With the pandemic and remote work, real estate developers and investors stopped opting for office projects due to uncertainty over whether companies would ever return to in-person work. But from 2022 onward, the vacancy rate for premium offices, which had reached nearly 12%, began to fall steadily, closing the third quarter at 7.8%, according to CBRE data. The main problem is that strong demand is depleting the few available spaces, and the pipeline of projects that will soon enter the market is limited. "We are seeing demand that continues to absorb space, while supply has much longer reaction times. The challenge lies not only in the projects currently under construction, but in what comes after. With a reduced pipeline, companies that need large spaces will have to anticipate their real estate decisions more and more," explained CBRE senior research manager Ingrid Hartmann. The real estate consultancy points out that "if the current pace of demand continues without significant activation of new projects, the reduction in availability could limit the options of companies seeking large spaces in a single location, particularly in Santiago's main corporate hubs." Today there are only 3 projects or parts of projects pending: Costanera Center, Parque Arauco Oficinas, and Nativo Riesco. The three together total 100,789 m2 that will be added to the market, specifically in Las Condes, a market where vacancy continued to decline during the quarter and closed at 4.72%. Cencosud's iconic skyscraper, Costanera Center, has its final 22,000 m2 pending municipal approval, which depends on various mitigation works the company is carrying out. The addition of this space is estimated for 2027, according to CBRE, but still without a definitive date. In Nueva Las Condes, there is the new office tower at the Parque Arauco Kennedy mall, located at the corner of Cerro Colorado and Rosario Norte. These will add 23,500 m2, and their incorporation into the market is projected for the first quarter of 2027. Added to these is Nativo Riesco, a two-tower project that will incorporate nearly 55,000 m2 at Presidente Riesco with Urano, with delivery estimated between late 2028 and early 2029. "Added to this is that, beyond the developments currently underway, there are only two approved building permits for Class A offices that have not yet begun construction. Between 2025 and 2028, the Class A office inventory would grow by only 9% compared to the current stock, well below the expansion cycle recorded between 2010 and 2014, when the inventory increased by 64%," CBRE explains. Not only is the available space shrinking, but it is also distributed across different buildings and submarkets, creating a shortage of large spaces. The reduction in availability is particularly pronounced in the areas where demand is concentrated. In Nueva Las Condes, vacancy reached 3.44%, while in El Golf it fell to 4.29%. The consultancy warns that "demand continues to favor the eastern sector and large spaces are beginning to become scarce. Las Condes alone accumulated nearly 50,000 m² of net absorption over the past year, while the Class A market totals 62,000 m² over the last four quarters. During the third quarter, moreover, nearly 29,000 m² of new leases were signed in 46 contracts, eight of them for spaces close to or exceeding 1,000 m2," CBRE detailed. NEWSLETTER Pulso PM Monday to Friday, 12:30 PM The most relevant news on markets, companies and business: timely information, context and content to make better decisions. By subscribing you are accepting the Terms and Conditions and Privacy Policies of La Tercera.