QCOSTARICA — The absolute dominance of teleworking in Costa Rica has been mitigated by companies’ interest in migrating to larger, more versatile office spaces. Firms recognize the value of physical spaces that foster collaboration, creativity, and well-being, trying to find an optimal balance between remote work and in-person interaction.
This is stated by the Market Research team of Newmark Central America, a leading commercial real estate consultancy in the region, after registering, during the first three quarters of 2024, significant movements of moves to more efficient spaces located in higher-category buildings.
This trend is driven by attractive rental prices and the growing interest of owners in occupying new construction and second-generation spaces. In fact, by the end of the third quarter of 2024, the office market inventory reached 2,595,076 square meters (m2) of total leasable area, thanks to a continuous increase registered for a year.
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“This phenomenon marks a substantial change in market dynamics, moving away from conservative strategies towards a revaluation of traditional workspace, balanced with modern demands for efficiency and quality,” explains Danny Quirós, director of Market Research for Newmark Central America.
Newmark warns that despite continued growth in inventory, the availability rate has remained relatively stable, suggesting that demand, while still growing, is not outstripping the influx of new supply. This reflects a fragile balance in which despite the growing absorption of spaces, the market is not managing to consistently reduce availability levels.
The best of both worlds
According to Newmark, corporations are discovering that a hybrid model, which adequately balances in-person and teleworking, could be achieved in versatile spaces designed to adapt to both collective interaction and individual needs.
This transition to more spacious and flexible offices suggests an effort by companies to shape a work environment that effectively meets the needs of their ever-evolving workforce while preserving a robust corporate culture.
Newmark predicts that, following the adjustment of the first half of 2024, the trend toward the revaluation of tangible workspaces will continue. This evolution is expected to translate into a more extensive adoption of advanced technologies that facilitate an integrative and adjustable workspace, fostering an atmosphere of innovation and preparation to face upcoming challenges in a resilient manner.
Dynamic market
The notable increase in the supply of offices in Costa Rica is attributed to the completion of previously postponed construction projects and the interest by companies in office spaces, both phenomena fostered by a stabilizing economy and an increase in business confidence.
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“The completion of these projects has not only increased the availability of modern and efficient office spaces, but has also fueled a more dynamic market that is receptive to new work trends,” explains the Newmark report.
In this new context, the demand for offices that facilitate hybrid, sustainable work focused on employee well-being is stronger than ever. With a greater emphasis on the quality of the work environment and integrated services, companies now consider office space as an extension of their culture and values.
On the other hand, notable fluctuations in absorption levels during the year indicate a certain volatility in demand, which continues to complicate strategic planning for developers and owners in their commercial proposals, especially for new properties.
Finally, the increase in rental prices and maintenance fees, which although has been conservative, continues to represent a challenge to attract new tenants. This is especially complicated in a still user-friendly environment during negotiation, where second-generation spaces still have a significant advantage in terms of lease rates and delivery conditions.
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Potential tenants may opt for these cheaper and more flexible spaces, putting new property owners in a challenging position to justify their higher prices and secure leases.
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