Argentina. According to a report published by the corporate real estate company Cushman & Wakefield, between the third and fourth quarters of 2014 office rental prices in the Federal Capital and the Greater Buenos Aires area decreased by 5.1%. This is because about 80 percent of available spaces have not been occupied for more than 6 months.
"It happens that in an economic and political context of uncertainty, companies are waiting for clearer signals about the direction that the country could take. And, as a result, the absorption of offices was going down. This causes an accumulation of available surface for a longer time," explained Herman Faigenbaum, managing director of C&W in Argentina.
In the same sense, Faigenbaum pointed out that "when a landlord puts offices for rent, he does it at the market price, but he starts to lower it if he does not rent it, and ends up closing contracts for a much lower price. Maybe 20 or 25% less. This situation causes it to drag other properties in the market," he warns.
In the local market, the outlook for this year, according to C&W, is similar to 2014. "The big unknown will be the evolution of prices. It remains to be discovered whether the owners of properties affected with long-term vacancy will be willing to continue negotiating their prices downwards to be able to occupy them or if they have already touched their flat," Faigenbaum said.
