Where the office demand in Bogotá and Mexico City will move? Bogotá presents positive absorptions in recent quarters.
Bogotá office CBD has positive takeovers in 2021 and 2022 and lessor markets. CDMX CBD with positive absorption in Q4 of 2021 and Q1 of 2022.
Author: Sergio Rojas Leyva y Gustavo Laguna
Date: 2022-06-22
The class A+ and A office market in Bogotá has an inventory of 3,029,809 sqm, as of Q1 2022 vacancy stands at 11.1%, that is, 334,970 m2 unlike other markets in Latin America where availability is more than double as is the case of Mexico City where the vacancy in Q1 of 2022 is located at 25.6% with 1,837,402 sqm available, of a total inventory of 7,169,618 m 2 class A + and A.
Absorption of Class A+ and A office spaces in Bogotá and Mexico City
Mexico City class A and A+ office market is 2.4 times the size of Bogotá. In Bogotá, in the corridors of the CBD (Central Business District ) the vacancy has decreased in recent quarters, we find several corridors with landlord markets . The low vacancy of Av. Chile is surprising, with only 15,081 sqm available, that means, only 6.5% of available space.
Call Centers, BPOs (Business Process Outsourcing), pharmaceutical companies and technology companies are the businesses that have absorbed the most square meters in recent quarters, both in Bogotá and Mexico City.
Source: Colliers, 2022
In Mexico City we find ourselves both in the CBD and in the rest of the office corridors with tenant markets, no broker as of Q1 in Mexico City is landlord market.
Reforma is the office corridor with the lowest vacancy in Mexico City at 15%, followed by Periférico Sur 15.4% and Bosques 17.8%. The Interlomas, Lomas Altas and Norte corridors present a vacancy in all cases of 45% in contrast to the highest vacancy in Bogotá in the Centro corridor with 20.8%.
In Bogotá we find vacancies that are around or less than 10% in different corridors of Bogotá, consequently, prices and conditions are favorable to Landlords.
Source: Colliers, 2022
In Mexico City we find that all markets in Q1 2022 were tenant markets as there are many available options to choose from.
Source: Colliers, 2022
Where will the demand for corporate office space move?
Due to the conditions of recent months, companies are taking a look at the best office corridors, the buildings with the best location and technologies, as well as the greatest number of amenities, with different objectives:
- Flight to Quality : Relocate your operations in a premium corridor or building at an excellent price derived from high vacancy, this is the current particular case of Mexico City and some office corridors in Bogotá.
- Talent Attraction and Retention: companies recognize that the better the building and the workspace, the more attractive it is for the best executives to decide for a company.
- Space Optimization: derived from the hybrid model, there are great opportunities to optimize and reduce the footprint occupied by companies, either by staying in the same building or by moving to a better building.
- Take advantage of Timing and Opportunities: there are currently spaces in excellent conditions that have been left by different companies with conditioning or even in Plug & Play format (with furniture) which substantially reduces investment in CAPEX, these spaces are being preferred over spaces in shell.
- Consolidate or Transform the Company Culture: renovating the workspace is an excellent opportunity to change and improve the organizational culture, the design of the workspace allows to encourage collaboration and refresh the way of working and the relationships between the collaborators.
- Flexible Space: the flexibility is a characteristic that will continue to be preferred by companies, for certain lines of business, lease contracts that allow expanding or reducing their footprint as well as being flexible with their terms will be an objective to be considered by companies.
Sergio Rojas Leyva Sergio.Rojas@colliers.com , hola@sergiorleyva.com
Gustavo Laguna Gustavo.Laguna@colliers.com
