Vila Olímpia and Avenida Berrini live ‘announced death’ with emptiness after pandemic

With the loosening of restrictive measures against the Covid pandemic, the city of São Paulo started to move again. In Pinheiros, bohemia returned to bars and streets. The joggers returned to Santana avenues, in the north zone. Jardins, Consolação and Vila Mariana were again busy in the shops and sidewalks were full of people. Parks also gained more life.

However, that was not what happened with Vila Olímpia and the region of the Engenheiro Luís Carlos Berrini and Chucri Zaidan avenues. Located in the southwestern region of the city, close to the Pinheiros waterfront, this territory populated by skyscrapers, the city’s main pocket of slab-type properties, widely used by the corporate universe, still seems empty, with a similar scenario to the middle of last year.

Vila Olímpia and the Berrini corridor are experiencing a more acute and difficult to reverse emptying, caused not only by the pandemic – and which becomes apparent in the dark floors after dark.

Before the state decrees of public calamity in the various spheres of public administration, experts already warned of this risk: the less diverse a region is, or the less it mixes commerce, offices and residences, the greater the chance of falling into decay.

Because the drop is being significant. Before the pandemic, it was difficult to walk the streets of these neighborhoods at lunchtime. Employees of companies that operate (or operated) in the region walked from their offices to the restaurants in large groups, closing the sidewalk. After work, the bars were packed, with the hottest happy hour in town. Today, even Fridays are warm.

In December 2019, the vacancy of corporate properties in Vila Olímpia was not high, corresponding to 10.5% of the total. In 2020, the index rose to 24.5%. And, at the end of last year, it reached the level of 29.4%. The higher the rate, the emptier the region. Data were provided by Secovi-SP.

“These types of urban regions that specialize in one activity are problematic. The place where there is a mix of activity is always more resilient”, says urban planner Vinicius Andrade, partner at the Andrade Morettin Arquitetos Associados office and vice-president of the Instituto de Brazilian architects.

When he observes the vacancy numbers of Vila Olímpia, he says it is “an announced death”. The urbanist says that, even before the pandemic, “there was no longer life at night in that region”. “Things got a lot worse with the pandemic, but it was born bad”, he says. “It is a consensus among urban planners that a territory occupied by a single activity, in this case that of services, is at greater risk of falling into decline.”

The other two major regions that concentrate corporate real estate in São Paulo are Avenida Paulista and the Jardins-Faria Lima axis, which are notable precisely for their greater mix of activities and between commercial and residential sectors. This profile was important to ensure the urban health of these regions during the pandemic period, says Cristian Baptista, director of the vice-presidency of Heritage Management and Lease at Secovi-SP. Baptista says that the number of residences in the Paulista region, for example, guaranteed the movement of pedestrians and also the life of the local merchant.

He also states that the service, technology and pharmaceutical sectors, notably more present in Vila Olímpia and Avenida Berrini, were the ones that most handed over the keys in recent years. Still, it maintains an optimistic view and predicts a recovery trend for 2022.

On Avenida Paulista, in December 2019, the vacancy rate for corporate properties was 10.7%. In the Jardins-Faria Lima axis, in the same period, this index was 6%. Paulista lost some occupancy, seeing its vacancy rate rise to 14.4% at the beginning of 2021 and then to 17% at the end of last year. The Jardins-Faria Lima axis started the year 2021 with about 12% vacancy, and had some recovery, with 9% at the end of the year, already close to pre-pandemic levels.

According to experts consulted by the sheet, customer flight was caused by the transformation of work relationships, with the incentive to work from home, and by social isolation measures. But also because of the burden of a contract model that provides for long lease terms in the case of the corporate real estate sector which, as Baptista recalls, “requires greater security and guarantees because of prices”.

Throughout the pandemic period, there was an effort on the part of owners to make these contracts more flexible, which in this sector are characterized by periods longer than the 30 months common in the residential sector, which can reach up to ten years. And even then, the occupancy fell.

This fall was reflected in the streets. The numbers of shipments at the Berrini and Vila Olímpia train stations, which irrigate the region, are expressive. In December 2019, there were 492,000 and 814,000 respectively.

In January 2021 they dropped to 140 thousand and 277 thousand. In December 2021, there was a resumption, and that number rose to 206 thousand and 412 thousand, but reaching only half of what was recorded before the pandemic.

By way of comparison, stations on Avenida Paulista recovered more than 60% of the movement that was recorded before the periods of restriction and isolation. The data are from the São Paulo Metro and CPTM transparency system.

In addition to empty streets, those who walk through the region see buildings with up to eight “for rent” signs on their facades. Restaurants, cafes and hairdressers have lowered their doors.

Parking lots have also lowered prices. The employee of one of them says that the daily cost was R$ 25 and had dropped to R$ 13. In early February, there were daily options of up to R$ 8, and even then the establishment’s capacity had not been reached.

“Vila Olímpia, in addition to specializing in an activity, has specialized in a social class, it is occupied by the elite. When the sector that occupies it goes into crisis, it becomes much more difficult to bring in new population”, evaluates Andrade.

In February, the Senate passed a bill that allows 2/3 of the tenants of a building to be sufficient to decide on changing the profile of the building. It would be a solution to this obstacle. The sector defends being able to transform fully corporate buildings into mixed ones. The PL goes to the Chamber of Deputies and, if approved, needs to be sanctioned by the Presidency.

Although it is a measure aimed at transforming the central regions of metropolises such as São Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre, which still face emptying problems mainly at night due to the absence of residential units, this same measure can represent a way of renewing the urbanism practiced in Vila Olímpia and in the Berrini region.

“Today, it is enough for the owner of a condominium to stop a project to retrofit the building, and many times even this owner is in favor of the project but has a pending inventory”, says Victor Carvalho Pinto, legal adviser to the Senate for urban issues. .