News
Mid Year 2010 Costa Rica Real Estate Report
Source: NAI Costa Rica
Tuesday, August 31, 2010
At Mid-Year 2010 the Costa Rican market is recuperating well. The office market is showing a steady recovery although the overall vacancy rate is 10.6%.
The office market is showing a steady recovery although the overall vacancy rate is 10.6%. It rose that high due largely to blocks of space becoming available in the highest prestige complexes. Given that it is highly desirable space, it should be absorbed in a short period of time – within 6 to 9 months. Approximately 75,000 m2 of 2010 and 2011 inventory are under construction and should finish within the next 10 months. Prices should continue stable for at least two more quarters; no softening of lease rates is foreseen when buildings currently under construction come on line. Demand should keep pace.
The industrial market experienced a strong recovery; its crisis gradually dissipating and free zones, warehouses and office warehouses have vacancy rates below 5%. Investment projects under construction or about to start are more active. At least 5 new office/warehouse projects entered the market since January. This further good news shows the banks renewed interest to provide credit for new projects with more accessible terms and conditions.
The retail market still experiences strong, steady demand. Multiplaza Escazú’s latest stage generated enormous pre-leasing and demand has remained strong. In malls, occupancy and pricing have remained stable. In strip and neighborhood centers occupancy has decreased slightly. Their tenants were more susceptible to the slowed economy; different retailers have closed or changed for less expensive sites. Prices therein are gradually increasing to previous levels. New projects continue, especially within the eastern portion of San Jose.
The industrial and office property market could expect a significant recovery by the end of 2010, returning to normal behavior where the completion of inventory goes hand in hand with economic growth.