The Costa Rican real estate market is undergoing a series of changes due to the increase in Foreign Direct Investment (FDI), as highlighted in a report prepared by Cushman & Wakefield titled “Real Estate Outlook 2025-2026: A Market in Transformation.” The report reveals promising and dynamic scenarios for the Costa Rican real estate sector.
Transformation, promising, and dynamic are key aspects of this report and words that investors like to hear.
Are there any positive aspects to this transformation?
According to data from the Central Bank of Costa Rica, PROCOMER, and CINDE, during 2023, a record figure of nearly $4 billion in Foreign Direct Investment (FDI) flows was reached, representing a 23% growth compared to 2022.
How does this $4 billion increase in FDI affect the Costa Rican Real Estate Market?
The growth in FDI has resulted in the creation of new projects and reinvestments in Costa Rica. Specifically, we are talking about 34 new investment projects and 81 reinvestment projects by companies in sectors such as life sciences, advanced manufacturing, corporate services, and high technology. All of these companies need space.
How does remote work influence the demand for corporate offices?
According to the Cushman & Wakefield Report and the Chamber of Corporate Services of High Technology (CamSCAT), 74% of multinationals are working on the basis of some hybrid model that combines in-person work with remote work.
Despite this data, the availability of office space is increasingly limited. This is because changing demand trends have transformed companies’ office requirements, focusing more on location and the quality of spaces.
Over the past 30 months, more than 150,000 m2 of new office inventory has been delivered, and slightly more than 37,000 m2 is currently under construction, to be delivered in the next 12 months.
This means that things are changing a lot in the corporate office sector. Companies are looking for flexible and open spaces, places where people can collaborate and meet. Current offices are moving away from those spaces separated by small cubicles where people spent most of their time for 5 days a week.
What is the outlook for Real Estate in the industrial sector?
The availability rate of spaces for the industrial sector in 2024 is low, reaching only 3.5% availability. In some sectors of the country, availability is as low as 2%. This indicates the intense demand for industrial spaces and the accelerated growth of industrial activities in Costa Rica.
In this competitive market, companies that want to secure industrial spaces in Costa Rica will need to move quickly and have a plan. We may be facing a bidding war scenario, which could drive up rental costs. We can even anticipate that some companies will rent spaces even if they are not perfect for them.
What is the outlook for Real Estate in the Commercial sector?
Some of the challenges that developers and owners of commercial spaces have had to face have been, on the one hand, recovering from the aftermath of the pandemic and, on the other hand, fighting against the effects of online shopping.
That is why, in Costa Rica, owners and developers of commercial spaces have prioritized the creation of memorable experiences, strategic locations, and strategic commercial mixes according to each target market.
For this reason, the transformation of commercial spaces will lean towards smaller stores aimed at a specific audience. It is likely that large department stores will have to reinvent themselves and offer unique experiences to their shoppers.
The Commercial Real Estate market aims to create meeting and entertainment spaces, places that motivate the buyer to leave the comfort of their home and find unique and special experiences.
