Palermo Retail Scene: High Vacancy Meets International Brand Arrivals

Palermo, a key commercial district in Buenos Aires, presents a dual reality: while some of its main commercial avenues grapple with high vacancy rates and falling rental values, others are poised for revitalization with the arrival of major international brands. Santa Fe Avenue, a significant retail corridor, exemplifies this dichotomy.

An analysis reveals that the 1.6-kilometer stretch of Santa Fe Avenue between Scalabrini Ortiz and Pueyrredón experiences a vacancy rate of 6.67%, surpassing the city's general market average of 4.6%. Average asking rents in this area stand at US$29 per square meter, slightly below the city's overall average of US$30.4 per square meter. This situation marks a significant shift, as the area saw vacancy increase by 6.4% and rental values drop by 29 percentage points compared to 2025.

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We are in a moment where statistics say we are experiencing the lack of consumption from last year and this year is not recovering, and empty premises begin to appear. But at the same time there are news of international brands that are going to come and that generates competition between sectors. We are in a moment of rupture, I do not see that the vacancy will continue to increase.

This trend is attributed partly to property owners proactively seeking new tenants as existing contracts near expiration, aiming to avoid prolonged vacancies. However, experts suggest this might represent a market transition rather than a permanent decline. Marcelo Zuliani of Colliers notes that while the current lack of consumer spending is evident in rising vacancies, the impending arrival of international brands introduces competition and suggests a potential turning point.

Evidence of this potential shift is visible within the Alto Palermo shopping center, where the Swedish fast-fashion giant H&M is reportedly finalizing negotiations with IRSA, the mall's owner, for its debut store in Argentina. The arrival of H&M, alongside other planned commercial centers, indicates a dynamic retail landscape where challenges coexist with opportunities for growth and renewed consumer interest.

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Given the expectation of non-renewal of contracts by some tenants, many owners opt to anticipate and begin searching for new tenants before the properties become vacant, thus avoiding prolonged periods of vacancy.