Sao Paulo is now the sixth largest city in the world, with a population of 18.4 million. It is the business center of Brazil, as well the capital of the State of Sao Paulo, the richest and most populous in the country. The state is responsible for more than half of Brazil's manufacturing output and more than one-third of its coffee production.
The WTC Sao Paulo first opened in 1995, near the beginning of Brazil's most recent economic expansion. The facility was built for $230 million, financed by 34 pension funds and the Servlease Group. It contains 26 floors (208,883 square feet) of office space, 3 floors (39,960 square feet) of trade mart space, a 30,000 square foot convention center, a 300-suite five-star hotel, and 122 stores in a 183,600 square-foot decoration & design center. Five additional buildings are planned.
Concentration of Services
An estimated 7,000 people a day, or 2.5 million a year, pass through the WTC Sao Paulo facilities. The success of the trade mart and showcases for fairs and other events led to the conversion of the rooftop tennis court to enclosed exhibition space for use by trade and consumer shows. The WTC Sao Paulo has sparked the construction of myriad adjacent buildings, including Globo Network Television's offices, BankBoston's offices, the Sao Paulo Properties Exchange Building and the Centro Empresarila Nacoes Unidas (CENU) complex.
Real Estate Premiums
While rental rates for the WTC Sao Paulo have been comparable to the local market rather than above it, the complex has shown consistently high occupancy, well above the overall market. The office space is approximately 92.5% occupied, above the 91 % for market-wide class A space, and well above the overall market's 86% occupancy. Lease rates of $22 per square foot are less than the $25.40 rate for "A+" office space, but well above the $16.35 per square foot for standard Class A space. The hotel rates of $194 per night were comparable to like properties in the market, but occupancy rates of 75% led to $6.5 million operating profit for the hotel and its convention center.
The WTC Sao Paulo was a pioneering development that sparked the transformation of the Brooklin borough of Sao Paulo from a residential district into the city's newest business core. The district now has approximately 90 office buildings, all built after the WTC complex opened. Property values have doubled in the last four years.
The WTC Sao Paulo last year generated 500,000 overnight visitor days, and 312,500 day visits. The associated direct, indirect and induced spending totaled $321.8 million in 2001 dollars.
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