southeast, with Minas Gerais accounting for 58.33% of the total, with a focus on the markets of Extrema and Betim, which had respective absorptions of 105,790 square meters and 100,368 square meters.5%.
- Following many reductions, the country's vacancy rate increased by 1.08 percentage points from the previous quarter to 10.85% in Q4 2022. The Southeast area had the greatest closing percentage (12.01%), followed by the South (10.01% vacancy). The highest value in the historical series, BRL 23.15 sq.m/month, represented the average asking price. The asking price increased across all regions, but the Southeast region saw the biggest swing, ending at BRL 23.43 sq.m/month.
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Brazil's Office Market is Showing Signs of Revival
- The Brazilian economy's recovery was stronger than anticipated, and the indications were higher than those of the first quarter of 2022. Despite a decline in the number of transactions and the ongoing vacancy of some spaces, the Class A office market in this market has continued to perform well throughout the first semester. Compared to 35.45% in the first quarter of 2022, the availability rate is still high but consistent at 35.37%. Even if it was modest, in most areas of this significant metropolis, the activity of new occupations outpaced that of unemployment.
- The majority of the productive sectors performed well, and in May 2022, activity levels rose in the industrial sector by 1.2%, the commerce sector by 0.6%, and the services sector by 0.3%. In contrast to the declines at the beginning of the year, new incentives aimed at household consumption and improvements in the agriculture and mining sectors supported the expectation of GDP growth in the second quarter of 2022. As a result, there were fewer transactions and lower gross and net absorption levels in the second quarter of 2022.
Even with some vacancies filling, the occupied area rose by 16,000 m2. In comparison to last year, when a total of 46 thousand m2 was reported, net absorption has increased. The service industry, particularly the subsectors of finance and insurance, technology, and health, shone out in terms of new leases over the last quarter. The availability rate decreased from 23.84% to 23.77%, remaining constant.
