The oversupply of office space and changes in the dynamics and ways of working of companies have led the office rental market to a corrective or adjustment phase, which is mainly evidenced by the downward pressure on rental prices.
At the beginning of 2021, CentralAmericaData expected that in the coming years, 4 out of 5 companies will bet on hybrid work modalities, which include face-to-face and remote activities. This phenomenon will force office supply to adjust to the new market conditions.
Since it is expected that when the pandemic is overcome, 4 out of 5 companies will opt for hybrid working modalities, which contemplate face-to-face and distance activities, the offer of offices will have to be adjusted to the new market conditions.
Before the pandemic, it was estimated that only 30% of companies were betting on modalities that included face-to-face and telecommuting activities.
The availability rate for the real estate segment of rental offices is 10%, and the average price per square meter is around $19.
The dynamism of the activities linked to the services sector is the main driver of the growth in the office market segment in the Greater Metropolitan Area. The recovery that this segment has shown in recent years goes hand in hand with the greater investment in the services sector, especially foreign investment.
On August 14, the Instituto Costarricense de Electricidad will be auctioning 17 properties located in different areas of the country.
Two of the properties to be auctioned are located in San José, one in Heredia, three in Alajuela, one in Cartago, two in Los Santos, one in Liberia, and seven in Tilarán.
"...The total base price of the auction exceeds $2 million.These are plots of land belonging to the ICE and Compañía Nacional de Fuerza y Luz (CNFL) that will generate good income and also savings in operating and maintenance costs," explained Francisco Garro, corporate manager of Administration and Finance at the ICE."
Increases in the average price of office space have been recorded due to less construction of these types of buildings in the first half of the year.
Figures from a report by CBRE Panama cited by Capital.com.pa indicate that construction has declined in this segment due to increases in the price of materials and high utility rates, leading to the average price of "...
Although construction of office space keeps rising, the real estate union has projected that rental prices will remain steady this year without any significant changes.
The union of real estate in Panama City believes it is not yet time to speak of a "glut" in the office market, although the inventory continues to grow, without having a direct impact on rental prices.
Predictions are that the office vacancy rate in Panama City, currently 33%, could reach 45% in 2016.
Following that under usage prevailing in the office market rental rates have dropped by up to 30%. In the case of hotels, they are also experiencing this phenomenon, the vacancy rate has fallen by 50% and in turn nightly rates have decreased by 28%.
Specialty and department stores are the entities demanding the most space in commercial centers and malls in the capital.
The vacancy rate for Class A commercial property fell by 7.4% in the first half of 2013 to 4.8% in the second half of 2013, due to the fact that the rise in meters available in major shopping centers has been absorbed at a good pace, with many of those spaces being leased before the works are finished, reported a study by the real estate firm CBRE Panama.
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 market reported an increase in its vacancy rate of 10-12%, while the inventory in square meters is also grew, by 12% during the first quarter of 2013.
The data was revealed during the Expo Offices event which took place on the 5th and 6th of August.
According to Rodolfo Cruz, manager at Inmobiliaria Contempo, "the inventory went from 985 thousand square meters in the first quarter of 2012, to 1,110,000 square meters in the first quarter of 2013, and the vacancy rate rose from 10% to between 11 and 13%, according to various measurements. Experts say that more than 10% means that there is an oversupply, a reasonable supposition given the large number of projects that are coming in," said Cruz.
During the first six months of 2013, the Class A office market remained highly dynamic, mainly in the Banking area and Costa del Este.
A market study prepared by CBRE Offices Panama, recorded a total of 400,104 square meters under construction in the office market, of which 379,000 are Class A and luxury offices, while 20,685 are Class B and C offices
An increase in the supply of offices in Panama City is putting downward pressure on occupancy levels.
According to the consultant Indesa, the occupancy level in the first quarter of 2011 was 95.4%, versus 86.5% for the same period this year.
Speaking about the topic, the Corporate Finance Director of Indesa, Francisco Escoffier, said that, "In the next couple of years it is not expected that the total demand for offices, including locally generated demand and the demand generated by the arrival of multinationals, will be enough to absorb new supply coming, so the available inventory will go up and occupancy will do down ... in the research occupancy means that there is physically one tenant in the property, which is a conservative definition. "
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.