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BogotáOffice ReMid-Yea

conomic Out

he Colombian ece expansion ofternal demand etween 2.5-5% at this trajectory

he Santos admivestment and dolombia’s relianroductive Tranartnerships amoromote developonstruction, androng, continuousf trade liberalizaecently-signed Fnticipated agreeacific Alliance, s

flation has remaressure expecteas lowered its pvestment in theurrency caused bs it continues tdirect price incr012 to Q1 2013ectors as stakeh

conomic Data *

opulation - Colomopulation - Bogotánemployment Rat013 GDP Forecas-o-Y GDP Growth DP per capita (USoY Inflation (%) arket Interest Ratexchange Rate (CO

á, Coloeport r 2013

tlook

conomy has conf the oil and mand investmentdating back to

y should continue

nistration’s primdevelopment in nce on commodsformation Proong the privatement in infrastr technological is flows of foreigation policies toFree Trade Agements with Sohould facilitate t

ained within the ed in the short- policy interest ra midst of stagnaby booming oil ato hurt agricultreases; exports . This has led olders call for th

bia (Millions) á (Millions) e (%) t (Billions of US$) (%)

S$) – PPP

e (%) OP per US$)

Source: G

ombia

ntinued to perforining sectors ant. Y-o-Y GDP early 2012, and

e at least throug

me economic inithigh value-add

dities. The pillogramme - foe, public, and ructure, agricultinnovation. Thin direct investmo access new reement with t

outh Korea, the hese objectives.

target range at or medium-term

ate from 4.25% ant export dema

and mining expoural and manuhave reportedlyto unrest and me government to

Global Insight Coun

a

rm well in 2013, nd buoyed by s growth has hod projections inh the next few y

iative is to incened sectors to rar of this plan ocuses on cracademic sectoture, mining, hois implies a nee

ment and a broadpools of capita

the US, as we EU, Israel, an.

2.5% with no um. The Centralto 3.25% to stimand. An apprecrts is causing cofacturing expor

y fallen 9.5% fromass protests in o take action.

8

ntry Intelligence (2

A

led by strong overed dicate

years.

ntivize reduce - the eating ors to ousing ed for dening al. A ell as

nd the

pward Bank mulate ciating oncern rts via om Q1 these

The hthe Fas foagreewide-arme

Mark

The odomethe gprojeofficeproduamenownelong-

Annuthe 5of cosignifsimplQ1 of

The icode of thesociodevedirectcommthrou

Bogo

48.2 7.9

11.2 386 4.0

8,016 2.5 3.25

1,880

2013)

 

Americas

hot topic in ColoFARC and what r the Santos adement by the se-reaching implica

ed groups have e

ket Summary

office market inestic demand, fugrowing presencects to finance. e market (as wucts into the manities. Bogotá ership structures-term as the mar

ual office produc5th straight year, orporate quality ficant annual conly a coincidencef 2014, thus ren

issue that every that mayor Pete proposed ordinoeconomic stralopment in higtly or indirectlymercial projects,ughout the city.

otá Office Mark

s Research

ombia continuesthis will mean foministration. If telf-imposed Augations for improexpressed intere

y

n Bogotá continurther enabled bce of internatioThese funds ar

well as industriaarket that complis still dominat

s; however this rket continues to

ction looks set tolikely reaching 1offices to 1,580ntribution, it is th

e as a handful ofdering annual to

yone is watchingtro hopes to pasnance is to betteata by encogh-income neighy on developers the policy could

ket Map  

h

s to be the peacor the security ethe parties succgust 2014 deadving the security

est in participatin

ues to expand by a wider availaonal real estate re driving the tral and retail) byy with internatioted by pre-salecould change in

o mature and attr

o surpass the 10125,000 m2 and 0,000 m2. Whilehe lowest total sf large propertiesotals deceptive.

g is the proposess in the next yeer integrate the curaging low-inhborhoods. Bs of high-incomd restrict supply

e negotiations wnvironment as w

ceed in reachingdline, it could hay situation as otng.

with the growthability of credit a funds looking ansformation of y introducing monal standards as and condo-st

n the medium- aract foreign capi

00,000 m2 mark pushing total sto

e this representsince 2008. Thiss will be finished

ed citywide zonear. The objectcity’s highly dividncome residenBy imposing taxme residential a and drive up re

with well an ave her

h in and for the ore and tyle and tal.

for ock s a

s is d in

ing tive ded ntial xes and nts

  

D

Decoprlaintbu

Ab13vanothdewianNowh

S

Pr8820suDesnfobu

Demand

emand continueompanies are oresence of stratarge spaces becato small piecesuildings rent larg

bsorption registe35,000 m2 by thacancy and highowhere to go ane next few emonstrating theill continue to shnd more tenantsorte but are lookhere commutes

upply

roduction in the8,000 m2 to be 012, Chicó (40ubmarkets with espite high densnatch up lots for llowing graph, suildings in Chic

es to be strongoften stifled duea-title buildings mause most builds. Additionallyge spaces to only

ered only 35,000he end of 2013 demand, many

nd are keeping ayears. “Other”

e highest absorphow strong absos are reluctant toking for somethi can be difficult a

e first half of 20delivered in the0,000 m2) and

the highest cosity and high pr commercial devsmall lots and

có and consequ

g in Bogotá; hoe to the limitedmakes it difficultdings have been, many of the y a few compani

0 m2 in the first 3, falling to a 5 companies whoan eye on proje” (particularly

ption rates in theorption in the yeo pay the high ing closer to theand amenities no

013 reached 37e second half of Salitre (29,00

oncentration of ices in Chicó, dvelopment. Howheight restrictio

uently the avera

owever office sed supply. Thet to find and negn pre-sold and d

simplified ownies.

half and should 5-year low. Wito want to expandects to be delive

the Northwese first half of 201ars to come, asrents demandede CBD than El Sot as abundant.

,000 m2 with anf the year. Sim00 m2) are theproduction this evelopers contin

wever, as shown ns limit the sco

age rentable are

eeking e high gotiate divided ership

reach th low d have ered in st) is 3 and

s more d in El Salitre,

nother milar to

e two year. nue to in the ope of ea for

projeofficedecerecog– arepipeligrow

Produattemofficebetwe“Othe

Vaca

The semeat its in offofficedemaa buexpecnext t

Vacaone bhigheevery

ects here is a mee projects in ntralized Northwgnizable deliveriee located in the ine here, this sing segments of

uction should pimpts to keep up e projects, the ceen 2014 and er,” and 45% com

ancy

vacancy rate ester ago and do lowest point sinfices smaller thaes larger than 5and leaves manyilding under cocted in 2014 andtwo years.

ancy is highest inbuilding. Of the est in El Salitre (ywhere else.

Jones Lang LaSalle

ere 4,000 m2. Al“Other,” which

west sector of es – Titan Plaza Northwest. Assector is and isf the city.

ick up over the with demand. Acity should see 2015 with 55%ming in El Norte

currently standown from 6% a ynce 2008. Mostan 300 m2, whi

500 m2. This dy companies witnstruction. Givd 2015, vacancy

n the “Other” sub consolidated off(11%) and Santa

e – Pulse – Bogotá Offic

so noteworthy ish consists mai the city. Twa and Centro Ems several more s going to be o

next two years Assuming the timthe delivery of

% of this coming.

ds at 4.9%, doyear ago. The ct of the availableile there is a gr

disconnection beth no other optioven the boost iny should pick up

bmarkets, thougfice submarkets,a Barbara (4.5%

ce Market – Mid-Year 2

s the emergenceinly of the vao of 2013’s m

mpresarial Colpaprojects are in one of the fast

as the supply smely completionabout 375,000

g in El Salitre a

own from 5.1%city vacancy ratee area is containrowing demand etween supply aon than to pre-lean office productp modestly over

h most of this is , vacancy is ), and below 4%

2013

e of ast, ost tria the test

ide n of m2

and

% a e is ned for

and ase tion the

in

% in

P

ReChCOcodepr(U$4(Ude

M

ThmcoinvshfePazoefofbe

DesemindofcacoPlCoDethth

rices

ents are growinhicó, and SantaOP $65,000-$85onfluence of faesirability, and lrices have remaUSD $25-35). S4,000-7,000/m2) USD $3,000-5,00epending on the

Market Outloo

he outlook in Bacroeconomic i

onsumer brandsvestment funds hould intensify alt more and moacific Alliance (Moning laws and ffect; the most ffice constructioneginning to see.

evelopers and inectors, particularore and more wdustrial parks inffice, and adminases competitivorridors. A hanlaza, Costañeromercial are aevelopments suey offer competeir tenants.

g fastest in El Na Barbara where5,000/m2/month actors, most iack of developaained in the C

Sale prices are b for Class A spa00/m2) for Class class asset (A o

ok

Bogotá remains ndicators and g

s continue to de continue to scos the effects of t

ore, and as agreMexico, Chile, an

fast-growing relikely scenario n out to decentra

nvestors are encrly industrial andwith office compnclude 4-5 storynistration for ine with what is

ndful of new shora Chia, and also being desch as these coutitive rents as w

Norte, most note Class A offices

(USD $33-45). mportantly the able land in thiOP $50,000-68between COP $ce and between

s AB. Cap ratesor AB), tenant’s c

positive thanksgrowing middle elve into Colom

out the market fothe US Free Traeements with Isnd Peru) begin tnts are unlikelyis that these coalized sectors, a

couraged to keepd retail, as theyponents. Somey office towers fdustrial operato

s being offeredopping malls prthe renovated

signed with anuld fill a key nichwell as amenities

ably in Andino/Ns are renting be This is the resu high density, s area. In El S

8,000/m2/month $7mil-12mil / m2 n COP $5.5mil-9s are between 8credit and lease

s to Colombia’s class. Interna

mbia and internaor opportunities.ade Agreement wrael, the EU, anto bear fruit. Thy to have a longonditions simplya trend we are a

p a close eye ony are being intege of the new Clor data centers

ors that are in d in traditional rojects, such asd Metropolis Cn office compoe in the market,

s that are import

Nogal, etween ult of a high Salitre range (USD mil/m2 8-12% term.

s solid ational ational . This will be nd the e new g-term y push lready

n other grated ass A , back some office

Titan Centro onent. since tant to

Com

Offic

Offic

This mark

Clas

Clas

Serv

Tota

Tota

Prod

Vaca

Vaca

Abso

Abso

Futu

*201

mparison of K

ce Market St

ce Market Cl

indicator is elkets to be classi

ss A Rent (US$/m²/mo.

ss AB Rent (US$/m²/mo

vice Charges (US$/m²/m

al Costs Class A (US$/m

al Costs Class AB (US$

duction (m²)

ancy (m²)

ancy Rate

orption (m2)

orption Rate

ure Supply (EY 2015)

12 Annual

Jones Lang LaSalle

Key Latin Am

atistics

ock: Latin Am

laborated by Jfied according t

)

o.)

mo.)

m²/mo.)

$/m²/mo.)

**2013 Annual Fo

e – Pulse – Bogotá Offic

merican Mark

merica

Jones Lang Lato their positions

2012

Mid-Year

20

Mid

30-40 33

25-30 28

3-5 3

33-41 34

28-35 31

148,000* 125

87,000 78

5.7% 4.

189,000* 135

12.3%* 7.3

2,040,000 m2, 253 Bu

recast Sou

ce Market – Mid-Year 2

kets

aSalle, and allos in the rent cyc

013

-Year

Trend(next 1month

3-45

8-39

3-5

4-50

1-44

,000**

,000

.9%

,000**

3%**

uildings

urce : JLL Research (20

2013

ows cle.

d 12 s)

013)

Jones Lang LaSalle – Pulse – Bogotá Office Market – Mid-Year 2013

Typical Market Practices 

Standard Unit of Measurement

Unit of Measurement Square Meters (m2)

Lease Contracts

Rent Quoted in COP /m² /month

Typical Lease Term 3-5 years Frequency of Rent Payment Monthly

Deposit (expressed as per month rent)

Case-by-case basis (Typically an insurance policy is requested in case of failed payment)

Security of Tenure Only for the duration of the tenancy. No guarantee beyond the original lease term

Statutory Right to Renew No (unless an option to renew is agreed at the outset and specified in the lease)

Basis of Rent Increases or Rent Review

Typically annual increases, CPI + 2 (Indexed as a percentage of local CPI, but this can vary)

Frequency of Rent Increases or Rent Review

Depends on contract

Transaction Fees

Agency Fees 2 month’s rent

Agency Fees (payable by Landlord / Tenant)

Landlord/Tenant

Legal Fees (payable by Landlord / Tenant)

Each part responsible for its own legal costs

Incentives

Rent Free Period 1-3 months

The rent free period is not standardized in the local market, however typically occurs. The length of this period is negotiated between the parties and is also a factor of how much (if any) tenant improvement allowance is provided.

Service Charges, Repairs and Insurance

Service Charges/Managements Fees Additional to the rental charge and payable monthly in advance

Utilities (Sometimes separately metered, sometimes paid as a percentage of occupation)

Electricity, telephone, AC, etc. paid by tenant according to consumption

Car Parking 1 space per 50m2

Internal (Tenant Space) Tenant

Common Areas (reception, lift, stairs, etc.)

Landlord (charged back via service charge)

External / Structural Landlord

Building Insurance Landlord

Taxes

Building Insurance Landlord

Local Property Taxes Landlord, annually

VAT on Rent & Service Charge (Payable by Tenant)

16%

Disposal of Leases

Sub-Letting & Assignment Normally yes (subject to landlord approval)

Early Termination Unless otherwise stipulated in the rental contract, tenant is responsible for paying the entirety of the contractual obligation

Tenant's Building Reinstatement Responsibilities at Lease End

Original condition, allowing for normal wear and tear.

Purchasing Properties

Foreign Ownership No restrictions

Strata Title (Partial ownership of the building)

Strata title ownership is quite common

Security Deposit Case-by-case

Agency Fees 3% paid by the Seller.

Legal Fees Each part responsible for its own legal costs

Other Transaction Costs Typically paid by Buyer

Latin America Contacts Scott Figler Consultant Jones Lang LaSalle +57 318-263-2740 Scott.Figler@am.jll.com Jean-Baptiste Wettling Vice President Jones Lang LaSalle +57 317 657 0623 Jean.Wettling@am.jll.com Zach Cheney Director Jones Lang LaSalle Zach.Cheney@am.jll.com Jones Lang LaSalle Colombia www.joneslanglasalle.com/latinamerica

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