Lease renewals drive firms to cheaper districts as prime office costs surge
Office lease contracts signed during the pandemic are now coming up for renewal, triggering a wave of relocations as companies seek better cost-effective alternatives.
Vacancy rates in São Paulo, which reached 23% in prime office buildings in 2021, fell to 13.9% by the end of 2025 and are expected to continue declining, albeit gradually. As a result, asking rents in the most competitive areas have been rising.
On Faria Lima—São Paulo’s premier office corridor—average asking rents reached R$280.90 per square meter at the end of 2025, an increase of 49.6% compared with 2020 and 81% over 2022, according to real estate consultancy Binswanger Brazil.
“The strategy was to lease at attractive prices years ago, already anticipating renewals,” said Melissa Spinelli, director of transactions and real estate business at Binswanger. “Prices were appealing, so companies could secure space on Faria Lima at levels that are no longer feasible today.”
However, with contract renewals, staying in the same location has become unviable for many tenants. “We see this frequently—companies saying that if they cannot reach a certain price in renegotiation, they will leave,” she said.
For companies that need to maintain a presence in the area, one solution has been to split operations, keeping part of their footprint in Faria Lima while relocating other functions to districts with higher vacancy and lower costs. Unlike Faria Lima, which ended last year with just 6.8% vacancy, other areas still offer significant availability.
XP, for example, leased 17,000 square meters in Chácara Santo Antônio while returning 4,500 square meters in Faria Lima, although it has not exited the area entirely. Verisure gave back 1,600 square meters in the São Luiz building, in the Juscelino Kubitschek avenue region, another prime location, and leased 7,000 square meters in Parque da Cidade, a complex also located in Chácara Santo Antônio.
According to Spinelli, the return to in-person work has increased demand for office space, but not necessarily in the most expensive locations. “Companies that need to be in these areas stay, while the others move to lower-cost regions, often in newer and higher-quality buildings,” she said.
Districts such as Chácara Santo Antônio are emerging as expansion hubs for office supply in São Paulo, with new high-end buildings still seeking tenants. Vacancy in the area stood at 32% at the end of 2025, with average asking rents of R$62 per square meter.
Another trend identified by Binswanger is companies opting for smaller buildings shared with fewer or no other tenants, allowing for greater customization. Amazon, for instance, is set to leave the Juscelino Kubitschek avenue area for a standalone building in Pinheiros. Netflix, earlier this year, moved from Alphaville to a low-rise building on Rebouças Avenue.
As explained by Paulo Izuka, head of projects at Landsight, Binswanger Brazil’s market intelligence arm, such moves toward areas like Pinheiros, Marginal Oeste, and Jardins reflect companies seeking “prime” locations at more affordable prices than those around Faria Lima.
Casas Bahia also relocated last year, moving from the Eldorado Business Tower to a property on Marginal Pinheiros, near the Berrini district, where it also opened a concept store.
This type of movement has become more common as the market offers a wider range of office options at different price points, including in areas not traditionally seen as corporate hubs, such as Rebouças and Pinheiros. “There is a growing opportunity in other regions,” Izuka said.
Despite this shift, Faria Lima remains highly attractive and is still considered a near-mandatory address for companies in finance, technology, and legal services. However, Spinelli sees a cap for further rent increases in the area. “Prices are already very high—there is a limit. Companies cannot pay any price, with few exceptions,” she said, although she does not expect rents to decline.
*By Ana Luiza Tieghi, Valor — São Paulo
Source: Valor International
https://valorinternational.globo.com/