According to the Cushman & Wakefield report, at the regional level the production of new warehouses increased by 24% compared to 2022, leading the Chilean capital and the financial center of Brazil with 319,060 and 584,600 m2, respectively, at the end of 2023.
During 2023 there was a sustained increase in investor interest in industrial assets, particularly Class A or premium warehouses, due to greater demand for better quality spaces, positioning Santiago (Chile) and Sao Paulo (Brazil) as the cities with more net absorption and construction of warehouses in South America. This is indicated by the latest MarketBeat Industrial South America, prepared by Cushman & Wakefield, at the end of 2023.
According to the report, at the regional level the production of new warehouses increased by 24% compared to 2022, leading the cities of Santiago and Sao Paulo with 319,060 and 584,600 m2 , respectively.
“It is important to highlight that the pre-leased surface of the logistics centers in Santiago responds to a demand from 2022, which was extended to 2023, driven by the boom in electronic commerce in the previous period,” says Ariel Benzaquen, Country Manager of Cushman & Wakefield Chile .
Demand for premium wineries
During 2023, the demand (net absorption) for storage spaces in the region was on average 1.3 million m2, which represents an increase of 20% compared to the same indicator of the previous year.
Along these lines, Sao Paulo, Santiago and Bogotá stand out as the cities with the highest net absorption, with 558,473 m2, 271,314 m2 and 244,688 m2, respectively. To a lesser extent, they are followed by Buenos Aires (81,039), Lima (80,785) and Rio de Janeiro (52,245).
“In Lima and Bogotá, demand today demonstrates a greater magnitude than the surface area under construction, which will possibly translate into a progressive decrease in the availability to rent warehouses in these capitals. On the other hand, it is observed that demand is decreasing in Buenos Aires and Santiago, based on the surface area expected to enter the market in 2024, which will probably have an impact on the increase in vacancy and the subsequent decrease in rental prices. " , analyzes the Country Manager of Cushman & Wakefield Chile.
Availability and prices
The average vacancy rate in South America is around 8%, with an average rental price of US$6.13 per m2.
According to the analysis by Cushman & Wakefield, the city with the lowest availability of warehouses for rent is Bogotá with 1.19% vacancy, followed by Santiago (2.27%), Buenos Aires (5.7%), Lima ( 8.25%), Sao Paulo (8.5%), and Rio de Janeiro (18.89%).
“An important change compared to the previous year is the 74% increase in vacancies in the region; going from 4.52% in 2022 to 7.86% in 2023. This symbolizes a change in the dynamics of demand and stabilization of vacancy and supply prices,” says Benzaquen.
Regarding rental prices, the cheapest square meter is in Rio de Janeiro (US$ 3.83 per m2), followed by Sao Paulo (US$ 5.85 per m2), Lima (US$ 6 per m2) , Bogotá (US$ 6.32 per m2), Santiago (US$ 7.07 per m2) and Buenos Aires (US$ 7.69 per m2).
“In short, the demand for higher quality spaces or premium warehouses is a trend that is observed at a regional level, where there is a strong absorption of spaces with a focus on certain specifications, such as height, soil resistance, location and sustainability,” points out Ariel Benzaquen, Country Manager of Cushman & Wakefield Chile.
