Activity in Bogotá’s prime office market has shown a slowdown in rental dynamics during the second quarter of the year, a key seasonal period for companies’ decision-making. The consolidation of office space and some relocations have caused a slowdown in the rental dynamics during the second quarter of the year, a key seasonal period for companies’ decision-making. decrease in the absorption indicator and a marginal increase in vacancy, which generates opportunities in available spaces in strategic locations.
This is confirmed by the latest report from Cushman & Wakefield on the dynamics of the office sector in the second quarter of the year.
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Regarding supply and demand, the firm observed a low commercial dynamic, but nevertheless They highlight a positive absorption of nearly 10,000 square meters in the different corridors analyzed.
They add that during this period, occupied space was also freed up, which, due to demand, presented an opportunity given the shortage of spaces with efficient plants and in high absorption areas, such as the Chicó corridor.
Now, regarding the list rental price, the quarter closed at $74,662 per square meter on a monthly basis, with a marginal variation compared to the same period of the previous year. However, when examining the behavior by submarket, increases are recorded in all of them, for example, in Chicó, Nogal-Andino and Salitre, the increases exceeded 8%.
These increases “are mainly due to the release of spaces with a higher list price.” With this performance, they hope that this The upward trend is expected to continue in the coming periods due to the low supply in some corridors and the entry of new buildings with high technical specifications.
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As for the short-term occupancy intention, they observed a growing interest for the coming months, which continues to adjust the supply in the most competitive corridors. In addition, they identified the initiative of several developers to structure new office projectsdriven in part by gradually declining credit rates and an occupancy trend in certain areas of the city.
“These projects have development times of around 24 months. This new market dynamic highlights the advantages of office spaces and how they have adapted to the new needs of users, especially in terms of hybrid work models and efficient spaces with disruptive approaches to the occupancy experience. Furthermore, these projects are aligned with decarbonisation goals thanks to their sustainable designs and environmental certifications,” the report explains.
It is worth remembering that, during this period of time, the real estate sector observed an increase of 18.6% in the area licensed for construction in April 2024 compared to the same month of the previous year, growth due to the increase of 17.3% in the area approved for housing and 23.8% in non-residential purposes.
“These results indicate a revival in the sector, driven in part by greater confidence in economic stability, recent reductions in the monetary policy interest rate and expectations of sustained growth, with projections of a GDP increase of 1.4% in 2024 and 3.2% in 2025,” manifest.
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Future outlook
At the end of the first half of the year, the firm registered 143,569 square meters of construction area in the city. With this growth, they project that by the end of 2024, nearly 57,000 square meters of Class A office projects will be operational, with the majority of this new supply concentrated in Calle 100 (55%), Noroccidente (23%) and Nogal-Andino (12%).
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“Currently, there is a projected surface area of 757,752 square meters with delivery times of seven to 10 years, with a significant concentration in areas such as Salitre, which represents 36%, followed by the center with 22% and the northwest with 18%. In addition, projects such as Proscenio and Connecta 80 stand out, which will have a significant impact on the increase in the office inventory. However, it is essential to keep in mind that the continuation of these projects will depend on various factors, such as macroeconomic behavior, investment conditions and lower credit rates, all of this in parallel with the absorption performance of the next projects. It is important to highlight that, within the stock of projects, there are some that still do not have a confirmed construction start date,” they concluded.
Paula Galeano Balaguera
Portfolio Journalist
