LATAM Office Market Regains Momentum as Rents Rise, JLL Reports

After several years of contraction, Latin America’s office real estate market is showing renewed momentum, driven by a sharp rebound in occupied space and rising demand for higher-quality buildings, according to a new report from global real estate consultancy JLL.

Between the 2H2024 and 1H2025, occupied office space across the region increased 43% year over year, marking one of the strongest recoveries since the COVID-19 pandemic, the firm said.

“The corporate office market in Latin America has turned the page and now presents an optimistic outlook looking ahead,” JLL noted in the report.

The rebound signals a shift in the sector’s narrative. Rather than focusing on whether employees are returning to offices, the discussion has moved toward how workspaces must adapt to hybrid work models that now dominate the labor environment.

“Offices have regained their prominence, as reflected in market indicators. The next step is a leap in quality to meet the needs of companies and their employees,” said Guido Mosin, JLL’s director of Research for Greater Latin America.

Limited New Supply Raises Concerns

Despite the recovery in demand, JLL warned of a slowdown in the development of new corporate office projects across the region, a trend that could place pressure on the market if demand continues to rise.

In 2025, Latin America’s office inventory expanded by 3.7%. If currently planned projects are completed, inventory growth would reach 4.2% in 2026 but fall sharply to just 0.7% in 2027, underscoring a weaker pipeline of new buildings in the medium term.

Nearly one-quarter of all office space in Latin America is currently located in Mexico City. When combined with São Paulo and Santiago, the three markets account for 50% of the region’s total office supply, reinforcing their role as strategic hubs for both domestic and international companies.

Office Rents Vary Widely Across the Region

JLL’s analysis shows significant differences in rental prices among Latin American office markets.

Montevideo stands out as the most expensive market for Class A office space, with average rents of US$34.4 per square meter per month. JLL attributed these higher values largely to Uruguay’s free trade zone regime, where rental rates often exceed those seen elsewhere in the region.

At the other end of the spectrum, Rio de Janeiro recorded the lowest average rents, at US$13.9 per square meter per month by the end of 2025.

Mexico City ranked third among the most expensive markets, with average monthly rents of US$24.4 per square meter. JLL said a growing number of international companies are evaluating Mexico as a potential operational hub, boosting demand for large, modern office spaces in newly developed buildings.

While a substantial amount of office space remains available in the Mexican capital, relatively few properties meet the requirements of these companies. Mexico City currently has 324,253 square meters of office space under construction, scheduled for delivery between 2025 and 2026. Of that total, 31% has already been leased.

Mexico City Office Market Rises 39% in 2025

CBRE released its Mexico City Office MarketView for 4Q25, outlining a market that is recovering gradually but steadily after several years of elevated availability. By year-end, Mexico City’s Class A/A+ office inventory stood at 7.4 million m², up 0.6% year on year, as limited new deliveries kept overall supply growth contained, reported MBN. 

During 2025, the market added 44,000m² of new Class A/A+ space, concentrated mainly in Insurgentes, Polanco, and Reforma. Development activity closed the year with 246,000m² under construction across seven active projects, with expected deliveries between 2026 and 2028.

For 2026, CBRE anticipates 213,000m² of new supply, largely concentrated in Insurgentes, Reforma, Polanco, and Lomas Palmas. The pipeline is already partially de-risked, with 40% pre-leased, and about 60% of the space under development concentrated in the CBD submarkets.

Mexico City’s vacancy rate ended 4Q25 at 17.6%, down 2.9 percentage points versus the same period of 2024. Total occupied office space reached 6.1 million m², signaling an improvement in market absorption.

Performance was strongest in the Central Business District (CBD), made up of Lomas Palmas, Polanco, and Reforma. The CBD closed 2025 with 11.7% vacancy, improving from 14.8% in 4Q24, and reached 2.7 million m² occupied. The district captured 62% of total transactions, reinforcing its position as the preferred destination for major occupiers. Polanco represented 26% of deals, strongly supported by Technology & IT activity. Reforma was the leading destination for Corporate Services, while Insurgentes absorbed a significant share of financial-sector transactions.

CBRE also notes that larger contiguous blocks of more than 9,000m² are available across Santa Fe, Polanco, Reforma, Insurgentes, Bosques, and Azcapotzalco, offering options for large occupiers looking to consolidate or relocate.