Market Rent: SiiLA Introduces Exclusive New Metric for Asset Value per m2 in Latin America's Commercial Real Estate Market
SiiLA, a multinational leader in real estate market intelligence, has unveiled a groundbreaking metric to enhance the accuracy of cre property price analysis in Latin America.
The Market Rent metric, recently launched by SiiLA in LATAM, is designed to provide a more precise assessment of real estate asset values. This innovative tool offers comprehensive data for all monitored office and industrial properties, along with regional and state averages.
Traditionally, real estate professionals have relied on the Asking Rent of available rental properties to evaluate market values. However, this approach can be misleading, as it only reflects the asking prices of available properties and does not account for occupied assets.
"In high-demand areas like S?o Paulo′s Faria Lima region, where prime properties are fully leased, vacancy is typically limited and often involves lower-quality assets. Therefore, relying exclusively on the asking price in these regions fails to provide an accurate reflection of the true market value of the properties," explains Giancarlo Nicastro, CEO of SiiLA.
SiiLA's Market Rent methodology provides a more accurate value by analyzing multiple factors, including property availability, location, construction quality, transaction history, market conditions, demand, and comparable properties in the area.
Itaim Bibi Leads the Market Rent Rankings for S?o Paulo Corporate Assets; Discover the Top 5 Regions
With an average Market Rent of R$ 307.12 per square meter, Itaim Bibi in S?o Paulo's southern region tops the list of areas with the highest value for Classes A+ and A office spaces in the city for Q2 2024. According to SiiLA’s Market Analytics, Itaim Bibi is home to renowned office towers like the Infinity Tower (photo), which houses international firms including ByteDance (owner of TikTok), Apple, and Goldman Sachs.
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The rankings continue with Faria Lima in second place, with an average Market Rent of R$ 237.52/m2. Following are the JK region at R$ 224.83/m2, Pinheiros at R$ 137.03/m2, and Vila Olímpia rounding out the top 5 at R$ 132.50/m2.
SiiLA’s analysis of Classes A+ and A office spaces in S?o Paulo's central business districts reveals that the gap between Asking Rent and Market Rent can reach up to 11.55%, as seen in the JK region. In this area, high-end properties have an average Market Rent of R$ 224.83/m2, while the average Asking Rent stands at R$ 254.19/m2.
The JK region currently has a total of 308,980 m2 of corporate office space with a vacancy rate of just 3.90%. Notable properties include the JK Complex, which comprises four towers, three of which have zero vacancy.
For a detailed look at SiiLA’s new metric, contact us at [email protected] or call us at +55 11 3046-9595 or +55 11 97860-4296.