Three years after that March in which everything changed in the world and human beings had to learn “in a fright” to stay at home, the scenario for many of the real estate funds it’s still a matter of putting pieces together and rebuilding, pmainly for corporate slabs It is brick backgrounds.
With the pandemic Covid-19, properties were empty. However, it’s been a while since life returned to normal and commercial buildings were once again occupied. However, many offices remain unoccupied.
The pandemic not only influenced the vacancy of properties, as also reflected in skyrocketing costs. And renting was no different.
It is known that the region of Avenida Brigadeiro Faria Limawhere the financial center of São Paulois one of the most expensive and requested in the city.
The vacancy rate in the region that houses the “A office” category is 7%, says the manager of Zavit Capital, Daniel Alouan. The area, considered premium, is formed by the Vila Olímpia neighborhood and the region of Presidente Juscelino Kubitscheck avenues (JK) and Faria Lima.
“This is axis 1. During the months of social isolation, the vacancy rate reached close to 10%, but without advancing the double-digit mark”, comments Alouan.
Real estate funds attentive to the ‘new Faria Lima’
With rent expensive and few properties available, the Faria Lima region is taking a backseat in the post-pandemic period. As a result, real estate funds and tenants are paying attention to another region, called “axis 2”, explains the Zavit manager.
This is the region of Avenida Engenheiro Luís Carlos Berrini and Doctor Chucri Zaidan, in Brooklyn. According to the manager, there is a great offer of buildings in the region. Which explains a higher vacancy, close to 34%, he says.
Recently, the real estate fund hedge office (HOFC11) closed the lease of two floors in a building that is part of axis 2. In the communiqué about the rent, the FII commented that the Chucri Zaidan region is the axis of the capital of São Paulo which, today, concentrates a greater demand for rental properties.
“It is a slightly newer space that is developing. It is a region that delivered and is delivering many properties. The demand for axis 2 is because rent in Faria Lima is more expensive”, points out Alouan, reinforcing that properties in the Chucri Zaidan and Berrini regions “are cheaper” to buy.
Back to the offices helps FIIs
The timing for domestic financial assets is not great amid rising interest rates. fees here and in the main economies, consistent rise in inflationamong other macroeconomic factors.
Many FIIs, from several segments, are with discounted prices. However, the return to face-to-face work can contribute to improving their performance, especially those with slab and brick backings.
Alouan points out that the return of face-to-face services has had and will have a strong impact on corporate offices. “It is important to consider that unemployment has dropped during the pandemic. Companies have hired more people and are now looking for larger spaces to allocate them, ”he observes.
The Zavit professional adds that companies are looking for properties because they needed to return the leases during the period of social isolation to contain the advance of the coronavirus.
Should I invest in corporate slabs and brick bottoms?
Zavit’s manager draws attention to a detail that, according to him, investors do not take into account. “More than the vacancy rate, it is important to observe the leverage of the funds before becoming a shareholder”, he ponders.
He reinforces that vacancy can be controlled by the property owner, since “it goes up a little, goes down a little”.
“On the other hand, with high leverage, you have to think that the money from renting a property can come in six months after the lease contract”, he says, adding that the rented property also reflects in cost reduction for the real estate fund.
Alouan and other managers have been signaling that these types of funds should show improved performance in the medium term.
In a recent report, the BTG Pactual assessed that, even in the face of an unfavorable short-term scenario, corporate slab real estate funds linked to premium assets should perform well in the coming years.
This is due to the low level of vacancy and the low number of projected property launches.
I am an author and journalist with a focus on market news. I have worked for a global news website for the past two years, writing articles on a range of topics relating to the stock market. My work has been published in international publications and I have delivered talks at both academic institutions and business conferences around the world.