The rising trend in remote working and hybrid work culture is taking its toll on commercial real estate in the Chilean capital Santiago, pushing vacancy rates to unprecedented heights.
An increasing number of commercial buildings are falling vacant across Santiago, as more and more people choose to work from home, reported local news outlet La Tercera citing data collected by real estate consultant Global Property Solutions (GPS).
“It is the highest level vacancies since we began keeping records,” stated Francisco Rojas, executive director at GPS.
An office complex called New Cordova has remained fully empty ever since it opened for rent, Rojas pointed out, adding that business owners looking for commercial space are opting for smaller offices. Those who would have looked for a 1,500 square meter office two years ago are now willing to settle for a space of 500 square meters.
That is largely because of the trend in hybrid work culture. Most of the new hybrid offices in Santiago are smaller in size and are located on the outskirts of the city.
The pandemic dealt a devastating blow to the premium office space market. Property owners will have to come up with new strategies to rent out vacant offices, commented Rojas.
Around 22,000 square meters of premium office space were leased during the three months period between June and August 2019. That figure has now been reduced to 2,200 square meters.