Narayan AmmachchiOffice building owners in Argentina are having a rough time keeping their tenants around due to the increasing popularity of coworking spaces among businesses.
Local real estate agents have reported that numerous tech firms renewed their lease contracts at the beginning of the year, achieving significant reductions in rent.
The shift towards hybrid work models prompted companies to opt for fewer square meters of office space. Despite a daunting 51.6% inflation rate in the final quarter of 2023, CBRE has noted a surprising 1.2% decrease in office rents for the first quarter of 2024.
In some areas, the decline has been even more pronounced, with prices plummeting by 9.52% to reach US$19 per square meter.
According to a report by CBRE Argentina, vacancy rates, a crucial indicator in the real estate market, have soared to 18.8%. This marks a significant increase compared to the same period in 2023, with the current figure exceeding the previous year’s first quarter by 2.3 percentage points.
The pandemic spurred a shift towards coworking spaces. Companies are finding it more attractive to rent office space on a weekly basis, offering greater flexibility compared to traditional lease agreements.
“This trend aligns perfectly with the evolving needs of the modern workforce,” said Uri Iskin, CEO and Co-Founder of coworking company HIT, to local paper El Cronista.
HIT boasts an occupancy rate exceeding 90%, serving over 500 clients, with 80% being corporate entities.
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