Published on and written by Cyril Jarnias
Commercial real estate in Colombia has long been the domain of a few major local groups and regional funds. But the combination of a moderately growing economy, rapid urbanization, an office market undergoing restructuring, and an industrial sector driven by e‑commerce and nearshoring is now opening a window of opportunity that international investors are starting to watch very closely.
The office and industrial/logistics markets dominate, with a strong concentration in Bogotá and Medellín. They are characterized by solid demand for quality assets, low vacancy rates, and rising rents in premium segments. The regulatory environment remains largely very favorable to foreign investors, despite some tax uncertainties.
A Favorable Macro Context Despite Turbulence
The starting point is a growing economy, albeit more slowly than before, but still advancing. Gross Domestic Product hovers around 2 to 3% expected growth, with a projection of about 2.4% for 2025 according to the IMF, and scenarios of around 3% annually in the second half of the decade. Inflation is normalizing around 4–5%, after a peak that had pushed the central bank to raise and then begin to relax its rates.
The real estate sector in Colombia has an estimated value of over 52.9 billion dollars.
Demographics also play a role for the market: more than 51 million inhabitants, with about 80% in urban areas, a continuing urbanization trend, an expanding middle class, and an unemployment rate around 8.2%. In the background, the local currency – the Colombian peso – has depreciated by about 7% recently, creating a discount on the order of 25 to 40% for dollar or euro investors.
For an international investor, this means two things: a macro environment that is not as dreamy as during an oil boom, but remains relatively stable on a regional scale, and a currency effect that makes market entry significantly more attractive.
A Legal Framework Very Open to Foreign Investors
On the legal front, Colombia is one of the most permissive countries in the region regarding property ownership for non‑residents. The Constitution guarantees equal rights between Colombians and foreigners: no special permit, not even a visa, is needed to acquire commercial property.
Foreign investors are subject to specific limits: prohibition on buying vacant land within 100 km of borders, investing in sectors related to defense or processing imported hazardous waste, and an obligation to respect protections for indigenous or Afro-descendant collective lands. These restrictions generally do not apply to commercial, office, or warehouse real estate in major cities.
The key, however, is registering the investment with the central bank (Banco de la República). This registration – via a foreign exchange declaration – guarantees the right to repatriate dividends and capital in the original currency. Doing it incorrectly or forgetting it risks penalties (up to a theoretical 200% fine) and future blockages.
Purchasing a property follows a structured process: first obtain a tax ID number (RUT/NIT), then sign a promise of sale. This is followed by due diligence (review of property titles, tax, zoning, and easement checks). The transaction is finalized by signing the deed before a notary and registering it in the property registry. Closing costs for the buyer typically amount to 2% to 5% of the purchase price (notary fees, registration taxes, legal fees). Brokerage commissions (3% to 4%), usually borne by the seller, are in addition to these costs.
For investors looking to structure their operations, the star corporate form is the SAS (Simplified Stock Corporation), easy to set up, with limited liability and great statutory flexibility. Branches of foreign companies are possible but involve unlimited liability for the parent company regarding local liabilities.
Imperfect but Readable Taxation
On the tax side, the landscape is dense but relatively predictable. Corporate tax is 35% on profits, with a reduced rate of 20% for industrial users located in free trade zones. In addition, there is a withholding tax system (often 20% for payments to non‑residents) and a 15% capital gains tax on the sale of fixed assets held for at least two years (10% for individuals, under certain conditions).
Since late 2018, the purchase of the commercial real estate asset itself is not subject to VAT, thereby reducing entry costs into this market. However, VAT at a rate of 19% applies to most associated services (management, construction work, certain commercial leases). For developers, it also applies to the sale of new properties in specific categories.
Local governments levy a property tax (predial) typically ranging from 0.3% to 1.6% of the cadastral value, as well as a industry and commerce tax (ICA) on revenue from economic activities (0.2% to 1.6% depending on the type of activity).
For the foreign investor holding a commercial property, the typical scheme looks like this:
| Tax Element | Specifics for Commercial Real Estate |
|---|---|
| Corporate Income Tax (CIT) | 35% general rate, 20% in free trade zones |
| Capital Gains on Sale (>2 years) | 15% for companies |
| Annual Property Tax (predial) | 0.3–1.6% of cadastral value |
| VAT (services, leases, construction) | General rate 19% |
| Industry and Commerce Tax (ICA) | 0.2–1.6% of local turnover |
The picture darkens a bit with the recent introduction of a 3.5% levy on real estate transactions (self‑withholding) via Decree 0572, whereas it was previously only 1.1%. The objective: to fill a budget deficit exceeding 21 trillion pesos.
To attract capital, several countries offer tax incentives such as reductions in Corporate Income Tax (CIT) for foreign investors, preferential regimes in free trade zones, 25 to 30% tax credits for R&D or technology projects, and “mega-investment” schemes guaranteeing stable tax conditions for 20 years for projects worth several hundred million dollars.
An Office Market Undergoing Restructuring in Bogotá
The heart of the office market is Bogotá. The capital concentrates the headquarters of multinationals, banks, major law firms, public bodies, and key players in professional and technology services.
After the telework shock during the pandemic, the city is going through a “new normal” phase where demand is being reshaped rather than disappearing. In 2025, net office absorption remained stable compared to 2024, a sign that the market has digested the bulk of the post‑Covid disengagement.
The stock of Grade A offices reached about 1.69 million m² in the second quarter of 2025.
Rents, on the other hand, reflect this tension: the average settled at around 83,400 COP/m² per month (approximately 20.2 USD/m²), a historic level, with a continuous upward trend. But behind this average lies a very marked segmentation of the market.
Prime assets – recent buildings, generous ceiling heights, environmental certifications, excellent access, integrated services – show vacancy rates below 3%, with rising rents. At the other end of the spectrum, older or poorly positioned buildings can exceed 16% vacancy, forced to offer discounts or concessions to attract tenants.
The contrast between segments can be summarized as follows:
| Office Segment in Bogotá | Approximate Vacancy Rate | Rent Trends |
|---|---|---|
| Prime (A+/A, top corridors) | < 3% | Sustained increase, strong pressure |
| Standard / Secondary | > 16% | Stagnation or selective decline |
| Overall Grade A Market | ~ 9.8% | Historically rising average |
This polarization also translates into user decisions. Large companies prefer compact and highly efficient spaces rather than oversized floorplates, with a strong appetite for “plug & play” spaces, already equipped and flexible. Demand concentrates on spaces under 300 m² for SMEs and agile structures, and on floorplates over 1,000 m² for multinationals in the most established corridors – where supply is paradoxically most limited.
Telework, far from having killed the office, has permanently anchored the hybrid model. Result: an explosion of coworking spaces and managed offices. The International Workplace Group (IWG) already operates a network of 25 flexible buildings in Bogotá, and this format continues to gain ground, particularly in central business districts.
International Workplace Group (IWG)
Iconic Transactions and Key Corridors in Bogotá
The market’s dynamism is reflected in a series of major recent transactions. For example, a public body took 3,000 m² in Tower D of the Central Point complex; the architecture giant Gensler inaugurated its new headquarters in Bogotá; Ernst & Young is preparing to occupy three floors in the Fura Tower (Connecta 80); the Atrio building – an iconic project signed in collaboration with British architect Richard Rogers – already has several thousand square meters occupied by leading players.
Concrete examples of flagship buildings and major companies that have consolidated their operations there, illustrating market dynamics.
Fully occupied by the convenience store chain Tiendas D1, demonstrating strong demand for quality real estate products.
Leased to international heavyweights like Mastercard and Deloitte, confirming the sector’s appeal for financial services and consulting.
International groups like the British insurer UIB and the risk company Control Risks have consolidated their operations in landmark buildings in this area.
Conversely, the largest available spaces are now concentrated on peripheral corridors: Connecta 26 near the airport, Central Point in the Salitre area, or Urban 165 in the north zone. For a value‑add investor, these secondary but well‑connected locations can offer discounted entry points, with potential for value enhancement through repositioning (modernization, green certification, services).
Medellín: A More Compact but Highly Dynamic Office Market
While Bogotá remains the giant, Medellín stands out as a laboratory for urban innovation and as a hub for services, technology, and medical tourism. Its office market is more compact, but remarkably vibrant.
At the end of 2022, the office stock there reached just over 851,000 m², with a projection of nearly 927,500 m² by 2025, representing expected growth of 8.2%. The city concentrates 64% of the office supply in the Aburrá Valley, with the other peripheral municipalities sharing the remaining 36%.
The El Poblado neighborhood concentrates about 50% of the total real estate inventory and attracts the majority of foreign demand (expatriates, digital nomads) as well as service companies. The Las Palmas sector, meanwhile, represents about 11% of the stock and specializes in latest-generation residential projects of A+ and A categories.
2023 figures attest to this traction: in the first quarter, availability fell by 8.6% compared to the previous quarter to around 73,200 m²; at the same time, cumulative net absorption jumped 64% to reach 6,469 m², driven mainly by call centers and BPO, finance, and the pharmaceutical industry.
The average turnover period for spaces on Bogotá’s commercial real estate market.
This price structure is likely to attract international companies looking for a less costly alternative than Bogotá, while benefiting from a powerful innovation ecosystem, developing infrastructure (metro, “Metro de la 80” tramway, Toyo tunnel for port access), and an image of a technological, safe, and attractive city.
Office Lease Fundamentals: Visibility and Flexibility
For a commercial real estate investor, the nature of leases and occupancy conditions are decisive. In Bogotá as in Medellín, office contracts are typically signed for terms of 3 to 7 years, with an average around 5 years.
The base rent (market rent) covers the occupancy of the leasable area, to which common area maintenance charges (CAM) are added – generally 3 to 4 thousand pesos per m² – plus services (energy, water) and 19% VAT on the rent.
Landlords often offer rent‑free periods (1 to 6 months) to facilitate move‑in, the duration of which depends on the leased area and lease term. Furthermore, brokerage fees for the tenant are typically paid by the landlord, simplifying the transaction.
From a technical standpoint, the loss factor (ratio between leasable and usable area) hovers around 10%, a regional standard. Occupancy density varies from 5 to 15 m² per employee, with a growing trend of shared workstations and collaborative spaces. Fit‑out costs for Grade A offices are generally between 1,000 and 1,300 USD/m², with construction lead times of 15 to 40 weeks before occupancy.
These parameters create a relatively transparent environment for modeling medium‑term rental cash flows, with moderate vacancy periods in good assets and visibility on necessary capex.
The Spectacular Rise of Industrial and Logistics
Alongside the office segment, the industrial/logistics segment is experiencing a particularly strong cycle, fueled by three engines: the growth of e‑commerce, the nearshoring strategy of North American companies, and an ambitious infrastructure program (4G/5G roads, logistics corridors, port modernization).
The Colombian logistics and warehousing market was valued at approximately 38 trillion pesos in 2023.
In Bogotá, the warehouse stock reached about 2.88 million m² in the second half of 2024, with an availability rate of only 4.1%. Net absorption for the year was limited to 18,362 m², reflecting some caution in a tighter macro context.
Cumulative net absorption jumped to 159,206 m² in the first half of 2025, indicating that spaces are filling up much faster than supply is increasing.
Demand clearly concentrates on Grade A and A+ warehouses, with significant clear heights, excellent access, modern fire protection systems, and sometimes environmental certifications. The leading sectors are e‑commerce, retail, 3PL logistics, transportation, and light manufacturing.
Logistics Corridors and Key Transactions
Around Bogotá, major industrial axes are structured mainly along the Sub Urbano Calle 80, Mosquera, Funza, Tocancipá, and Occidente corridors. The Calle 80 and Funza sections concentrate the highest rents for Grade A warehouses, due to their strategic position for national distribution.
Major international players have already positioned themselves. Porsche had a custom‑built (built‑to‑suit) warehouse of 5,200 m² constructed in the Latam Calle 80 industrial park, while the Danish logistics company DSV took nearly 6,240 m² there. The Pantera 80 park delivered a first built‑to‑suit warehouse of 9,000 m², immediately occupied by Solística.
Several local distributors and e‑commerce players have recently expanded their logistics capacities in Colombia. Buscalibre took 3,310 m² in the Celta park. The Portuguese group Jerónimo Martins (Ara stores) commissioned a 38,000 m² distribution center, with an additional 23,000 m² in Tocancipá. The Colombian giant Grupo Éxito leased 8,000 m² in Interpark. Finally, PriceSmart, a major wholesale player, occupied over 9,000 m² in Latam Calle 80 to optimize its supply chain.
This movement fits into a national strategy: the Logistics Policy (PNLogística) aiming to modernize the system by 2030, over 75 trillion pesos allocated to strategic corridors, three major 4G road projects delivered in 2023 reducing freight travel time between Bogotá and Medellín by 30%, and over 110 operational free trade zones offering customs and tax benefits. Warehouses located in free trade zones saw their capacity increase by 18% in 2023.
Colombian logistics parks offer very competitive capitalization rates (cap rates), generally between 8% and 10%, potentially exceeding this level in some secondary cities. Rents tend to increase when the vacancy rate falls below 5%. For a core+ or value‑add investor, this segment combines immediate cash flows, capital appreciation potential, and exit prospects in a professionalizing market.
Medellín, Cali, Barranquilla: An Expanding Industrial Network
Beyond the capital, Medellín, Cali, and Barranquilla constitute the three other major logistics hubs. Medellín, despite a smaller market, has the lowest industrial vacancy in the country. Infrastructure projects (Toyo tunnel to the Urabá port area, metro extensions, Metro de la 80) reinforce its role as a regional hub.
The logistics vacancy rate in Cali, the highest among major cities at 6%, is primarily due to rapid delivery of new supply rather than demand difficulties. This situation can represent an opportune entry point in the medium term for investors anticipating a strengthening of the Buenaventura port and the Pacific highway.
Barranquilla, with its profile as a Caribbean port city, combines industrial, logistics, and tertiary activities. The free trade zones around the port attract operators seeking an export platform to the United States and Europe, within the framework of Colombia’s numerous trade agreements (covering over 60 countries, including the US, the European Union, and several Asian partners).
Proptech, Data, and Sustainability: Three Accelerators for Investors
One distinctive feature of the Colombian market is the extremely rapid rise of Proptech. The country is now considered a true regional hub, with about 200 Proptech and ConTech startups, 60% based in Bogotá and 40% in Medellín. The sector captured 29% of the country’s tech investments in 2023, representing nearly one billion dollars of total committed capital.
Players like Habi (an iBuyer platform that became a unicorn, raised 300 million dollars in 2022) or LaHaus (a transactional platform, raised 62 million in Series C) have profoundly changed the way to find, value, and finance real estate assets. For an investor, this translates into:
Main benefits brought by using our solutions for real estate professionals.
Better price and rent transparency for informed decisions.
Easier access to essential market data (vacancy, absorption, turnover periods).
More powerful simulation and analysis tools for location selection and portfolio structuring.
In parallel, sustainability is no longer a “nice to have” but a true market standard in high‑end segments. In Bogotá and Medellín, about 20% of high‑end office space is already certified under labels like LEED or EDGE, and the share is growing rapidly.
In Colombia, nearly 11.5 million square meters of real estate projects obtained green certification between 2021 and 2022.
For an investor in offices or warehouses, targeting certified or “certifiable” assets not only secures more resilient tenant demand – as large users and multinationals have strict ESG requirements – but also provides access to more favorable financing and improves liquidity upon resale.
Yields, Valuation, and the Role of Secondary Cities
In terms of pure performance, Colombia stands out with some of the highest gross yields in the region. Commercial spaces lease with yields around 7 to 9%, prime urban apartments around 6 to 8%, and industrial/logistics assets, as we’ve seen, can exceed 8 to 10% cap rates.
In Colombian secondary cities like Pereira, Manizales, Armenia (Coffee Region), Bucaramanga, or some coastal areas, capitalization rates on commercial assets can exceed 9%. These markets offer interesting competitiveness for an income‑oriented fund or for an investor willing to assume a longer holding period, despite generally lower liquidity.
A quick overview can help situate the different segments:
| Segment / City | Typical Gross Yield | Main Comment |
|---|---|---|
| Prime Offices Bogotá | 6–8% | Supply tightness, very low vacancy in prime |
| Offices Medellín | 7–9% | Growing market, rents still moderate |
| Retail (malls, retail) | 7–9% | Shopping centers under‑supplied, strong footfall |
| Logistics/Industrial | 8–10% | High cap rates, limited vacancy in good parks |
| Commercial Secondary Cities | ≥ 9% | High yields, less liquid market |
On the valuation side, the historical trajectory shows a market far from extreme speculative bubbles:
– 2010‑2014: +9 to 11% per year;
– 2015‑2019: +6 to 8%;
– 2020‑2022: +3 to 5% (Covid shock absorbed);
– 2023‑today: +5 to 7% average annual pace.
Projections look more towards annual appreciation of 4 to 6% in Bogotá, 5 to 7% in prime areas of Medellín, 3 to 5% in the historic center of Cartagena, and 7 to 9% in some tourist areas or catching‑up secondary cities.
For strictly commercial real estate (offices, retail, industrial), these valuation trajectories add to often attractive rental cash flows, placing Colombia in a competitive position compared to more mature but more expensive markets on the continent.
Risks, Uncertainties, and Points of Caution
All is not rosy, however. A serious investor cannot ignore several categories of risk:
On the macro and political front, first, Colombia faces a significant budget deficit pushing the government to seek additional revenue, often via tax reforms adopted or proposed. Some recent measures – like the increase in taxation on real estate transactions or dividends – show that tax pressure on capital can evolve rapidly. The 2026 presidential election adds a dose of uncertainty about the direction of economic policies.
Peso volatility is a major risk: depreciation can increase local currency yields but reduce dollar‑denominated performance, while a sharp appreciation can increase the cost of servicing local debt.
On the operational front, the market still suffers, in some segments, from a lack of reliable data and informal practices (poorly drafted contracts, incomplete titles, unclear cadastral situations). Meticulous study of the Certificado de Tradición y Libertad (Certificate of Title and Freedom), verification of local taxes, clarity on easements and zoning permits are essential, under penalty of very costly discoveries after acquisition.
Finally, there are physical risks (earthquakes in the Andes, floods in some areas, exposure to climate change on the coasts) and residual security challenges on some logistics routes, notably in the form of cargo theft – about 1 shipment in 100 experienced an incident of this type in 2023.
Where Are the Best Entry Windows Today?
By aggregating available data on offices, industrial/logistics, sustainability trends, macro context, and capital flows, several investment avenues emerge:
– Prime offices in Bogotá, in consolidated corridors (CBD, Andino, Chicó, Avenida Chile), where vacancy below 3% and the near‑absence of new supply create structural scarcity. The typical strategy involves targeting high‑quality towers, already partially leased to multinationals, with potential for rental appreciation and ESG capex.
Grade A and A+ offices in Medellín, particularly in the El Poblado and Las Palmas areas, benefit from an expanding market. Their rents remain lower than in the capital. Demand is mainly driven by the BPO, technology, and healthcare sectors.
– Grade A logistics parks around Bogotá, Medellín, Cali, and Barranquilla, backed by 4G/5G road corridors and free trade zones. The examples of Porsche, DSV, PriceSmart, Jerónimo Martins, or Grupo Éxito show that the appetite of major users is far from satisfied.
– Commercial assets in dynamic secondary cities, where cap rates often exceed 9%, subject to thorough analysis of local demand and tenant quality.
– Finally, projects or buildings that can be green‑certified (LEED, EDGE, etc.), which benefit from both a demand premium from users and more attractive financing.
Conclusion: A Market in Transformation Rather Than Saturation
The often‑circulated idea of a saturated office market or a logistics cycle nearing its end does not hold up to a close reading of the data. In Bogotá as in Medellín, sector professionals speak more of a transformation of demand than of oversupply: adaptation to new forms of work, growing requirements for sustainability and services, search for flexibility, compression of space per employee, but maintenance, even strengthening, of needs for the best products in the best locations.
In the industrial sector, demand generated by e‑commerce, supply chain reconfiguration (nearshoring), and infrastructure projects suggests several more years of firm rents and low vacancy in the most sophisticated parks.
Commercial real estate in Colombia, particularly the office and logistics segments in Bogotá and Medellín, presents an attractive risk/return profile in the region. This investment, however, requires accepting complex and evolving taxation, the volatility of an emerging currency, and the necessity for thorough due diligence.
The keyword, more than ever, is selectivity: selecting cities, corridors, assets, tenants, and local partners. By leveraging the rise of Proptech, the dynamics of green construction, and a legal framework largely open to foreign capital, it is possible to build commercial real estate portfolios in Colombia capable of generating solid recurring income, while benefiting from the appreciation potential of a market still in a consolidation phase.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
