See below the main changes foreseen in the new Master Plan, with a direct impact on the real estate market.
Public transport routes
One of the main points of change is the expansion of the so-called Urban Transformation Structuring axes, which are the areas surrounding metro and train stations and bus corridors.
As O Globo explains, in a range of up to 600 meters from stations and 300 meters from bus lanes, it was allowed to build up to four times the size of the land, making taller buildings possible. This is because the 2014 Master Plan aimed to increase the supply of housing close to public transport, discouraging car use and bringing people closer to work.
Now, the proposal is to increase the radius of influence of the axes to 800 meters away from the subway and train and 450 in relation to the bus corridors. In practice, the axes become larger and enter the core of neighborhoods, allowing taller buildings on roads where they are currently not authorized.
Larger buildings in the heart of neighborhoods
The maximum construction potential of buildings in areas outside the influence of the Urban Transformation Structuring Axis increases from up to twice the land area to three times.
Why is the Master Plan so important for the real estate market?
The PDE has been the instrument for regulating the real estate market, it indicates the direction the city will follow in the coming years. The first projects developed under the new PDE should be launched from 2025.
The new rules will increase the supply of land for developers, who are looking for opportunities to develop their areas of interest to the maximum. Changes in rules directly influence your decision-making.
Naturally, the impact of the Master Plan on the corporate real estate market is minimal, due to its dynamics, different from the residential one. Corporate buildings are generally concentrated in the so-called CBD - Central Business District, which are regions consolidated as financial and commercial hubs, headquarters of large companies and home to various corporate ventures.
CBDs in São Paulo:
• Marginal Pinheiros
• Pine trees
• Faria Lima
• Itaim Bibi
• Vila Olímpia
• Chucri Zaidan
• Chácara Santo Antônio
• Santo Amaro
However, this relationship between housing and the workplace is directly related to urban development, especially with regard to ‘‘Commute’’ - from English, “route to work”. This is the central point of the entire discussion surrounding the PDE.
The way we live and work has changed a lot in recent years and both are increasingly integrated. Mixed-use buildings, for example, are already a reality in the capital. They bring together housing, work, commerce and leisure in a single location. This type of property will certainly be influenced by the new PDE.
Changes in the profile of residential properties also reinforce this integration between housing and work. It has become increasingly common, for example, to have condominiums with coworking spaces and apartments with environments designed exclusively for home offices, which marks the consolidation of the hybrid work model and the new way of living and working. The popularization of multifamily in the Brazilian market in recent years proves this trend.
New stocks of corporate slabs
Still recovering from the pandemic and with a vacancy rate of 22.51%, the city of São Paulo is gradually resuming new deliveries of corporate buildings. There was practically no new stock in 2022, and currently, the city has 40,857 m² under construction on Av. Chucri Zaidan; 15 thousand m² on Av. Faria Lima; 30 thousand m² in Itaim; 14,777 m² in Marginal Pinheiros and 8,400 thousand m² in Vila Olímpia, as shown in MarketBeat for the second quarter. Click here to access the full report.
In the coming years, the delivery of new stocks must progress to follow two important factors: the economy, since in favorable scenarios companies can expand their operations; and face-to-face work, the more intensified it is, the more space needed.
PDE divides opinions
We consulted architect Marcos Toledo, from Arco Arquitetura, about the positive and negative points of the Strategic Master Plan for the city of São Paulo.
Among the positive points, he highlights the incentive for the development of mixed-use properties and also the extinction of the mandatory lateral setback on lots: ‘‘in buildings with a height equal to or less than 10 meters, a minimum setback does not apply. These setbacks had no other justification than a cultural issue. I believe this was a positive measure. These points were great victories in relation to the evolution of São Paulo society in terms of urban planning,” he comments.
Among the negative points of the PDE, Toledo comments on the urban planning technique used, called Transport-Oriented Development – TOD, which aims to create homogeneity in density, facilitating transport between points and people. But, according to him, due to the distance between theory and practice, policies guided by TOD around the world are having their effectiveness questioned.
‘‘It has already been seen in practice that the idea of having optimized transport, offering incentives to build more and compact the city closer to lines with high capacity for transporting people, produces the opposite effect to that desired. One of these examples is Avenida Rebouças, where all modes of transport are available and is currently the Avenue with the worst level of mobility in the city’’ he says.
In his opinion, what we will see in relation to the real estate market in the coming years will be more of the same: densification in the city's prime areas. Companies operating in the developed sector of São Paulo, center and southwest, will probably find regulation for this significant growth in the Land Use and Occupation Law, and this may lead some locations to exhaustion of support capacity.
‘‘the big problem is that some measures taken due to this exhaustion end up generating problems on a geometric scale. One of these examples is Minhocão, a landmark in the absolute exhaustion of the capacity of the transport system in the center of the city of São Paulo in the 60s”, he concludes.
Marcos recognizes that making public policies in such a large country, especially in the city of São Paulo, is really challenging, and states that one of the solutions begins with the synergy between urban planners and transport engineering, a relationship that sometimes does not exist, not only in Brazil, but in several countries around the world.