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The province of Buenos Aires, which includes Greater Buenos Aires, is Argentina's largest. It's contribution to the national GDP stands at 35.0%. Given the growth forecast relative to the current supply and the positive forecasts, the prognosis for the office market in the near-term is fair.
Buenos Aires is the primary office market in Argentina. Currently, the metropolitan office market consists of over 2.5 million square metres of space quoting prime rents of U.S.$ 34.00 per square metre per month. Asset prices for prime space now average U.S.$ 2,650 per square metre, resulting in an overall yield of 15.4 percent. Over the past few years, the office market has been stable, with stronglevels of demand pushing asset prices to a high of U.S.$ 2,700 per square metre in 1998. In 1999, demand for space weakened, stopping asset value growth asdevelopment continued at a strong pace.
Market Composition
The Buenos Aires office Market is composed of four sub-markets, with a totalinventory of 3,502,417 square metres (37,699,666 square feet) of net useable area. Of the 3,502,417 square feet of office space in Buenos Aires, only 36.3% fall into the Class "A" category (prime quality), and the vacancy rate for this type is approximately 7.7%. There are currently 307,218 square metres under construction in the Buenos Aires office market. The majority of the construction is taking place in the areas of Midtown and Northern Area. The space take-up in the Buenos Aires office market was approximately 155,000 square metres during 1999. This represents an increase of 6.0% compared to 1998, when there were 145,136 square metres taken. This year's take-up is projected to be higher, over 165,000 square metres.
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