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Real estate general information! - Commercial real estate!
Commercial real estate!
In regards to the office market, 2008 was simply the best year ever; the peak was in the third quarter. Lease values are high, vacancy rates are low, and the net absorption was the highest ever. In São Paulo, the largest commercial real estate market in Brazil, the vacancy rate in Class A buildings was 7.5% in the end of 2008, down from 8.5% in the same period of the previous year. Additionally, lease values continue to climb, increasing 5.6% YoY. The average monthly lease value for office space in Class A buildings in 2008 was R$80/m².
However, the commercial real estate market is expected to evidence the international scenario in 2009. Indeed, the fourth quarter of 2008 already presented significant change, with diminished net absorption, delayed new inventory and higher vacancy rates. Although the volume of new inventory expected in the next 2 years remains high, many developments have been postponed by over half a year, which should avoid any sharp increase in vacancy rates. Absorption is expected to remain stable.
On the other side of the market, it has been difficult for companies to encounter the physical space that best suits their needs. Location, costs, contract arrangements, flexibility and infrastructure are just a few of the concerns. Additionally, companies recently began to focus their attention towards spaces where they can locate all of their operations on a single horizontal space, which fosters better dynamics within the organization. Severe competition in the lease market has toughened the game even further. |
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Comercial Projects - Comercial buildings
1) Commercial building in Sao Paulo, Price about 135 million Reais, rental return about 12% (guaranteed)
2) Smaller commercial building, Price about 18 million Reais, rental return about 12% (guaranteed)
3) Commercial building, Price about 70 million Reais, rental return about 12% (guaranteed), the rental client has a contract signed until year 2020
4) Commercial land in Barra, 10.000 m2, Price about 65 million Reais, about 30 million Reais to construct 10.000 m2 of commercial building in top of the land, when finished and have rental clients a return on about 600.000 R$ per month in rentals.
The first three projects are guaranteed income and low risk, still a good return for investors on about 12% per year. |
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