World Trade Centers Association, Together With Latin Trade, Publishes First Official WTC Prime Office Index LatAm for 2020/2021
NEW YORK, NY (December 21, 2020) – The World Trade Centers Association (WTCA), in partnership with business publication Latin Trade , unveiled its first WTC Prime Office Index LatAm 2020/2021. The index measures the recent and expected performance of sales and leases of premium office space in the Latin American. Moreover, on-the-ground insights from interviews with WTCA members around the region reveal that while the COVID-19 pandemic has brought about substantial changes in the real estate sector, a recovery is expected in 2021.
“The COVID-19 global pandemic has brought about economic uncertainty and forced businesses to react quickly to new realities in the short and long term,” stated Carlos Ronderos, Latin America Regional Director of the WTCA. “The WTC Prime Office Index LatAm 2020/2021 highlights that the premium office real estate market will become stronger along with the post-COVID-19 business ecosystem, and offers a new tool for businesses throughout the region to measure recent and future market performance. We believe 2021 will be a period of stability compared to the volatile 2020 and markets will be able to reach pre-COVID-19 levels by 2022.”
The WTC Prime Office Index LatAm 2020/2021 was built with insights from the WTCA’s Latin American members across 18 large, medium and small cities including Buenos Aires (Argentina); Santa Cruz de la Sierra (Bolivia); Curitiba and São Paulo (Brazil); Santiago de Chile (Chile); Barranquilla, Bogotá and Cali (Colombia); San Salvador (El Salvador); León, Mexico City, Monterrey, and Nuevo Laredo (Mexico); Panama City (Panama); Montevideo and Colonia del Sacramento (Uruguay) and Valencia (Venezuela). Overall, the WTCA’s Latin American experts reported they are more optimistic about sales than rentals for 2021. The sales expectations index shows a measurement of 1.85 in sales while that of rentals remain negative at 1.39. The negative expectations are accompanied by a positive balance of expectations in terms of stability in sales prices and time taken to close a deal. No increases in sale and rental prices are expected in 2021, therefore signifying that properties will not lose value as in previous economic crises. Further, there are some additional, favorable conditions for buyers as interest rates will be historically low, countries will maintain extraordinary public spending policies in 2021 and large areas per worker will be required.
“Landlords will have to maintain some of the business strategies applied during the worst of the pandemic,” said Robin van Puyenbroeck, Executive Director-Business Development of the WTCA. “There is a need to continue to be innovative and flexible to weather the storm and adapt to the ever-changing market in order to close new deals. However, cities around Latin America, especially those where a World Trade Center is present, are well positioned to act as centers for economic stability in the region.”
The WTC Prime Office Index LatAm concludes that, despite the fact that a recovery of GDP is projected in the vast majority of countries in the region, ultimately, the business climate for the office market will be determined by factors specific to each country and city in terms of their political and socio-economic status following the pandemic. For example, experts expect an increase in supply of Class A offices in cities such as Lima, Monterrey, Mexico City and, to a lesser extent, Bogotá and São Paulo, for 2021 to 2023, where there will be pressure against rentals in terms of prices and vacancy rates.
"The WTC experts said that the office will not disappear in the post-pandemic world. It will be part of a new business ecosystem in which it will coexist with telecommuting and other modalities such as coworking," said David RamĂrez, Editor of Latin Trade. "Telework, possibly, is here to stay, but, towards the medium and long term, it is very likely that it will tend to decrease in relevance, and in no case will it replace the office," he concluded.
The full index, including commentary from WTCA LatAm Members, is available for download here.
MEDIA CONTACT:
World Trade Centers Association (WTCA)
Chanelle Kasik
Phone: +1 212 432 2644
Email: ckasik@wtca.org
About World Trade Centers Association (WTCA)
The World Trade Centers Association (WTCA) is a network of more than 320 highly connected, mutually supporting businesses and organizations in nearly 100 countries. As the owner of the “World Trade Center” and “WTC” trademarks, the WTCA licenses exclusive rights to these brands for Members to use in conjunction with their independently-owned, iconic properties, facilities and trade services offerings. Through a robust portfolio of events, programming and resources that it offers its Members, the goal of the WTCA is to help local economies thrive by encouraging and facilitating trade and investment across the globe through Member engagement. To learn more visit www.wtca.org.