2On November 17, Monday, an article published in the G1 website, signed by Alexandro Martello, announced the Gross Domestic Product (GDP) forecast, which increased by 0.59% between July and September 2014 in comparison with the previous three months. Such result may indicate that the Brazilian economy would be leaving a technical recession and recovering at a slow pace.

Maybe too slow though, especially for the civil construction sector. The study Sondagem da Construção (Construction Analysis)released last October 27 by the Câmera Brasileira da Indústria da Construção (Brazilian Chamber for the Construction Industry) – CBIC, indicated that the main issue faced by large companies in the third quarter of 2014 was the lack of demand combined with high taxation rate, lack of skilled labor and high interest rates.

This scenario suggests postponement of completion of projects, low variation in the vacancy rate and also to further negotiations between owners and tenants, with prices being adjusted in office leases.

The Market Beat Office, a market research carried out by C&W in the main Brazilian capitals shows that the volume of leased offices in the third quarter was 102 thousand square meters, 64% in higher quality buildings. The new points were chosen by companies in the industrial & financial sector with foreign capital origin, confirming that the market still has growth potential.

In São Paulo, most areas showed negative variations for the suggested price of lease: the Itaim region had the largest decrease (from R$124.3/m2/month to R$108.9/m2/month) and the Paulista Av. region, the smallest (from R$124.1/m2/month to R$120/m2/month). The vacancy rate was 15.6% — 0.83% smaller than the second quarter

In Rio, the capital, with the exception of the Orla region, the market had an average drop of prices for lease in all areas. In the Port Zone the variation was the smallest (from R$123.7/m²/month to R$122/m²/month) and in Cidade Nova, the highest (from R$100/m²/month to R$88.8/m²/month), attracting major new occupants for buildings deemed to be of high quality. The vacancy rate increased from 11.6% in the second quarter to 13% in the third — such a boost might be connected to the offering of 59 thousand m2 offices at the Port and Cidade Nova regions.

“This scenario is favorable for those tenants who seek a technically better and more modern space”, states Thierry Botto, General Manager of Agency Leasing in Rio de Janeiro.