2012 Global Market report - NAI Global

Kingston, Jamaica
Ciudad Juarez, Chihuahua, Mexico
Contact
NAI Jamaica
+1 876 925 7861
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
4,244
1.8%
$14.68
$5,365.59
5.8%
11.5%
6.2%
2.736
With local Jamaican interest rates at a historic low and
general bank lending costs falling due to competition, there
has been significant interest in the property market. The
prime properties are those leased to overseas companies
on longer leases (five to 10 years). Development is becoming
viable in many cases. Conservative bank lending is still
evident due to a high number of bad loans over the past
three years.
There remains a shortage of quality office units with
adequate parking facilities. Little new space has been built
in recent years as development costs for new buildings
have exceeded the developed value. On the old Kingston
waterfront DIGICEL, a major cellular provider, is building a
211,000 SF space (19,600 SM) for its own use. This is
expected to galvanize further interest in the old CBD. The
situation is changing and currently a number of developers
are seeking sites to develop. Office yields are around 8.5%
to 9% Rental levels are firming due to a lack of supply of
good space with adequate parking.
The only activity in the industrial market has been a small
number of large owner-occupier developments, mainly in
the warehousing and distribution sectors. Rental demand
for units in the more desirable areas (for staff and
customers) often dictates rental levels. Space over 10,000
SF is limited for rental and purchase. Industrial yields are
around 10% to 11% with rental levels remaining firm.
There has been little new expansion in the retail market.
Fallout, due to the reduction in retail activity, has been
minimal. Yields in this market tend to follow the office
market. Many retail units are owner occupied. Retail yields
are around 8.5% to 9.5% with rental levels remaining firm.
In the resort market, the long awaited $2 billion Harmony
Cove development project by the Tavistock Group of Florida
is slated for commencement in 2012.
Due to the sluggishness of all sectors in the residential
market, development sites have remained unsold. Some
owner occupiers have developed industrial/commercial sites
for their own use. With the reduction of interest rates from
the low teens to 6.25%, property investment is now much
more viable and of increasing interest to local pension funds,
other investment funds and individuals investors.
Contact
NAI Mexico
+1 619 690 3029
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
758,449
3.9%
$1,041.09
$9,489.19
3.2%
4.5%
4.5%
109.713
Juarez, the largest city in Chihuahua, with a population of
1.5 million is situated across the border directly south of El
Paso, Texas. It has been a destination for foreign manufacturing
since the 1960’s. Manufacturing facilities, known as
“maquiladoras” drive the economy. 33% of Mexico’s foreign
manufacturing operations are found in Juarez. Approximately
330 registered maquiladora operations in Juarez employ
over 235,000 people in primary sectors ranging from
electronics to automotive and logistics.
In the industrial market, Juarez is home to Philips, Thomson,
GM, Electrolux, Yazaki, Foxconn, Lear, Johnson & Johnson, GE
Medical, Johnson Controls, Delphi and Ford. Both regional and
international developers have established in Juarez. Institutional
US developers include GE, Prologis and Verde. Mexican firms
such as Vesta and O’Donnell have invested during the last five
years. Industrial vacancy rates in Juarez exceed 14%,
comprising approximately 9 million SF. Most leasing activity is
being offset by increased vacancies from consolidations in the
market. During 2011, most activity was from existing firms trading
older spaces for newer facilities at discounted rates. Recently,
additional activity has increased from firms like Foxconn migrating
new suppliers to improve just-in-time efficiencies. From 2009 to
2011 lease rates fell by 20%; by the end of December 2011,
they are still below historical rates noted from 2007 to 2008.
Between 2010 and 2011, there has been little construction
activity in the market. With excess inventories continuing,
most companies will opt to lease existing buildings and few
will require build-to-suits for lease during 2012. During 2012,
Juarez will continue as a “tenant’s market” with owners
continuing free rent, tenant improvements and discounted
lease rates. Expansions will increase from existing firms which
can benchmark the cost differential between home markets
and migrate more operations to Mexico.
Activity in the office sector was slow during 2011. Local
firms, government agencies and global service providers are
concentrated in a limited cluster of Class A options. Overall
rates remained stable or slightly lower during 2011, with
vacancies ranging from 10% to 15%, except in Class B
(secondary) offices where vacancies run 25% to 30%.
Retail activity continued during 2011 with some expansions
from Mexican retailers growing on the border markets. Some
increased activity is projected for 2012. The critical mass of
industrial firms located in Juarez with proximity to all US
markets and a 50 year history with foreign manufacturers
ensures a bright future heading into 2012.
Kingston At A Glance
conversion 86.15 Jmd = 1 us$ RENT/SF/YR US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
JMD
JMD
N/A
457.00 JMD
229.00 JMD
N/A
762.00 $
457.00 $
N/A
5.30
2.66
$
$
N/A
8.85
5.30
N/A
N/A
N/A
New Construction (AAA)
Class A (Prime)
JMD
JMD
1,372.00 JMD 1,677.00 $ 15.93
1,067.00 JMD 1,677.00 $ 12.39
$ 19.47
$ 19.47
N/A
N/A
Class B (Secondary)
IndustrIal
JMD 762.00 JMD 1,067.00 $ 8.85 $ 12.39 N/A
Bulk Warehouse
Manufacturing
JMD
JMD
457.00 JMD
457.00 JMD
915.00 $
915.00 $
5.30
5.30
$ 10.62
$ 10.62
N/A
N/A
High Tech/R&D
retaIl
JMD 1,067.00 JMD 1,067.00 $ 12.39 $ 12.39 N/A
Downtown (High Street Shops) JMD 762.00 JMD 1,372.00 $ 8.85 $ 15.93 N/A
Neighborhood Service Centers
Community Power Center (Big Box)
JMD
JMD
762.00 JMD
762.00 JMD
915.00 $
915.00 $
8.85
8.85
$ 10.62
$ 10.62
N/A
N/A
Regional Malls
JMD 1,144.00 JMD 1,677.00 $ 13.28 $ 19.47 N/A
Solus Food Stores
N/A N/A N/A N/A N/A
deVeloPment land low/acre High/acre low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
JMD90,000,000.00 JMD 130,000,000.00 $1,044,689.50 $1,508,995.94
JMD 70,000,000.00 JMD 90,000,000.00 $ 812,536.27 $1,044,689.50
JMD 16,000,000.00 JMD 30,000,000.00 $ 185,722.58 $ 348,229.83
JMD 16,000,000.00 JMD 30,000,000.00 $ 185,722.58 $ 348,229.83
JMD 20,000,000.00 JMD 50,000,000.00 $ 232,153.22 $ 580,383.05
JMD 15,000,000.00 JMD 80,000,000.00 $ 174,114.92 $ 928,612.88
Cuidad Juarez At A Glance
RENT/SF/YR
low High effective avg. Vacancy
doWntoWn offIce
New Construction (AAA)
$ 12.00 $ 17.00 $ 14.50 N/A
Class A (Prime)
Class B (Secondary)
suburban offIce
$
$
9.00
7.00
$
$
12.00
9.00
$
$
10.50
8.00
10.00%
25.00%
New Construction (AAA)
$ 12.00 $ 17.00 $ 14.50 15.00%
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
$
$
$
$
9.00
7.00
3.25
3.75
$
$
$
$
12.00
9.00
3.75
5.50
$
$
$
$
10.50
8.00
3.50
4.65
10.00%
30.00%
15.00%
14.00%
High Tech/R&D
retaIl
N/A N/A N/A N/A
Downtown
$ 10.00 $ 18.00 $ 14.00 N/A
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
$ 8.00
N/A
N/A
N/A
$ 10.00
N/A
N/A
N/A
$ 9.00
N/A
N/A
N/A
35.00%
N/A
N/A
N/A
deVeloPment land low/sf High/sf 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
$ 5.57 $ 180.00 $ 242,627.52 $ 7,840,745.74
$ 3.25 $ 50.00 $ 141,569.02 $ 2,177,984.93
N/A N/A N/A N/A
$ 7.00 $ 20.00 $ 304,917.89 $ 871,193.97
$ 9.00 $ 19.00 $ 392,037.29 $ 827,634.27
2012 Global Market Report n www.naiglobal.com 71