Trends in the Costa Rican Real Estate Market for 2024

It is anticipated that Costa Rica would have a significant space requirement by 2024, for both industrial and logistical purposes.

1) Industrial sector:
Grecia is the most dynamic region, with 12 of the 56 new Foreign Direct Investment (FDI) projects launched in the nation in 2023 being situated outside the Great Metropolitan Area (GAM).

More than 21,300 new employment were created by IED as of October 2023, with more than 1,500 of those positions being developed in areas outside of the GAM.

The industry ended 2023 with expansion and strong demand in key areas of industrial operations, including advanced manufacturing, technology, and life sciences; additionally, logistics and operations, encompassing local and regional storage and distribution, were also highly sought after.

At the demand level, net and gross absorption exceeded 200,000 m2 and 300,000 m2, respectively, in 2023, setting records. The availability rate decreased steadily as a result of the aforementioned factors, going from about 8% in 2020 to 4.5% currently.

It is anticipated that Costa Rica would have a significant space requirement by 2024, for both industrial and logistical purposes. The promotion of foreign direct investment (FDI) outside the GAM will persist, generating hundreds of new jobs in dynamic regions like Grecia. Given the high levels of pre-placement, the estimated delivery of 120,000 m2 of new inventory now under construction is not anticipated to considerably boost the availability rate.

In 2023, Cushman & Wakefield | AB Advisory invested a total of more than $185 million in over 30 industrial transactions.

These include the following: Shockwave Medical (300 jobs), Inari Medical (900 jobs), Boston Scientific (1.200 jobs), and Johnson & Johnson (3,000 jobs).

Transactions involving a few local businesses, like La Guaca, Ekono, and Grupo Vargas, are noteworthy.

2) Commercial sector (retail):
The increase in domestic consumption that closed 2023, boosted demand in this sector, resulting in a decrease in availability rates and a rise in prices. In the GAM sub-markets, more than 31,000 m2 of commercial space in a variety of types are now being built. The significant pre-placement percentage of over 75% in this under-construction inventory indicates that there is a demand for these rooms.

The vacation rate trended lower as it closed. The availability rate was 8.6% as a result, which was the lowest in the previous 19 quarters.

The Capital Markets & Retail team at Cushman & Wakefield | AB Advisory was involved in investment deals valued at more than $10 million, primarily from businesses looking to expand and real estate portfolios that were repositioned toward appropriate population centers.

Highlights the successful performance of free-standing areas, nearby or local shopping centers, and regional centers; this trend is anticipated to continue in 2024.

It is anticipated that by 2024, the availability rate will continue to decline, which would lead to an increase in average costs.

3) Office sector:
In 2023, the 19.5% record high vacancy rate will come to an end.

The average list price, which stayed constant at $18.70/m for the entire year, is indicative of this variable’s continued stabilization, despite its high value. This reflects the owners’ general willingness to engage in negotiations.

AB Advisory and Cushman & Wakefield have been involved in over 35 office transactions totaling over $125 million in capital. They emphasized regions like West San Jose and Heredia, which confirmed that businesses use physical offices as part of their workplace initiatives to foster participation, cooperation, and corporate culture.

In the office market, what will be typical are flexibility and the desire for reinvention, coupled with steady pricing and even negotiable owners. In the field for 2024, evolution and reconversion are the buzzwords.

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