The office market in the major cities of South America — São Paulo, Rio de Janeiro, Bogotá, Santiago, Lima and Buenos Aires — has distinct characteristics, influenced by both the population and the available office space in each location.
These differences are crucial for investors and occupiers when analyzing opportunities and challenges in the corporate real estate (CRE) sector in these locations.
Population and Office Space: Relevance in Market Analysis
The relationship between population and available office space is a vital indicator for understanding supply and demand in this market. Cities with large urban populations tend to have a higher demand for office space, but the availability of commercial space (in square meters) also needs to keep up with this growth.
The discrepancy between these factors can create imbalances, resulting in areas with excess supply or a lack of adequate space to accommodate businesses and companies.
Let's analyze the relationship between population and office space in the main cities of South America, based on the data presented in our latest Regional MarketBeat.
• São Paulo: the largest corporate market
With 20.7 million inhabitants and an office area of 2.94 million square meters, São Paulo is the largest office market in South America. The city stands out for its robust economy and diversity of companies, which drive the demand for corporate space.
The greater availability of space reflects the capacity to meet the growing demand of multinationals, large companies and startups looking for a strategic location for their businesses. São Paulo is the main business hub in the region, and this is directly reflected in its real estate supply.
• Rio de Janeiro: a significant supply
Rio de Janeiro, with a population of 11.8 million inhabitants and an office area of 1.57 million square meters, also has a significant corporate real estate market. Although the city has a smaller office area than São Paulo, Rio is still an important center, especially in sectors such as oil, gas and tourism.
The presence of large state-owned companies and the growth of the services sector maintain the demand for offices, although the supply of new developments is weaker compared to São Paulo.
Bogotá: a growing market
Bogotá, with 8 million inhabitants and an office area of 1.77 million square meters, shows an interesting balance between population and office supply. The Colombian capital has stood out as a financial and technological center, attracting international companies.
The amount of available space per inhabitant is high compared to other cities, which indicates a market that is still growing and has the potential to absorb new businesses.
• Santiago: space efficiency
Santiago, with a population of 8.4 million inhabitants and an office area of 1.75 million square meters, has a similar ratio to Bogotá. The Chilean capital is one of the most efficient markets in South America, with a stable economy and a strong demand for corporate space, especially in the financial sector.
Santiago has an office area that is adequate for the size of its population, maintaining a balanced market.
• Lima: Lower but growing demand
Lima, with 11.1 million inhabitants and an office area of 1.4 million square meters, has a relatively small supply compared to its population size. This indicates a market that is still expanding, with potential for growth in the coming years.
Lima is becoming an important regional hub, and demand for new corporate developments is on the rise as more companies set up shop in the city.
Buenos Aires: Demand complexity
Buenos Aires, with 16.5 million inhabitants in the metropolitan area and an office area of 1.69 million square meters, faces a challenging scenario. Despite its large population, the supply of office space is not as expansive as in São Paulo, which may be a reflection of the Argentine economy, which has faced ups and downs. Economic instability impacts the demand for new corporate space, making the market more unpredictable.
Understanding the potential of each market
Analysis of population and office space by city reveals how each South American real estate market has its own particularities. Cities with larger populations and office space, such as São Paulo, stand out as regional business hubs, while others, such as Lima and Buenos Aires, face challenges in balancing supply and demand.
This data is essential for investors, developers and occupiers to understand the potential of each market and the growth opportunities, whether for business expansion or new real estate development projects.
The relationship between population and office space also indicates the level of saturation or potential for expansion of the market, influencing strategic decisions in the CRE sector. In addition, this relationship must be added to other elements and contexts that also directly influence the dynamism of the real estate market and that can vary in each region.
