Renting Prime Office Space in Rio de Janeiro is More Expensive Than in Manhattan
Source: Business Office Suites USA
According to a study by Cushman & Wakefield South America, prime office space for rent in Rio de Janeiro has overtaken that of New York as being the most expensive in the Americas. According to analysts, boosted by the anticipated demand in 2012, rents should continue to increase in Rio. However, in São Paulo there should be an increase in vacancy rate because supply is expected to increase from 300 to 400 thousand square feet of new office areas in Sao Paulo per year from 2012.
Their study revealed that the price of prime office space in Leblon, the most searched area of Rio’s CBD, is US$ 69,4 per square meter. The second most expensive prime office rent price in America is in Midtown Manhattan, near Central Park, which costs US$ 62,6 per sq meter, third place goes to São Paulo:US$ 60,3 per square meter and Washington DC ranks fourth.
The main factor driving these office price increases in Brazil’s main cities is the mismatch between low supply and huge demand. In Rio de Janeiro, construction activity remains heated because they will host the 2014 Football World Cup final and the 2016 Olympic Games.
At the same time that many commercial buildings are being built, there are also essential infrastructure developments going on such as the expansion of subway lines and works in many streets creating awful traffic jams and congestion. Because of this it has become critical for many companies to have an office in the right location, close to clients and suppliers.
Another reason for the surge in property prices and rentals is Rio’s importance as an oil hub following the recent discoveries of oilfields off the coast by Petrobras. The average vacancy rate in commercial offices in São Paulo and in Rio, calculated by CB Richard Ellis, has reached all-time low records. In São Paulo, it was 4,2% in the third semester of 2011 and in Rio 3,1%.