Since office construction is still active and could enter a phase of over-supply, combined with the strong increase in telecommuting, the market could face a contraction in the coming months.
Because of the spread of covid-19, governments in Central America have decreed strict home quarantines.
In Costa Rica, it is estimated that the level of occupation of corporate spaces is 90%, being the modality "coworking", the type of office most sought by companies that are established in the country.
According to reports from Newmark Knight Frank (NKF), San Jose West, Heredia and the Savannah sector, are the most attractive areas in the country for future projects of this type.
Banco Popular of Costa Rica has announced that it will invest $43 million in the construction of a new building, $34 million in the remodeling of the current one and $12 million in rent and adaptation of offices.
Representatives from the banking entity stated that they will be building new headquarters called "Edificio Metropolitano II".The building will be located in the Costa Rican capital, and will have 15 storeys and two basements, and will have the capacity to house 1,400 workers.
In Costa Rica, a real estate developer has announced that it plans to start construction of an office building in Curridabat, San José, this year.
Representatives of construction company Desarrolladores 506, promoter of the project, reported that the building on seven levels will have 289 parking spaces.Its location will be in the northeast part of the Momentum Pinares shopping center and the new office tower will have direct access to the shopping center.
At the end of the first quarter, office space inventory totaled 1.4 million square meters, with an average price of $19 / m2, up 7% compared to the same period in 2016.
Data from the report "Office Real Estate Market up to June 2017" by Colliers Costa Rica shows that at the end of March this year the inventory amounted to 1.4 million square meters, an increase of 2.4% compared to the same period in 2016.
In 2016 net absorption of 82,000 m2 was reported, compared to the 44,000 m2 of new spaces, the highest since 2012, and a inventory rotation which was less compared to other years.
From a report by Newmark Grubb:
2016 closed as one of the most special years in recent history of the office market in Costa Rica: according to information supplied by Newmark Grubb, it was the first time that inventory demand exceeded new spaces that were introduced.
It has been reported that the vacancy rate in the office segment in the real estate market now exceeds 10%.
Nacion.com reports that "... an analysis by Colliers International shows that the office market is undergoing a period of greater caution, since the vacancy rate is above the 10% threshold for defining market saturation."
In the last year the country has built about 120 thousand square meters of new class A and AB office spaces, and recorded an availability rate of 11.9%.
In recent years, Costa Rica has become one of the major markets for offices in Latin America, ranking eighth in creation of supply in this sector, according to a study by the US real estate firm Jones Lang LaSalle (JLL).
Rent an office in a standard office building costs around $17.38 per square foot, whereas in a mixed-use development the price rises to $23.
This was revealed by a study by the real estate company Colliers International, who also explained that "when it comes to mixed use commercial premises, the average price recorded by the company reaches up to $28, whereas in other commercial centers the figure drops to $18.17 ", reported Elfinancierocr.com.
The latest survey by the real estate company Colliers International, serves as a guide to compare rental prices of commercial premises in the Greater Metropolitan Area of Costa Rica.
Within the large existing supply, average prices per square meter for monthly rental in shopping centers are around $26.25 west of the capital and $22.75 in the east. These two areas are the most in demand, followed by south of San Jose, Cartago, Alajuela and finally Heredia.
An NAI Costa Rica Report for the third quarter 2011, gives analysis categorised by supply, demand and prices, and an evaluation of new projects.
Extract from the report:
The office property market is stable with an availability rate of 8.9%, up 1.1% from last quarter, due to the steady inflow of new office centers to the market.
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