Q1 2012 | OFFICE
LIMA
RESEARCH & FORECAST REPORT
CURRENT OUTLOOK With vacancy levels of just over 1%, placements in the prime office market in Lima mainly involve product not yet in existence (in the design or construction stage). Thus, the buildings that entered the market during the first quarter of 2012, and contributed 23,400 sqm to the prime office buildings inventory, came with a 95% occupancy rate, as most of the marketing was carried out during the launching and construction process. In addition, the new buildings which entered the market during the first quarter 2012 are located in the East area (Omega and Gerens) and in Sanhattan (EC Arona).
INDICATORS PRIME MARKET Q4-2011
Q1-2012
VACANCY RATE NET ABSORPTION NEW SUPPLY RENTAL PRICE
INDICATORS B+ MARKET Q4-2011 VACANCY RATE NET ABSORPTION RENTAL PRICE
Q1-2012
Accordingly, the prime office market in Lima, at the end of Q1-2012, has a total inventory of 459,630 sqm, distributed in 48 buildings. The current availability in existing buildings is 7,680 sqm which is equivalent to 1.7% of total inventory and has decreased by 1% in respect of the vacancy at the end of 2011, which stood at 2.7%. The rental prices of the available supply in existing buildings have increased on average by US$ 1/sqm. Currently the average rental price, in prime buildings, stands at US$ 19.93/sqm/month, plus tax, while this value was US$ 18.92 / sqm in the previous period. In the quarter under review there was no offer to sell in existing buildings. These are list values or “asking prices”. With regard to the available supply in the design stage and/or under construction, the average rent value is US$ 21.45/sqm/
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month, with an average of US$ 21.52/ sqm/month for A+ buildings, and an average US$ 21.20/sqm/month for A buildings. The values found range from US$ 19.50 to US$ 22.00. The average selling price is US$ 2,226/sqm. These are list values or “asking prices”. There is currently 102,800 sqm of prime office space under construction in Lima, distributed in 8 buildings. It is estimated that these areas will enter the market during 2012 and 2013 (4 in Sanhattan, 3 in the East area and 1 in San Isidro Golf). Likewise, there are 6 prime building projects to be developed until 2014. These projects amount to 152,300 sqm and will be located in the East area (3 buildings) and in San Isidro Golf (3 buildings). In the B+ buildings segment, during Q12012, the Torre Alpha (East area) and the Dean Valdivia (Sanhattan) buildings entered the market, bringing the total inventory or stock of B+ office space to 186,614 sqm. The current vacancy in this sector is 7,494 sqm (4% of the stock), and the average rental price is US$ 17.8/sqm/ month.
THE KNOWLEDGE REPORTREPORT | Q1 2012 OFFICE RESEARCH & FORECAST | Q1 |2010 | RESIDENTIAL | DIVISION NAME
Prime Office Market Summary - Q1 2012 Stock or Inventory (sqm)
Submarket
Number of buildings
Vacancy (sqm)
Vacancy Rate (%)
Net Absorption
Rental Rate
(sqm)
(US$ / sqm / month)
A+
A
A+
A
A+
A
A+
A
A+
A
A+
A
Sanhattan
125,450
91,125
8
9
4,463
989
3.6%
1.1%
2,794
4,943
19.97
20.00
San Isidro Golf
15,446
55,250
3
9
0
0
0.0%
0.0%
998
0
-
-
Miraflores
42,983
7,864
3
2
0
0
0.0%
0.0%
0
0
-
-
East
65,110
56,402
7
7
2,103
126
3.2%
0.2%
0
18,948
-
18.00
Subtotal
248,989
210,641
21
27
6,566
1,114
2.6%
0.5%
3,792
23,891
19.97
19.77
Total
459,630
48
7,680
1.7%
27,684
19.93
The values are asking prices on existing available spaces.
STANDARD TERMS & DEFINITIONS
Stock Evolution by Number of Prime Buildings
Prime Market: the market consisting of A and A+ class office buildings. Stock or Inventory: amount of square meters that are finished, delivered and operating in the market. Future Supply: amount of square meters being built, or in the project stage, yet to be delivered to the market. Absorption: amount of square meters that is occupied during a specific time frame (month, trimester, year). Vacancy: amount of square meters that is available for lease or sale.
Year
Submarket
Total
Actual
2012
2013
2014
Sanhattan
17
2
2
0
21
San Isidro Golf
12
1
3
0
16
Miraflores
5
0
0
0
5
East
14
1
2
3
20
Total
48
4
7
3
62
B+ Office Market Summary - Q1 2012 Submarket
Stock (sqm)
Number of Buildings
Vacancy (sqm)
Vacancy Rate (%)
Net Absorption
Rental Rate (US$ / sqm /
(sqm)
month)
Sanhattan
80,804
12
1,178
1.5%
709
18.4
Vacancy Rate: percentage of square meters of the Stock available for lease or sale.
San Isidro Golf
68,102
11
0
0.0%
404
-
Miraflores
17,397
3
2,045
11.8%
1,364
16.0
East
20,310
4
4,271
21.0%
464
18.2
Asking Price: price at which an office is offered in the market and is open for negotiation.
Total
186,614
30
7,494
4.0%
2,940
17.8
ATE
Closing price: price at which a lease or sale transaction of an office is settled. LA VICTORIA SAN LUIS
Av. Javier
LINCE SAN ISIDRO
blica
Submarkets - Lima
Repú Paseo de La
MIRAFLORES
SAN BORJA
Av. Angam os SURQUILLO Av. Be na vi
LA MOLINA ic ana Sur Panam er
MAGDALENA
Prado
SURCO
des
SANHATTAN SAN ISIDRO GOLF MIRAFLORES
BARRANCO
EAST MAIN ROADS
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SAN JUAN DE MIRAFLORES
VILLA MARÍA DEL TRIUNFO
THE KNOWLEDGE REPORT
| Q1 2012RESEARCH | OFFICE & FORECAST REPORT | Q1 2010 | RESIDENTIAL | DIVISION NAME
Vacancy rate by class - Prime Market
SUPPLY
20% 15% 10% 5% 0% 2006
2007
2008
2009
A+
2010
A
2011
2012(ytd)
Total
At the end of the first quarter of 2012 the total inventory or stock of prime office space (A + and A) was 459,630 sqm. During this period the EC Arona (in the Sanhattan area) and the Gerens and Omega (in the East area) buildings entered the market. This meant an increase 23,400 sqm in the total inventory of prime office space of. However, the available supply or vacancy rate with which these three buildings entered is only 5%, as the rest was placed during the launching and construction process. The current vacancy rate in the prime office market is 1.7% of the total inventory or stock, which is equivalent to 7,680 sqm.
Monthly rent rate by class - Prime Market
At the end of 2011, this indicator was at 2.7%.
22.00 20.00 18.00
DEMAND
16.00 14.00 12.00 10.00 2006
2007
2008
2009
2010
A+
A
Total
2011
2012(ytd)
During the first quarter of 2012 the gross absorption, or total occupied space, was 28,314 sqm, of which the net absorption was of 27,684 sqm. In this analysis, the occupation of the three buildings that entered the market during this period was also considered. In this scenario, the areas that had the greatest activity were the East area with approximately 19,000 sqm marketed, and then the Sanhattan submarket with more than 8,000 sqm marketed. In the San Isidro Golf area approximately 1,000 sqm of prime office space was marketed.
Net Absorption by year - Prime Market
100,000 80,000 60,000 40,000
PRICES
20,000 0 2006
2007
2008
2009
Net Absorption
2010
2011
2012(ytd)
Growing Tendency
The average monthly rent in existing buildings at the end of Q12012 in the prime office sector is US$ 19.93/sqm/month, with the value for class A+ buildings being US$ 19.97/sqm/month, and for Class A buildings, US$ 19.97/sqm/month. As for the marketing of prime buildings in the design and/or construction phase, the average rent is US$ 21.45/sqm/month, with an average of US$ 21.52/sqm/month for A+ buildings and an average US$ 21.20/sqm/month for A buildings.
Net Absorption by year (A+ & A class)
100,000
In the case of sales, the average observed price of prime buildings is US$ 2,227/sqm (US$ 2,226/sqm for A+ buildings and US$ 2,230 sqm for A buildings). Values are within the range from US$ 1,850/sqm to US$ 2,500/sqm.
80,000 60,000 40,000 20,000 0 2006
2007
2008 A+
2009
2010
2011
2012(ytd)
A
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THE KNOWLEDGE REPORT
| Q1 2012RESEARCH | OFFICE & FORECAST REPORT | Q1 2010 | RESIDENTIAL | DIVISION NAME
Transactions by area range - Prime Market
11%
SUPPLY AND DEMAND ANALYSIS 25% 0 - 250 251 - 500
There is currently available in the prime market of Lima 7,680 sqm in existing buildings. 71% of this availability or vacancy is in the Sanhattan area, while 29% is located in the East area. There has been no availability in the Miraflores and San Isidro Golf submarkets.
501 - 1,000 1,001 - 3,000 3,000 ++
Of the total vacancy, 85% (6,566 sqm) corresponds to A+ buildings while 15% (1,114 sqm) is found in Class A buildings. It should be noted that the currently available spaces are spread over 5 buildings, and therefore no large spaces are to be found in any building.
64%
The demand analysis allows us to observe that the highest percentage (64%) of transactions involved offices with areas between 251 sqm and 500 sqm, while 25% of transactions conducted were for offices of up to 250 sqm. The remaining 11% of transactions that took place involved offices with areas between 501 sqm and 1,000 sqm
Amount of sqm sold or leased by submarket - Prime Market
30,000
B+ OFFICE MARKET
24,000 18,000
During the first quarter of 2012 two new B+ buildings entered the market. In the East area the Torre Alpha building, and in the Sanhattan area the Dean Valdivia building, both marketed by Colliers. Thus the total inventory was increased by 4,200 sqm.
12,000 6,000 0 SH
SIG
MIR
EAST
At the end of this period, in the B+ office sector the total space stock or inventory was 186,614 sqm, which is distributed in 30 buildings. The current vacancy is 7,494 sqm, which corresponds to 4% of total inventory. This indicator at the end of the previous quarter was at 3.4%.
Current vacancy rate by submarket - Prime Market
The current availability is concentrated in the East area or submarket with 57% of total supply (4,271 sqm), while in the Miraflores area there is 27% of the available supply (2,045 sqm). The remaining 16% of the supply is in the Sanhattan submarket (1,178 sqm). The average rent in the B+ office sector of Lima is at US$ 17.8/ sqm/month, while at the end of the previous period the average rent was US$ 17.4/sqm/month.
East, 29%
Sanhattan, 71%
It should be noted that the indicated values refer to list prices or “asking prices� and that the respective taxes must be added.
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THE KNOWLEDGE REPORT
| Q1 2012RESEARCH | OFFICE & FORECAST REPORT | Q1 2010 | RESIDENTIAL | DIVISION NAME
FORECAST The expansion of the prime office market in Lima is associated with large developments. This involves buildings with useful areas (offices) greater than 20,000 sqm, implementation of the latest technology, major shopping areas, LEED certification, among other features that will hopefully meet the expectations of the demand in the sector. This supply includes projects such as Lima Central Tower (Inmobiliari), Park Office La Molina (Penta Realty), Panorama (Grupo Lander), HSBC and Pardo y Aliaga (Cúbica), and Las Orquídeas (Palos Verdes) which together total more than 170,000 sqm in offices. On the marketing side, a larger amount of space for sale is noted, a product which is attractive to the end user as well as to potential investors. This situation, until recently, was seen most clearly in the B+ office segment, and now it has also become important in prime buildings. With the vacancy rates estimated for this year, it is certain that the greatest dynamic in the sector will continue to be shown in projects in the launching (pre-sale/pre-rental) and construction phase, and this according to the “appetite” of available demand, which contrary to what some may believe, is made up mostly of local companies or companies already present in our market, which have grown and are now looking for better work places, and thus contribute to the better performance and quality of life for their employees.
522 oficces in 62 countries in 6 continents • $1.8
billion annual income
million square meters under management
• 116.13
• 12,300
professionals
PERÚ: Lima Eric Rey de Castro Managing Director Av. San Borja Norte 793 San Borja, Lima 41 TEL 511 224 0804 FAX 511 224 0505
New building projects are encountering difficulties in their development, starting with the cost of land, which has reached unimaginable speculative levels, in traditional corporate areas. Is this the time to generate new development poles in the city?
RESEARCHER: Lima Sandro Vidal Crovetto Knowledge Manager Av. San Borja Norte 793 San Borja, Lima 41 TEL 511 224 0804 FAX 511 224 0505
Inventory and under construction projects / sqm prime market
300,000 250,000
37,151 14,460
200,000 31,888
150,000
15,353 100,000
216,576 3,905
50,000
70,696
121,512
This report has been prepared by Colliers International Peru for general information only. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers International does not guarantee, warrant or represent that the information contained in this document is correct. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This report and other research materials may be found on our website at www.colliers.com.pe. Colliers Macaulay Nicolls Inc. and its country subsidiaries are member firms of Colliers International Property Consultants, an affiliation of independent companies with over 294 offices throughout more than 61 countries worldwide.
50,847
0 Sanhattan
San Isidro Golf
Inventory
Under construction 2012
Miraflores
East
Under construction 2013
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