The corporate office market in Costa Rica increased by 59,941 square meters (m2) reaching 1,446,890 m2. In this way, Costa Rica becomes the second largest office market in Central America -after Panama- and ranks #11 in Latin America.
Heredia, Escazú and San José in full growth
According to Rodrigo Torres, from JLL Costa Rica: “During 2022, a total of 59,932 m2 of new inventory entered the market; with the majority (45,239 m2) entering during the first half of the year. The new inventory consisted of 4 new projects and one additional office building on an existing project. The Heredia sub-market added most of the new inventory, with 65%, followed by Escazú with 27% and the San José sub-market with 19%”.
Production in 2022 was slightly above the average of the last 5 years, and production is expected to remain strong in 2023, with approximately 79,000 m2 of new inventory. Notable transactions in 2022 included WeWork, Equifax, Arias Law, and BCG. Most of the demand came from new leases on existing buildings, with pre-leases on new projects accounting for only 17% of all total production.
Santa Ana maintains a high offer of vacancies
The vacancy rate in the market increased marginally to 17%, with the Santa Ana sub-market having the highest vacancy rate of 25%, and the Escazú sub-market the lowest vacancy rate of 10%.
Class A inventory in the Escazú sub-market had the lowest vacancy rate (5%), making it a highly sought after location with limited supply. JLL expects net absorption to remain positive, but observed and projected high production levels may lead to further increases in vacancy rates, which could remain high for several years.
According to Torres, “rental rates for commercial properties in 2022 have stabilized with little fluctuation in the second half of the year. Market rental rates for commercial properties ranged from US$10 m2 per month to US$24 m2 per month. Prices were generally stable but showed some signs of deflation as new inventory entered the market and vacancies increased. In 2022, some speculative projects have found it difficult to rent their spaces, leading to reduced rental rates for quality space”.
