Study: Bogotá Class A Office Space Absorption Jumps 39% In 2018
Bogotá, despite the country’s economic slowdown, consolidated its position as the country’s largest Class A office space market, according to the MarketBeat study conducted by real estate firm Cushman & Wakefield.
Class A offices (which include sub-classes AAA and A), the only ones monitored in this study, are the highest quality of office space with premium standards that support not only issues such as sustainability, but also are attractive to multinational firms entering the Colombian market who tend to seek this type of property, according to their commitments of quality, efficiency and safety.
- The record figure corresponds to Bogotá offices, the most internationalized market in Colombia, which is projected to continue growth in 2019.
- The increase is the highest in 8 years.
- Occupancy had its maximum and historical peak in the third quarter with 76,181 m2 (820,000 square feet).
- The Salitre corridor near the El Dorado International Airport has the highest leasable area at 41.9% of the Bogotá market.
The highest absorption index for the year was in the third quarter of 2018, when it reached a historic figure of 76,181 m2, corresponding to 41.8% of the annual total. Likewise, data on the area occupied in 2018, compared to 2017, suggest a growth of 39% in absorption, a record that shows an increase in demand and improvement in the economy from at least a real estate perspective.
Economist Andrea Duque Gaviria is the head of valuation and advisory for Cushman & Wakefield in Colombia
According to Andrea Duque of Cushman & Wakefield, 950 m2 were also released in this period, 6% less than in 2017, while inventory increased by 9.3% compared to 2017 , and the vacancy rate (area available for rent), only recorded a decrease of 4.3% percentage points, adding to the good prospects of this sector and a balanced development of transactions.
In the fourth quarter of 2018, the capital city presented an availability of 141,732 m2, located at 81% in the Central Business District, (CBD), which corresponds to the metropolitan areas of Avenida Chile, Calle 100, Centro, Chicó, Nogal-Andino, Salitre and Santa Bárbara, where the vacancy reached only 8%.
The Salitre corridor concentrated 41.9% of the available surface, followed by the Noroccidente (Northwest) corridor (18.9%), which corresponds to a non-traditional corporate zone, (NON CBD), which includes projects such as Colina Centro Empresarial or Floresta Business Center, while the sub-markets with less availability were Avenida Chile, Calle 100 and Centro (Traditional Downtown).
The net absorption of the quarter was 22,668 m2, where the Salitre submarket stood out with 47.8% of the total, supported mainly by the area taken in the Central Point and Elemento buildings.
The price rent requested, very much in accordance with the location and characteristics of the building, remained at an average of $ 64,000 pesos per square meter, which measured in dollars, shows a downward trend. It is necessary to clarify there that the price of rent requested in the zone NON CBD, is 7% less than that of the CBD zone, opening possibilities of location in non-traditional areas, but with high possibilities of development.
By 2019, the Cushman & Wakefield study projects that 319,411 m2 will correspond to 19 Class A buildings that are 83% located in the CBD, 30% in the Cll 100 submarket and 27% in Salitre.
“In addition, other future buildings are planned, which still have no delivery date, but which would add some 400,000 m2, located at 86% in the CBD area,” says Duque.
This area in project and construction phases would increase by 46.4% compared to the historical average of new annual square footage delivered, a rate expected to sustain the process of development and investment in the country.
Class A buildings (A + and A) are those buildings with high technical and safety specifications, with an age between zero and ten years; with leasable area from 1,000 m2 to 1,500 m2; between one and four offices per floor; heights up to 2.70 m, holders or in process of sustainability and environmental certifications such as LEED or AQUA and strategically located in areas with easy access and roads.
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