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Brazil Warehouse Rental Trends

Several factors are driving the increased demand for warehouse rentals in Brazil. These factors include growth in the online retail segment, increased price of commercial leases in Sao Paulo, and opportunities for local players. In this article, we’ll examine these trends to see where the country stands now. In addition, we’ll discuss the growth in the asking price of commercial leases in the city. And we’ll review some trends that will help you decide which properties to rent in Brazil.

Growth of online retail segments

The logistics market in Brazil will continue to grow through 2022, driven by the continued expansion of online retail segments. The demand for warehouse rentals will drive further expansion in cities where purchasing power is higher, such as Sao Paulo and Rio de Janeiro. The logistics companies’ main goal remains to provide products and services to consumers at the lowest cost possible, and they must improve their relationships with marketplace sellers in order to keep up with demand. The professional sellers of these marketplaces need to store their goods in their platforms to ensure a faster delivery time.

The government’s recent major sporting events have significantly impacted Brazil’s economic development. While Brazil’s legal framework is fairly straightforward, social factors could impact inflow of investment. The country received US$540 billion in foreign direct investment last year. Online retailers need warehouse space to store their products and deliver them to customers. Furthermore, the country’s legal environment can facilitate foreign investment. While Brazil is a stable and relatively stable country, it faces challenges in the hospitality and online retail segment.

Amazon, for example, has an online presence in Brazil but relies on third-party shipping companies to fulfill orders. Amazon did not respond to questions about whether or not the company would lease a warehouse to facilitate shipping and logistics. Amazon has also recently increased its presence in the country, focusing on e-commerce, which accounts for 5 percent of the country’s $300 billion retail market. It has expanded its business from books to electronics, and is preparing to compete with homegrown rivals such as Mercado Libre and B2w Cia Digital, both controlled by private equity group 3G Capital.

Increase in asking price of commercial leases in Sao Paulo

According to GTIS, the increasing vacancy rate in the office market in Sao Paulo is caused by a slowdown in new office construction. Vacancy rates in the city are expected to rise to a three-year high in the fourth quarter, with the remaining years of the year experiencing a slowdown. Meanwhile, the asking price for office space in the city remains flat. This is despite the fact that more supply is on the way. The slowdown should continue into next year, though.

The pandemic has impacted the office market in a negative way. Many companies have moved out of their offices, in violation of the lease agreement, while others have opted to wait until the contract expires to leave. In the meantime, they are not planning to renew their lease. While the consultancy doesn’t confirm whether prices are increasing, it does indicate that more office space is coming on the market. Meanwhile, the vacancy rate has also increased, from 14 percent in December to 21% in March this year.

Moreover, according to the latest report by SiiLA Brazil, the office space market in Sao Paulo is crumbling. Corporate firms such as Oracle and regional carrier LATAM have recently relocated, with a drastic increase in vacancy rates in the past 13 years. Tight travel restrictions have also caused many companies to move out of the city, which led to a sharp increase in rents.