Telework, 2nd Covid-19 wave in Argentina prompt more office, store closures

By Veronica Dalto

Buenos Aires, May 19 (EFE).- The number of shuttered offices and commercial establishments in Argentina continued to rise in the first quarter of 2021 even though economic activity has picked up compared to several months ago, when strict stay-at-home orders were still in place to combat the Covid-19 pandemic.

The closures have increased due to prospects of more restrictions in the second year of the health emergency and uncertainty about the country’s economic situation.

In the main commercial areas of Buenos Aires, the total amount of vacant stores was up 65.6 percent in the year’s second bimester (March-April) relative to the first bimester of 2020, prior to the implementation of the first Covid-19 quarantine measures, according to the Argentine Chamber of Commerce and Services (CAC).

The increase compared to the first bimester of this year, after previous strict restrictions on mobility had been lifted, was a surprisingly high 26.2 percent.

Meanwhile, the vacancy rate for Class A (high category) offices climbed to 14.9 percent in the first quarter, around six percentage points above the pre-pandemic level and 15 percent higher than in the last quarter of 2020, when the country’s coronavirus restrictions had already been eased, according to leading global real-estate services firm Cushman & Wakefield (C&W).

“The first (factor) is the drop in activity and the new restrictions on mobility, and the second is the new consumer and company configuration because there’s a lot of telework,” the CAC’s chief economist, Matias Wilson, told Efe, referring to growth in e-commerce and in the movement of people through non-traditional spaces.

Owners of retail establishments persevered through the drop in business activity in 2020 (down 5.4 percent, according to the National Statistics and Census Institute), dipping into their savings to avoid shutting their doors.

While their businesses started to bounce back in the last quarter of the year and the start of 2021, the new restrictions coinciding with the second coronavirus wave – including an 8 pm to 6 am curfew – proved to be the final straw for many.

“The restrictions affect expectations. Many decided not to keep going,” Wilson added.

The hardest-hit area in the nation’s capital has been Buenos Aires’ “microcenter,” or financial district, which has suffered from a steep drop in tourist and office worker pedestrian traffic and is practically deserted after 6.30 pm.

On the emblematic Florida pedestrian street, the number of vacant establishments skyrocketed by 369.2 percent in the second bimester of 2021 compared to pre-pandemic levels and was up 56.4 percent compared to the January-February period, according to the CAC.

The vacancy rate in the microcenter stood at 25.4 percent in the first quarter of this year.

“Of the sub-markets, the microcenter is suffering the most, not only at the level of commercial offices but also at the level of retail establishments,” C&W Senior Broker Rafael Valera told Efe. “Much of the commercial base of the microcenter comes from company employees, the whole hustle-bustle of the city, the movement.”

At the same time, consumers “don’t know if they’re going to keep their salaries and their jobs and are saving their money,” Wilson said, adding that the populated cities in Argentina’s interior are estimated to have suffered similar levels of office and store closures. EFE

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