Open-air commercial corridors in Argentina have played a significant role in the retail market, in recent times.
We have tired of hearing: "Retail sales (statistically more than 75 or 80%) occur on the street", that is, in premises located on streets and avenues. On the other hand, in other countries such as Chile, Brazil or Mexico, sales in shopping malls reach 50 to 60% of total retail sales.
Due to the strong European culture impregnated in the Argentine consumer, commercial corridors present an important degree of concentration. In 4 or 5 blocks you can find the most important brands and variety of items naturally forming a tenant mix that would be the envy of a shopping manager.
There are also areas that became references of themes where you can buy products of a single item, for example.
This situation occurs not only in the 6 cities of more than 600,000 inhabitants that Argentina has, but in all those that exceed 40,000 inhabitants. In each provincial capital or departmental capital of a suburban district, these corridors also become main pedestrian corridors, generating a greater flow of pedestrians.
Some, as in the case of Córdoba Capital, with more than 3 or 4 pedestrian in its microcentro. San Juan, Rosario, Salta, Tucumán, Resistencia, Corrientes and in GBA Lomas de Zamora, Monte Grande, Quilmes, Martínez, among others, are concrete examples of this phenomenon.
In order to understand the importance of this trend, in the Federal Capital there are currently 32 commercial corridors with more than 15,000 stores (latest measurement of the Government of the City of Buenos Aires). This figure is higher than the stock of stores within the shopping malls. The Florida pedestrian corridor, along its 12 blocks, has a total of 308 stores.
But in recent decades, open-air commercial corridors in CABA have been transformed, added to the impact of the pandemic and the growth of digital sales, as well as the emergence of new items.
In the 90s, Florida was the most important commercial broker in sales volumes and therefore in value / m2 / month of rent above US $ 100, being the most expensive in Latin America, above Oscar Freire in São Paulo, Pdte. Masaryk in Mexico City and Jirón de la Unión in Lima.
The successive crises suffered by the country and the recent pandemic strongly impacted this market segment. In recent years, the great pedestrian of the port city fell positions not only in sales volume but also in rental values.
Today it no longer competes with the brokers of Latin America and has been in third position – in terms of rental values – in the Capital, behind the commercial corridor of Acoyte and Rivadavia, and that of Cabildo and Juramento, in the Buenos Aires neighborhood of Belgrano.
In the vacancy charts that are part of this note we can see the erratic behavior of the Florida vacancy compared to the Cabildo and Oath corridor. And as during the economic crises and the pandemic, the vacancy curve skyrocketed compared to the other corridor.
On the other hand, a few years ago, Santa Fe and Callao, another ABC1 corridor par excellence, has been surpassed in locative values and vacancy by Santa Fe and Pueyrredón. We are also noticing an interesting growth of the Coronel Díaz and Santa Fe corridor. Here the sale to the street is enhanced with those of the Alto Palermo shopping mall.
Another highlight is the size of the premises required. The searches are in the order of 200/300 m2 compared to the pre-pandemic stage, when they were around 400/500 m2.
Currently, and as part of the increase in commercial activity, we are observing a decrease in vacancy in all corridors in general. Important street corners that were empty have gone off the market and rent increases above inflation are already occurring.
Florida has joined the process more slowly. We are left with an interesting question to answer: Will Florida return to the splendor of previous decades?
We think so, but this will depend on Argentina's economic evolution in general terms; the transformation process of the Buenos Aires microcenter, taking into account the GCBA project to encourage a mixed area of offices and housing that is already advancing; and the continuity of the flow of tourists, the main driver today of the moderate recovery of this corridor.
* Marcelo Zuliani is director of Colliers
