Paraguay Facing Latin America: How Asunción is Repositioning Itself in the Regional Corporate Market Cycle

A small market in scale, but one of the fastest-growing: Asunción is repositioning itself in the region with new corporate centralities, rising prices, and internationally benchmarked projects.

The corporate office market in Latin America is at a decisive turning point in 2025. After several years of adjustment and reconfiguration following the pandemic, the region is finally showing clear signs of a new growth cycle, with more dynamic absorption, recovering prices, and demand that is once again prioritizing quality, sustainability, and operational efficiency. According to JLL's Latin America Office Market Report , the technical basis for this analysis, the continent's major capital cities have moved beyond the correction phase and are now entering a stage marked by increased competition among submarkets, consolidation of strategic hubs, and a renewed appreciation for workspace as a tool for attracting talent. Although companies are regaining more stable positions in their portfolios, new supply has not yet fully kept pace with the recovery of key indicators, resulting in a slowdown in the emergence of new projects across the region.

Nearly one in four square meters of office space is located in Mexico City. Adding the next two largest markets, São Paulo and Santiago, reveals that they account for 50% of the region's total office space supply. Net absorption grew 50% year-on-year, driven primarily by the São Paulo and Mexico City markets. In virtually all the capital cities analyzed, a clear trend is evident: the return to the office is now a well-established process throughout the region. Competition today revolves around which buildings offer the best experience and how each company leverages its real estate portfolio as a tool to attract talent. Simultaneously, Latin American markets continue to register gradual declines in vacancy rates, reflecting more active demand and the absorption of available space.

In this demanding regional context, Paraguay presents a unique case. With an inventory of just 278,000 m², Asunción is one of the smallest markets in the region, but also one of the fastest growing. According to the JLL report, 28,000 m² will be added between 2025 and 2026, equivalent to 11% of the current stock, and projects in advanced planning could increase supply by at least an additional 70,000 m² over the next five years. This proportional rate of expansion places Paraguay ahead of several mature markets that already operate with stabilized inventories and less capacity for physical growth.

In addition to the difference in scale, there is a geographical difference. While cities like Santiago, Bogotá, and Mexico City have extensive networks of consolidated submarkets, Asunción still maintains a high degree of concentration: 88% of the inventory is located in Aviadores del Chaco and Villa Morra. However, the market is already showing signs of transitioning to a broader cycle, with new developments moving westward and the arrival of more technically sophisticated projects, including the first corporate building designed locally by Norman Foster's studio. This expansion and diversification mark a turning point in Asunción's urban and corporate structure, which is beginning to align with the growth patterns previously seen only in large-scale markets.

Prices reflect this transformation. In the year-over-year comparison, Asunción saw the largest increase in Class A rents in the entire region: a 23.6% growth, rising from USD 14.8/m²/month to USD 18.3/m²/month. This places the Paraguayan capital above several cities with older markets, such as Lima, Rio de Janeiro, and San José, and brings it closer to the values typical of premium corridors in Bogotá, Guadalajara, or even Santiago. This is a remarkable positioning for a city whose market, until a few years ago, competed primarily on price rather than differentiating attributes.

Meanwhile, the region presents critical opportunities that also have repercussions for Paraguay. Unmet demand for flexible workspaces has already reached 2.3 million square meters across Latin America, a sign that flexibility has moved beyond a tactical solution to become a structural component of corporate portfolios. Sustainable buildings, for their part, are registering 12% higher occupancy rates and rents 8 to 15% higher than traditional assets, revealing a clear preference for products that reduce operating costs and improve employee well-being. And technological integration, particularly in access control, energy efficiency, and smart services, is consolidating as a competitive advantage in more mature markets—a gap that Asunción has the opportunity to close more quickly than cities with older inventories.

The vacancy rate also reveals a structural difference that favors Paraguay. While Rio de Janeiro continues with an availability of almost 29%, Buenos Aires hovers around 18%, Mexico City exceeds 19%, and Santiago stabilizes just below 9%, Asunción operates under more balanced conditions, with no signs of oversupply and with demand keeping pace with new production. The absence of a large aging inventory, a key challenge in markets like São Paulo, Bogotá, or Lima, allows Paraguay to focus on expanding its modern supply without having to face massive restructuring or devaluation processes.

The regional analysis also suggests some strategic recommendations for companies with a presence or interest in Paraguay. The first is to evaluate hybrid models that combine dedicated spaces in core markets with flexible solutions in secondary markets, allowing for operational expansion without committing large fixed areas. The second is to prioritize geographic consolidation, considering that hubs with better connectivity and greater talent availability maintain significantly higher absorption rates. And a third is to integrate sustainability and technology as key decision-making pillars, given that their effects on productivity, energy efficiency, and operating costs are already measurable and constitute a clear competitive advantage in all the markets analyzed.

The outlook for 2025-2027 points to sustained growth across the region, although with differentiated dynamics between mature markets, which are entering a cycle of renewal and modernization, and emerging markets, where new offerings are being built to international standards from the outset. Paraguay, due to its size and stage of development, clearly belongs to this second category: a young, agile market with room to grow and a quality of projects that no longer competes with the region from a peripheral position, but rather as an actor consolidating its own modernization model.

This article is based on data from JLL's "Latin America Office Market Report - November 2025," which analyzes 15 corporate markets in the region.