Mexico City Office Market Overview
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<strong>Mexico</strong> <strong>City</strong><br />
<strong>Office</strong> <strong>Market</strong> <strong>Overview</strong><br />
Q4 2015
<strong>Mexico</strong> <strong>City</strong> A+&A <strong>Office</strong> <strong>Market</strong><br />
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Key Facts<br />
Founded 1978<br />
<strong>Office</strong>s 75<br />
<strong>Market</strong> Locations 59<br />
Real Estate Professionals 2,100+<br />
Brokers 800+<br />
<strong>Mexico</strong> <strong>City</strong> <strong>Office</strong><br />
Submarkets<br />
CBD<br />
Lomas Palmas<br />
Polanco<br />
Reforma<br />
SBD<br />
Bosques<br />
Interlomas<br />
Lomas Altas<br />
Santa Fe<br />
ABD<br />
Insurgentes<br />
Norte<br />
Periférico Sur<br />
Economic Indicators<br />
Total Population (<strong>Mexico</strong>)<br />
2014 119 million<br />
2015 122 million<br />
GDP<br />
2014 2.6%<br />
2015 2.5%<br />
<strong>Mexico</strong> Unemployment Rate<br />
2014 4.3%<br />
2015 4.6%<br />
<strong>Mexico</strong> <strong>City</strong><br />
GDP vs Gross Absorption<br />
Service Offerings<br />
Transaction Services<br />
Consulting & Advisory Services<br />
Financial Services<br />
Management Services<br />
<strong>Mexico</strong> <strong>City</strong> A+&A <strong>Office</strong> <strong>Market</strong> Analysis<br />
CBD<br />
SBD<br />
Inventory<br />
2015<br />
Deliveries<br />
2016e<br />
Deliveries<br />
Fourth Quarter 2015<br />
2017e<br />
Deliveries<br />
Projected<br />
2,163,124 281,598 13.6% 181,500 $31.2 231,630 253,350 115,882 580,779<br />
1,597,344<br />
Availability<br />
Vacancy<br />
Rate<br />
Gross<br />
Absorption<br />
USD / m2 /<br />
month<br />
Activity Under Construction<br />
58,929 3.7% 72,200 $24.5 - 83,349 66,419 286,584<br />
ABD 1,290,250 141,472 11.0% 211,400 $25.0 159,744 319,692 203,142 510,069<br />
Corporate Services<br />
Total 5,051,417<br />
481,998<br />
9.5% 465,100 $28.4 391,404 656,481 385,443 385,443<br />
Research & Client Services<br />
*Data in square meters
<strong>Mexico</strong> <strong>City</strong> <strong>Market</strong> <strong>Overview</strong> (A&A+ <strong>Office</strong> <strong>Market</strong>)<br />
• The total A+ & A office inventory in <strong>Mexico</strong> <strong>City</strong> reached 5.05 million square meters within its 10 class A&A+ office submarkets.<br />
• In 2015 we saw an increase of 27% in available space compared to 2014 year end.<br />
Average Asking Rent USD / sq m / month<br />
• The average rental prices ranged between $ 22.5 and $ 32.1 (USD / sq m / Month).<br />
• The Norte corridor showed the lowest average price, while the Lomas Palmas submarket represented the highest.<br />
• The year closed with more than 464 thousand sq m absorbed in the 10 submarkets, of which Insurgentes and Reforma accounted for 42% of the total.<br />
• During 2015 they were integrated to the total inventory almost 400 thousand square meters and it is expected that during 2016, more than 650 thousand sq m<br />
complete its construction.<br />
• The Insurgentes corridor showed the most dynamism in new construction with more than 235 thousand sq m scheduled to be delivered within the next three<br />
years.<br />
• The Bosques, Interlomas and Lomas Altas submarkets have shown no increase in their total inventories over the years.<br />
Overall Vacancy Rate<br />
• More than 1.3 million sq m are under design.<br />
• The vacancy rate at the end of 2015 was 9.5% (482,000 sq m)<br />
Notable 2015 Lease Transactions<br />
Tenant<br />
Building<br />
Submarket<br />
Sq. Mt. Lease Type Qtr.<br />
At&T<br />
Torre Diana<br />
Reforma 31,000 Prelease 4th<br />
AXA Seguros Corp. Félix Cuevas Insurgentes 24,000 Relocation 2nd<br />
SENASICA Periférico 5010 Periférico Sur 21,600 Relocation 4th<br />
Alsea Gran Patio Revolución Periférico Sur 16,500 Relocation 2nd<br />
Historical Gross Absorption<br />
Comision Reguladora de Energía Element Corporativo Periférico Sur 12,200 Relocation 4th<br />
Merck, Sharp & Dohme Centro Corp. San Ángel Periférico Sur 8,600 Renewal 2nd<br />
IXE Torre Mayor Reforma 7,300 Renewal 4th<br />
Afore XXI Banorte Anexo Torre Mayor Reforma 7,000 Renewal 4th<br />
ICA Fluor Daniel Metrópoli Patriotismo II Insurgentes 6,500 Relocation 4th
<strong>Mexico</strong> <strong>City</strong> <strong>Office</strong> <strong>Market</strong> Statistics 4Q2015<br />
<strong>Mexico</strong> <strong>City</strong><br />
Fourth Quarter Totals<br />
Inventory<br />
5,051,417<br />
Vacancy<br />
9.5%<br />
Inventory<br />
1,597,344<br />
SBD<br />
Vacancy<br />
3.7%<br />
Inventory<br />
2,163,824<br />
CBD<br />
Vacancy<br />
13.0%<br />
Inventory<br />
1,290,250<br />
ABD<br />
Vacancy<br />
11.0%
CBD <strong>Office</strong> <strong>Overview</strong> 4Q2015<br />
Average Asking Rent<br />
Class A+ & A<br />
Historical Vacancy Rate<br />
Class A+ & A<br />
Historical Gross Absorption<br />
Class A+ & A<br />
Notable 2015 Lease Transactions (sq m)<br />
AT&T<br />
Torre Diana<br />
30,800 Prelease<br />
IXE<br />
Torre Mayor<br />
7,300 Renewal<br />
Year-to-Year <strong>Market</strong> Indicators<br />
Afore XXI<br />
Anexo Torre Mayor<br />
AON<br />
Torre Diana<br />
JP Morgan<br />
Torre Óptima I<br />
7,000 Renewal<br />
6,300 Prelease<br />
5,700 Renewal<br />
Submarket Inventory Construction Pipeline Vacancy Rate Absorption Average Asking Rent<br />
Construction Activity<br />
2013 2014 2015 2016e 2017e<br />
CBD By Numbers<br />
Total Inventory Vacancy Rate Average Asking Rent<br />
Lomas Palmas 26,000 71,500 6,500 7,200 18,000<br />
Polanco 88,000 179,000 55,000 94,000 71,000<br />
Reforma 60,000 - 170,000 152,000 27,000<br />
Total 174,000 250,000 232,000 253,000 116,000<br />
2014 2015<br />
2014 2015 2014 2015<br />
Lomas Palmas 601,847 614,605 8.4% 10.1% $33.5 $32.1<br />
Polanco 868,356 923,080 8.0% 9.4% $33.6 $31.0<br />
Reforma 454,146 626,139 11.9% 21.2% $32.7 $30.5<br />
Total 1,924,349 2,163,824 9.4% 13.6% $33.3 $31.2<br />
Buildings under Construction<br />
Torre Diana 64,000 sqm - Torre Reforma 40,000 sqm - Torre<br />
Cuarzo 40,000 sqm - Miyana Phase I 38,000 sqm - Bayer 34,000 sqm<br />
<strong>City</strong>Zite Polanco 32,000 sqm - LatitudPolanco 29,000 sqm -<br />
Chapultepec UNO 27,000 sqm - CS169 19,000 sqm - Palmas 781<br />
18,000 sqm - Torre Concreta 11,000 sqm
SBD <strong>Office</strong> <strong>Overview</strong> 4Q2015<br />
Average Asking Rent<br />
Class A+ & A<br />
Historical Vacancy Rate<br />
Class A+ & A<br />
Historical Gross Absorption<br />
Class A+ & A<br />
Notable 2015 Lease Transactions (sq m)<br />
Bimbo<br />
Opción Santa Fe II<br />
4,500 Relocation<br />
Banco Santander<br />
CEO Corporativo<br />
4,100 Expansion<br />
Year-to-Year <strong>Market</strong> Indicators<br />
Amazon<br />
Blu Corporativo<br />
Acciona<br />
Euro+Ten<br />
BNP Paribas<br />
Torre Óptima I<br />
3,700 Relocation<br />
3,500 Relocation<br />
3,100 Renewal<br />
Submarket Inventory Construction Pipeline Vacancy Rate Absorption Average Asking Rent<br />
Construction Activity<br />
2013 2014 2015 2016e 2017e<br />
SBD By Numbers<br />
Total Inventory Vacancy Rate Average Asking Rent<br />
Bosques - - - - -<br />
Interlomas 16,300 7,000 - - -<br />
Lomas Altas 13,800 - - - -<br />
Santa Fe 101,500 37,000 - 83,500 66,500<br />
2014 2015<br />
2014 2015 2014 2015<br />
Total 131,600 44,000 - 83,500 66,500<br />
Bosques<br />
299,396 299,396 3.9% 3.5% $24.9 $28.2<br />
Interlomas<br />
99,935 99,935 6.2% 2.1% $21.7 $22.5<br />
Lomas Altas 85,692 85,692 3.5% 16.6% $22.0 $24.0<br />
Santa Fe<br />
1,112,321 1,112,321 5.8% 2.9% $23.0 $23.4<br />
Total 1,597,344 1,597,344 4.8% 6.3% $22.9 $24.5<br />
Buildings under Construction<br />
DownTown Santa Fe III 26,000 sqm - Quad Torre II 21,500<br />
sqm - DownTown Santa Fe I 21,400 sqm - Corporativo Corner<br />
19,100 sqm - The Point 19,000 sqm - Prolongación Reforma 627<br />
14,400 sqm - Quad Torre I 11,000 sqm - Vasco de Quiroga 621<br />
7,800 sqm - Corporativo Vista Hermosa 5,600 sqm - Santa Fe<br />
Hills 4,100 sqm
ABD <strong>Office</strong> <strong>Overview</strong> 4Q2015<br />
Average Asking Rent<br />
Class A+ & A<br />
Historical Vacancy Rate<br />
Class A+ & A<br />
Historical Gross Absorption<br />
Class A+ & A<br />
Notable 2015 Lease Transactions (sq m)<br />
AXA Seguros<br />
Corporativo Félix Cuevas<br />
24,000 Relocation<br />
SENASICA<br />
Periférico 5010<br />
21,600 Relocation<br />
Year-to-Year <strong>Market</strong> Indicators<br />
Submarket Inventory Construction Pipeline Vacancy Rate Absorption Average Asking Rent<br />
Alsea<br />
Gran Patio Revolución<br />
Comisión Reguladora de Energía<br />
Element Corporativo<br />
Merck, Sharp & Dohme<br />
Centro Corp. San Ángel<br />
Construction Activity<br />
16,500 Relocation<br />
12,200 Relocation<br />
8,600 Renewal<br />
2013 2014 2015 2016e 2017e<br />
Insurgentes 113,000 66,500 93,100 99,400 135,700<br />
SBD By Numbers<br />
Total Inventory Vacancy Rate Average Asking Rent<br />
2014 2015<br />
2014 2015 2014 2015<br />
Insurgentes 565,849 658,951 7.4% 8.9% $25.7 $26.5<br />
Norte<br />
197,619 239,369 12.1% 21.0% $20.3 $22.5<br />
Periferico Sur 365,401 391,930 14.5% 8.3% $23.7 $25.9<br />
Total 1,128,869 1,290,250 11.3% 12.7% $23.2 $25.0<br />
Norte 32,500 24,400 41,800 130,600 -<br />
Periférico Sur - 18,500 24,900 89,800 67,400<br />
Total 145,400 109,500 159,800 319,700 203,100<br />
Buildings under Construction<br />
Toreo Torres B y C 67,600 sq m - Toreo Torre A 62,900 sq m<br />
Gran Patio Revolución 60,000 sq m - Torre Manacar 46,000 sq m<br />
Carracci 44,000 sq m - Corporativo Jaime Nuno 28,000 sq m<br />
Insurgentes 929 - 26,500 sq m - IS 1431 25,000 sq m - Corp.<br />
Pedregal 3042 22,000 sq m - Torre Boston 21,500 sq m<br />
Insurgentes 700 15,000 sq m - Torre Evolución 12,400 sq m
avisonyoung.com<br />
© 2016 Avison Young <strong>Mexico</strong><br />
E. & O.E.: The information contained herein was obtained from sources which we deem<br />
reliable and, while thought to be correct, is not guaranteed by Avison Young.<br />
Acknowledgement: Data for graphs, charts and tables used in this report are sourced from<br />
Avison Young and Altus InSite. Some of the data in this report has been gathered from third<br />
party sources and has not been independently verified by Avison Young. Avison Young<br />
makes no warranties or representations as to the completeness or accuracy thereof.<br />
For more information on this report, please contact Avison Young:<br />
Tania Sánchez<br />
<strong>Market</strong> Research Director México<br />
Avison Young México<br />
Prolongación Paseo de la Reforma<br />
No. 1015 Piso 4 Torre A Santa Fe<br />
T 55.4123.7576 M 55.4835.1720
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