São Paulo’s Rental Market Recovers As Companies Return to Offices

After two years with negative net absorption, the Brazilian financial capital’s rental market recovers as tech companies expand their presence

Vista aérea da região da Faria Lima em São Paulo
November 21, 2022 | 05:54 PM

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Bloomberg Línea — After two years of companies relinquishing office space in São Paulo, the market is recovering as large companies expand their occupation of physical spaces in the city, the largest office real estate market in the country, while the return to offices is being led by one sector: technology.

A survey carried out by SiiLA, a multinational company that analyses the commercial real estate market, and exclusively made available to Bloomberg Línea, points out that the company leading office rentals in Brazil to Q3 is Google (GOOG).

The technology giant, which had already expanded the occupied area of its headquarters in the Pátio Victor Malzoni building on Faria Lima Avenue in São Paulo, from 163,611 square feet to 191,597 in 2021, leased more space in two other nearby buildings.

According to SiiLA, Google has leased more than 159,305 square feet this year: 86,111 square feet in one of the two high-end ‘A+’ buildings of the São Paulo Corporate Towers in Vila Olímpia, and more than 68,000 square feet in Sky Corporate, another high-end property in the same neighborhood.

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“When the pandemic started, there was only one option: work. There was an increase in productivity. But then, with the reopening of the establishments, a greater dispersion began, and the charm of the home-office started to decline. That’s when companies found an ideal model: the hybrid one,” said Giancarlo Nicastro, SiiLA’s CEO.

Nicastro said that, during the pandemic, the net absorption (difference between leased and returned areas) of offices became negative. Things changed however in the first quarter of this year, he says, with the economic recovery and companies returning to their offices.

Today, the office market in São Paulo (central business district and classes A and A+) has a positive net absorption of almost one million square feet, although new stock, on the other hand, is limited: with about 323,000 square feet, compared to around 1.6 million square feet in 2021.


Nicastro said that many companies were, in his evaluation, delaying making big decisions due to uncertainties brought by Brazil’s presidential elections and that, as a result, the expectation is that renting will increase during Q4.

In second place in the ranking of largest new leases is Singaporean retailer Asian Shopee, with an absorption of around 150,600 square feet during the period, in enterprises class “A+” in São Paulo, comprising around 118,400 square feet in the Faria Lima Plaza building, in the Largo da Batata area, and another 29,000 square feet at Berrini 1, on Berrini Avenue, close to Vila Olímpia.

In third place for space rented is Mexican used car sales startup Kavak, which has secured the lease of almost 97,000 square feet in the B2 Paineira tower at Parque da Cidade, an ‘A+’ category space in the region of Avenida Chucri Zaidan, in southern São Paulo.

Higher prices

Another study released by Buildings magazine last week shows that the Nova Faria Lima region in São Paulo has the highest average asking price for rent in the capital, at 161.62 reais ($30.30) per square meter.


The justification is precisely the scarcity of corporate space available and the high demand, leading to prices above those of other regions. According to Buildings, spaces in Faria Lima that are entering the market already have offers well above the price of other spaces, causing the average price to rise further.

But there are those who have relinquished rented space.

While some companies saw the moment as an opportunity to expand their physical space, others opted for a reduction. This was the case, for example, of Itaú Unibanco (ITUB4) and Caixa Econômica, each of which relinquished almost 41,000 square feet in the period, according to data from SiiLA.


At the top of the ranking of companies that returned the most high-end commercial spaces was 99, a transportation app technology company, which gave up around 124,600 square feet in the Carlos Bratke Jacarandá building, followed by Oi Telecomunicações (OIBR3), which relinquished around 71,000 square feet in the EZ Towers building, in the Chácara Santo Antônio neighborhood, in city’s south.

A related move, but of a different nature because the contract had not even been signed, was made by Amazon (AMZN).

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After two years of negotiations, Amazon decided against occupying around 215,000 square feet in the Faria Lima Plaza Building, the so-called FL Plaza, in Largo da Batata, at the northern end of Avenida Faria Lima in São Paulo, Bloomberg Línea reported at the time.

The company’s adaptation to the hybrid and remote work model, the challenging market scenario with rising global interest rates, and slowing e-commerce sales growth are among the main reasons for Amazon’s U-turn, according to sources with knowledge of the deal who asked to remain anonymous.

Here are the five companies that have relinquished the most space this year:

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