2012 Global Market report - NAI Global

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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
Guadalajara, Jalisco, Mexico Guanajuato, Mexico 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 Guadalajara, Jalisco, is the second largest city in Mexico with more than 4.5 million inhabitants. It has a thriving economic and real estate development climate. As a colonial city, Guadalajara has managed to modernize without seriously altering its centuries-old city plan or endangering its reputation in Mexico for a good quality of life. Guadalajara is known as the “Silicon Valley of Mexico,” hosting multinational firms such as IBM, HP, Foxxcon, Flextronics, SCI-Sanmina and Freescale Semiconductor. Guadalajara is a destination for electronics, manufacturing, Mexican national firms and third party logistics. New sectors include call centers and fulfillment operations. Several regional and international developers have made large investments during the last five years. These include AMB, Prologis, CPA and German funds. Aggressive promotion has nearly doubled the city’s industrial base during the past four years. Class A industrial facilities reflect 95% occupancy and inventories are being reduced by demand from manufacturing, engineering centers, call centers and back office operations. During 2012, three major CEM’s will expand operations; Sanmina, Flextronics and Jabil. Gamesa will construct its regional distribution center. Several call centers expanded during 2011 and three more are planned for 2012. Additional construction is planned for areas outside the city center, as infill sites are being rezoned for commercial uses. Industrial lease rates remained stable in 2011. During 2012, as back-office, call centers and distribution operations absorb remaining inventory, lease rates may increase. The city experienced an increase of nearly 500% Class A office inventory between 2009 and 2011. Even with heavy demand, this resulted in excess vacancies during 2011 and slightly declining rates. Two additional projects are scheduled to begin construction during 2012, totaling nearly 400,000 SF. Financial services are driving the demand. Banco del Bajío and Seguros MTY/NYL will secure additional space during 2012. There are seven major retail centers in Guadalajara, with the most recent opening in October 2011. Decreased vacancies in the retail sector in Guadalajara will continue during 2012. Convenience stores such as Oxxo, 7 Eleven and Waldo’s are seeking both in-line and pad sites. Retail space rates and land values remained flat in most commercial submarkets during 2011. Strip center construction will return during 2012. Guadalajara is a regional distribution center with airlift, rail and highway access for the entire country, making it a great place for companies to locate. It also provides the best climate in Mexico for advanced education in all sectors. 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 Guanajuato, with a population of 5.5 million people, is located in Central Mexico in the area known as El Bajio. Guanajuato is the crossroad for two diverse industrial corridors; the Pan-American Highway (45) and NAFTA Highway (57) which link South America, Mexico and North America. Guanajuato is establishing the next Inland Port and FTZ to showcase the multimodal capabilities and advantages of this emerging state. Guanajuato is home to six industrial parks. The industrial market is comprised of approximately 8.5 million SF of construction. Guanajuato’s main industries include metal fabrication, chemicals, machinery, appliances and beverages. Major corporations located in Guanajuato include GM, American Axle, Colgate Palmolive, Faurecia, Getrag, Flexi, VW and the new Mazda and Honda plants. Guanajuato Inland Port is a world class project offering integrated logistics, manufacturing and foreign trade benefits. The Inland Port comprises a Strategic FTZ, federal customs facilities and rail facility, and is located adjacent to the international airport. Industrial vacancies rose during 2011 to 10% as a result of new construction designed to target new foreign manufacturers in the automotive and electronics sectors. Countering the trend, between 2009 and 2011 industrial lease rates increased 5% to 10%. At the end of 2011, 200,000 SF of industrial facilities were under construction in Castro Del Rio Industrial Park, and 220,000 SF in Leon, STIVA Industrial Park. Lease rates and land values are projected to continue to rise during 2012. Guanajuato’s office market is comprised of low rise, garden office type projects hosting regional Mexican firms and global service providers. Lease rates are stable and not projected to rise in 2012. Only minor construction is projected for the office sector during 2012. The retail sector is comprised of large mixed-use shopping centers located in middle and low income areas. Plaza El Suez in Celaya is the premier power center in the region hosting a Walmart and Cinepolis. Retail lease rates and land values are expected to remain stable through 2012. Guanajuato’s strategic location in Central Mexico and its unique logistics crossroads with multimodal rail and highway intersections not found in other states, make this an attractive market for investors. Guanajuato also has one of the most aggressive state governments offering creative investment incentives for investors. Guadalajara At A Glance RENT/SF/YR doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores deVeloPment land low/acre High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential low High effective avg. Vacancy N/A N/A N/A N/A $ 10.37 $ 15.55 N/A 20.00% $ 8.29 $ 10.37 N/A 25.00% $ 23.50 $ 28.50 N/A N/A $ 19.50 $ 22.00 N/A 20.00% N/A N/A N/A N/A $ 4.15 $ 5.18 N/A 9.00% $ 5.18 $ 6.82 N/A 8.00% $ 11.15 $ 16.72 N/A 2.00% $ 15.00 $ 20.00 N/A 7.00% $ 15.00 $ 20.00 N/A 8.00% $ 15.00 $ 20.00 N/A 2.00% $ 25.00 $ 55.00 N/A 15.00% N/A N/A N/A N/A $ 700.00 $ 1,500.00 $ 250.00 $ 500.00 $ 80.00 $ 150.00 $ 100.00 $ 300.00 $ 350.00 $ 800.00 $ 250.00 $ 750.00 Guanajuato At A Glance RENT/SF/YR low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) $ $ 4.28 4.28 $ 17.15 $ 17.15 $ 10.71 $ 10.71 10.00% 5.00% Class B (Secondary) suburban offIce $ 2.57 $ 8.57 $ 5.57 3.00% New Construction (AAA) Class A (Prime) $ $ 4.28 4.28 $ 17.15 $ 17.15 $ 10.71 $ 10.71 5.00% 5.00% Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ $ 2.57 2.57 5.14 5.57 $ $ $ $ 8.57 3.43 6.00 6.86 $ $ $ $ 5.57 3.00 5.57 6.21 3.00% 13.00% 11.00% 1.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls Solus Food Stores deVeloPment land $ 16.20 $ 15.90 $ 18.60 $ 18.60 N/A low/m 2 $ 29.10 $ 27.50 $ 39.10 $ 39.10 N/A High/m 2 $ 22.65 $ 21.70 $ 29.20 $ 29.20 N/A low/acre 9.00% 8.00% 13.00% 13.00% N/A High/acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ 30.00 $ 50.00 $ 121,405.88 $ 202,343.13 $ 32.00 $ 45.00 $ 129,499.61 $ 182,108.82 $ 32.00 $ 45.00 $ 129,499.61 $ 182,108.82 $ 30.00 $ 50.00 $ 121,405.88 $ 202,343.13 $ 120.00 $ 380.00 $ 485,623.52 $1,537,807.81 $ 150.00 $ 60.00 $ 607,029.40 $ 242,811.76 2012 Global Market Report n www.naiglobal.com 72
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2012 Global Market report Values, t
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n n n table of contents General Inf
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Global Outlook US Year in Review As
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On the Road to Recovery % of Loss S
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55% (1.1 million) owning and 45% (8
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short-term leases, the multifamily
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Alberta is home to Canada’s oil a
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Office The sovereign debt crisis an
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Area Type Q1 2010 Q2 2010 Q3 2010 Q
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obust telecom infrastructure and av
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Page 27 and 28: n us Highlights - midwest region n
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Page 31 and 32: Adelaide, Australia Brisbane, Austr
Page 33 and 34: Sydney, Australia Beijing, China Co
Page 35 and 36: Shanghai, China Shenzhen, China Con
Page 37 and 38: Chennai, India Mumbai, India Contac
Page 39 and 40: Jakarta, Indonesia Tokyo, Japan Con
Page 41 and 42: Christchurch, New Zealand Wellingto
Page 43 and 44: Taipei, Taiwan Ho Chi Minh City, Vi
Page 45 and 46: Calgary, Alberta, Canada Edmonton,
Page 47 and 48: Halifax, Nova Scotia, Canada Ottawa
Page 49 and 50: Regina, Saskatchewan, Canada Contac
Page 51 and 52: The Baltics (Latvia/Estonia/Lithuan
Page 53 and 54: Helsinki, Finland Paris - lle de Fr
Page 55 and 56: Tel Aviv, Israel Almaty, Kazakhstan
Page 57 and 58: Amsterdam, The Netherlands Oslo, No
Page 59 and 60: Moscow, Russia St. Petersburg, Russ
Page 61 and 62: Madrid, Spain Stockholm, Sweden Con
Page 63 and 64: Istanbul, Turkey Kiev, Ukraine Cont
Page 65 and 66: Leeds, England, United Kingdom Lond
Page 67 and 68: Latin America sectIon contents Buen
Page 69 and 70: Rio de Janeiro, Brazil Sao Paulo, B
Page 71: San Jose, Costa Rica Contact NAI Co
Page 75 and 76: Mexico City, Mexico Contact NAI Mex
Page 77 and 78: Saltillo, Coahuila, Mexico San Luis
Page 79 and 80: Lima, Peru Caracas, Venezuela Conta
Page 81 and 82: Birmingham, Alabama Huntsville/Deca
Page 83 and 84: Little Rock, Arkansas Bakersfield,
Page 85 and 86: Oakland, California Orange County,
Page 87 and 88: San Francisco, California Ventura C
Page 89 and 90: Hartford, Connecticut Wilmington, D
Page 91 and 92: Fort Lauderdale, Florida Ft. Myers/
Page 93 and 94: Miami, Florida Ocala/Gainesville, F
Page 95 and 96: Tampa Bay, Florida Atlanta, Georgia
Page 97 and 98: Boise, Idaho Southeast (Idaho Falls
Page 99 and 100: Fort Wayne, Indiana Indianapolis, I
Page 101 and 102: Des Moines, Iowa Sioux City, Iowa C
Page 103 and 104: Baton Rouge, Louisiana Lake Charles
Page 105 and 106: Greater Portland, Maine Baltimore,
Page 107 and 108: Greater Springfield, Massachusetts
Page 109 and 110: Minneapolis/St. Paul, Minnesota Jac
Page 111 and 112: Billings, Montana Bozeman, Montana
Page 113 and 114: Omaha, Nebraska Las Vegas, Nevada C
Page 115 and 116: Portsmouth, New Hampshire Atlantic
Page 117 and 118: Ocean/Monmouth Counties (“Shore M
Page 119 and 120: Las Cruces, New Mexico Albany, New
Page 121 and 122: Westchester, New York Asheville, No
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Raleigh/Durham, North Carolina Farg
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Cincinnati, Ohio Cleveland, Ohio Co
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Oklahoma City, Oklahoma Tulsa, Okla
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Berks County, Pennsylvania Bucks Co
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Philadelphia, Pennsylvania Philadel
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Sioux Falls, South Dakota Chattanoo
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Memphis, Tennessee Nashville, Tenne
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Corpus Christi, Texas Dallas, Texas
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Houston, Texas Contact NAI Houston
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Salt Lake City, Utah Washington Cou
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Northern Virginia Seattle/Puget Sou
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Madison, Wisconsin Milwaukee, Wisco
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n Glossary n Acre Area of land equa
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