MercoPress. South Atlantic News Agency

Luxury office construction boom in Santiago de Chile

A new buliding in Huechuraba area

The construction of luxury offices in the capital of Chile, Santiago has risen to its highest level in seven years, according to a study by the consultant group Mackenzie Hill.

The study found that the city will build more than 187,000 square meters of "category A" offices this year. These offices have the highest standards for security, architecture, and working conditions in Santiago. The company said 41% of the offices will be built in Las Condes, 22.6% in downtown Santiago, and 18.5% in Huechuraba. The last time luxury construction levels were this high was in 2000, when the total production of luxury offices in the capital reached 191,000 square meters. The predicted construction of such structures in 2007 will exceed 2006 levels by 105%. The majority of these projects– 125,000 square meters – is expected to occur in the second half of this year when weather conditions improve. The plans for 2007 "reflect a clear reactivation of the market and represent a break from the abrupt descent of luxury office construction in 2005 and 2006" said Mackenzie Hill. The construction increase of these offices however, compounds Santiago's spatial problems. The office vacancy rates in the city fell to 0.7% in 2007, "the lowest in our history," indicated Mackenzie Hill. This number has fallen drastically from 2005 (3.9% vacancy) and 2006 figures (1.07% vacancy). The normal vacancy rate for the local market should be around 3%. As a result, luxury office construction levels are expected to drop in 2008 to slightly below 110,000 squared meters. The consulting company predicts office construction to be slow until 2010 when Santiago is expected to build 150,000 squared meters of new luxury offices predominantly in Las Condes. The Santiago Times