2012 Global Market report - NAI Global

Santiago, Chile
Bogotá, Colombia
Contact
NAI Sarrà
+1 56 2 347 7000
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
291,933
6.0%
$222.79
$12,804.99
3.0%
8.7%
5.3%
17.399
The Chilean economy is regarded as the most developed in
the region. In 2011, the Chilean economy experienced
steady growth, as evidenced by the 6.8% growth rate
compared with 5.2% in 2010. The national GDP reached an
average of US $16,000 per capita. In 2011, Chile enjoyed
one of the most productive periods in the past several years.
The Chilean economy wasn’t affected by the student’s
demands and protests during the final months of 2011.
In Santiago, the real estate market reflects the good health
of the economic growth with a notable increase in the
number of new building permits and the speed with which
new space continues to be absorbed. In 2011, 74,000 SM
entered the Class A+ office market. In 2011, office vacancy
decreased to 2.6%. The absorption of Class A and Class A+
office space reached 79,204 SM.
The most significant office project to come on the market
was the Costanera Center office building, which is designed
to be a “green” building. It boasts more than 120,000 SM
of available space in four towers with a huge retail space
including a hotel and a shopping mall with convenience
and retail stores. This complex is being developed by
the prestigious architect Cesar Pelli. It will be the highest
building in Latin America standing at over 300 meters high.
Over the next 24 months, an additional 450,000 SM of
office space is projected to hit the office market. This will
absorb the high demand for Class A+ office space in the
capital city of Santiago. We expect to see a vacancy rate
near 5% in 2012 for Class A+ office space. The average
lease rates in the main Santiago business areas rose
on average to US $27.13/SM. Sale values for new office
buildings in El Golf, the most exclusive Santiago business
district, reached an average of US $2,778/SM.
Investment returns have stabilized in the three major asset
classes ranging from 7% to 9% for office, 9% to 11% for
retail and 11% to 12% for industrial. These return rates are
expressed in UF which is an internal index that protects the
investment from inflation. All leasing contracts are signed
with this index. The index varies approximately 3% a year.
Given this, the majority of the more important foreign funds
are steadily taking a position in our market.
Contact
NAI Colombia Correa
+1 571 632 4420
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
440,831
4.6%
$308.57
$6,700.61
2.6%
11.5%
4.5%
46.052
Colombia has experienced a strong recovery from the global
economic crisis and has continued to make inroads into the
mining and oil sectors. Colombia is Latin America’s number
four oil producer and continues to be recognized around the
world as an emerging power. Improved security, greater
political stability and efficient policies to control inflation and
budget deficits have also allowed the country to recover its
investment grade rating and sign an FTA with the US.
Office market vacancies were approximately 10% in 2010,
but in 2011, due to greater demand from multinational
companies, the vacancy rate for Class A space was
approximately 5% and rental rates were more stable at
approximately $28/SM. Overall, supply continues to lead
demand in Class B and Class C buildings. Important projects
for 2011 include Torre REM, a $50 million project that will
comprise 20,000 SM of office space.
Bogota and its Greater Metropolitan Area encompass more
than 4 million SM of industrial land. In 2011, the largest
vacancy among the main industrial submarkets was
registered in the suburban market with 83% of the total
industrial inventory. Recent developments include Zona
Franca del Pacifico, with more than 200,000 SM of industrial
and office space.
Colombia’s hotel sector expects to invest $1.5 billion this
year, about $300 million more than was invested last year.
The increase in investment is based on government
promises that hotels built after 2003 will receive tax benefits
for 30 years, while hotels that invest in upgrading their
establishments will be allowed tax breaks for fifteen years.
The country's three biggest cities Bogota, Medellin and Cali
comprise most of this new development. However, new
initiatives for different types of projects such as ecotourism
developments have begun. Also, many recognized international
brands have entered the local market. For example, the
exclusive brand Six Senses is planning to enter the
Colombian market and develop luxury resorts in the
Amazonas and Santa Marta areas.
In the retail sector, demand remained strong with the overall
vacancy rate in Bogotá around 4% for Class A product and
rent prices remained stable. In 2011, Metro 127 in Bogota,
was opened with 10,000 SM. It is forecast that in 2012
Colombia will continue to be an attractive destination for
both corporate users and investors.
Santiago At A Glance
conversion 523.15 clP = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
CLP 132,411.00
CLP 116,522.00
CLP 116,522.00
CLP 198,621.00 $ 23.51
CLP 177,431.00 $ 20.69
CLP 148,300.00 $ 20.69
$ 35.27
$ 31.51
$ 26.34
5.30%
0.60%
2.10%
New Construction (AAA)
Class A (Prime)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Class B (Secondary)
IndustrIal
CLP 90,039.00 CLP 121,818.00 $ 15.99 $ 21.63 9.26%
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
CLP
CLP
CLP
23,834.00
18,500.00
31,000.00
CLP 31,779.00 $
CLP 24,400.00 $
CLP 41,500.00 $
4.23
3.29
5.51
$
$
$
5.64
4.33
7.37
1.90%
N/A
N/A
Downtown
CLP 113,873.00 CLP 344,268.00 $ 20.22 $ 61.14 3.70%
Neighborhood Service Centers CLP 200.50 CLP 301,500.00 $ 0.04 $ 53.54 N/A
Community Power Center CLP 385,200.00 CLP 770,400.00 $ 68.40 $ 136.81 N/A
Regional Malls
Solus Food Stores
CLP
N/A
25,680.00
N/A
CLP 77,040.00 $
N/A
4.56
N/A
$ 136.81
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
CLP 1,544,793.00 CLP 2,648,218.00 $ 11,949,852.10 $ 20,485,471.79
CLP 240,000.00 CLP 278,000.00 $ 1,856,536.44 $ 2,150,488.05
CLP 64,200.00 CLP 85,600.00 $ 496,623.50 $ 662,164.67
CLP 64,200.00 CLP 85,600.00 $ 496,623.50 $ 662,164.67
CLP 428,000.00 CLP 428,000.00 $ 3,310,823.33 $ 3,310,823.33
CLP 107,000.00 CLP 256,000.00 $ 827,705.83 $ 1,980,305.54
Bogotá At A Glance
conversion 1953.50 coP = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
COP 55,000.00
COP 42,000.00
COP 30,000.00
COP 75,000.00 $ 31.39
COP 50,000.00 $ 23.97
COP 38,000.00 $ 17.12
$ 42.80
$ 28.53
$ 21.69
5.00%
8.00%
12.00%
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
COP 17,000.00
N/A
N/A
COP 26,000.00 $
N/A
N/A
9.70
N/A
N/A
$ 14.84
N/A
N/A
N/A
N/A
N/A
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
COP 9,000.00
N/A
N/A
COP 19,000.00 $
N/A
N/A
5.14
N/A
N/A
$ 10.84
N/A
N/A
13.00%
N/A
N/A
Downtown
Neighborhood Service Centers
COP 125,000.00
COP 28,000.00
COP 200,000.00 $ 71.34
COP 77,000.00 $ 15.98
$ 114.14
$ 43.94
4.00%
N/A
Community Power Center
Regional Malls
Solus Food Stores
COP 16,000.00
COP 14,000.00
N/A
COP 21,000.00 $
COP 23,000.00 $
N/A
9.13
7.99
N/A
$ 11.98
$ 13.13
N/A
N/A
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
2012 Global Market Report n www.naiglobal.com 69