REPORT Office Q2 2017

Transcription

1 REPORT Office Q2 2017

2 Q OFFICE RESEARCH & FORECAST REPORT LIMA CURRENT OUTLOOK Key Highlights During the second quarter of 2017 the prime availablity rate reached 27.7% of total inventory, showing and adjustment with respect the previous quarter that closed at 28.6% The net absorption in this period reached 31,812 m 2. The buildings that make up the new supply in the second quarter had an ocupancy rate between 16% an 100% of their offices. Three new projects entered the prime market, adding more than 20 thousand m 2 to inventory. Rent prices, and list prices, maintain on average a trend to downward adjustment INDICATORS PRIME MARKET (A+ y A) Q Q VACANCY RATE NET ABSORPTION NEW SUPPLY RENTAL PRICE In the January - April period of this year, Peru has performed below the forecast of months ago. According to the National Institute of Statistics and Informatics (INEI), in October 2016, the Peruvian economy advanced 1.58%, driven mainly by the increase in the Fisheries (+51.1%) and the Mining and Hydrocarbons (+3.02%) sectors. However, other economic sectors have presented unfavorable results, experiencing negative trends month to month. Among the main sectors within this group through April 2017, the following stand out: Construction (6.01%) and Agricultural (-1.18%). On the other hand, according to the latest Inflation Report published by the Central Reserve Bank of Peru (BCRP), the country s Gross Domestic Product (GDP) would grow only 2.8%, greatly affected by the most recent El Niño phenomenon, which caused growth below 1% in the months of February, March and April. With respect to the price level, it remained slightly above the target range established by the BCRP (+3%), largely due to the rise in food prices. Prices are expected to decline and reach a rate of 2% by next year; in this regard, negative rates have already been registered in April and May, of -0.26% and -0.42%, respectively. As for the prime office market in Lima, at the end of the second quarter, the usable office inventory reached 1,057,472 m 2, distributed in 82 buildings. It should be noted that, in this period, an office reclassification exercise was conducted, obtaining the results shown in the table on page 4. With respect to market entry, during this period, 3 new prime buildings began operating: Torre del Parque (Sanhattan), CE Volterra (San Isidro Golf) and EC Black (Miraflores), amounting to more than 20,000 m 2 in office space. P. 2 COLLIERS INTERNATIONAL

3 The vacancy rate stands at 27.7%, equivalent to 292,669 m2, revealing a decrease compared to the previous quarter (28.6%), explained by the adjustment of inventory (reclassification) but mainly by net absorption in this period, where the Torre del Parque building entered the market with the totality of its spaces occupied. Net absorption in the second quarter amounted to 31,812 m2, bringing the first semester cumulative amount to 40,370 m2. The submarkets with greater activity in placements were Sanhattan, Miraflores and San Borja. With respect to rental prices -list prices-, these have continued the downward trend, showing an average price of US$17.27 per square meter, with the average for A+ offices being US$17.33 and US$17.20 for offices classified as A. Finally, during the remainder of this year, 11 new buildings are expected to be incorporated into the office market, which would increase the inventory by more than 150,000 m2. According to the observed works advances, it is expected that the new supply projected for 2018 will increase due to the delay of some projects initially programed for market entry in P. 3 COLLIERS INTERNATIONAL

4 LIMA OFFICE SUB-MARKETS Existing Prime Offices Prime Office Market - 2 nd Quarter 2017 / Existing buildings Zona Stock or inventory (sqm) Number of buildings Vacancy rate (%) Vacancy (sqm) Net Absorption (sqm) Rental Price (US$ / sqm / month) A+ A Total A+ A A+ A Total A+ A Total Total A+ A Total Sanhattan 151, , , % 17.8% 22.7% 44,422 36,506 80,928 26, San Isidro Golf 45,286 80, , % 17.2% 11.2% ,844 14,041 1, Miraflores 47,364 69, , % 24.3% 21.7% 8,478 16,966 25,444 2, San Borja 41,445 19,059 60, % 4.3% 9.4% 4, ,691 10, Magdalena - 119, , % 58.1% - 69,358 69, Nuevo Este 149, , , % 10.5% 33.3% 74,668 11,405 86,074 2, Surquillo - 19,051 19, % 58.4% 11,133 11, Subtotal 435, , % 25.7% 132, , , Total 1,057, % 292,669 31, The prices are list prices in existing offices available for rent. The prices apply to unfurnished offices pending implementation. The rent prices do not include parking spaces. The values shown are the average prices in each area. The respective tax must be added. TERMINOLOGY Prime Market The market consisting of A and A+ class office buildings. Supprime Market Composed of office buildings of classes B+ and B. 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. Gross Absorption: Amount of square meters of office space that are occupied during a defined period of time (month, quarter, year), considers the rotation of occupants. P. 4 COLLIERS INTERNATIONAL

5 > PRIME MARKET OUTLOOK OFFICE SPACE Q PRIME OFFICE INVENTORY DISTRIBUTION NUEVA OFERTA m 2 PRIME OFFICE AVAILABILITY DISTRIBUTION Prime projects being marketed in Lima - 2 nd Quarter 2017 List prices in buildings in the construction phase Submarket CLASS A+ Sale Price CLASS A Sale Price CLASS B+ Sale Price CLASS B Sale Price Sanhattan 2, San Isidro Golf - 2,252 - Miraflores - 2,230 - San Borja 2,300 Chacarilla 2,116 Magdalena - 2,150 2,152 - Lince 1,550 Nuevo Este 2,190 2,246 - Promedio 2,230 2,178 2,172 - $ ABOUT THE PRICES The prices are list prices in the case of buildings in the drawing-board and/or construction phase that are currently being marketed. These prices apply to unfurnished offices pending implementation. Prices do not include parking spaces. The values shown are the average list prices in each area. The respective tax must be added. Net Absorption Referring to the occupation and vacancy of offices available within the same period, and does not consider the changes of location. It is part of gross absorption and is never greater than this. Vacancy: Amount of square meters that is available for lease or sale. Listing or Asking Price: Price at which an office is offered in the market and is open for negotiation. Closing price: Price at which a lease or sale transaction of an office is settled.. Vacancy Rate: Percentage of square meters of the Stock available for lease or sale. P. 5 COLLIERS INTERNATIONAL

6 > PRIME MARKET SUPPLY AND DEMAND In the second quarter of 2017, 3 new buildings were added to the prime office market: Torre del Parque (Sanhattan), Centro Empresarial Volterra (San Isidro Golf) and Edificio Corporativo Black (Miraflores), adding 20,244 m 2 of new office space to the usable offices inventory, which to date amounts to 1,057,472 m 2 in 82 buildings. The market performance of the prime office segment in this quarter has experienced a boost, provided, especially, by placements of the new supply delivered, specifically in the Sanhattan submarket, and also by the operations in the Miraflores and San Borja areas. The activity in this quarter was denoted by the marketing for rent, showing a low sales activity. Thus, the accumulated absorption through Q was 40,370 m 2, similar to the figure recorded in the same period in 2016 (40,849 m2). To date, the new square meters that have entered the prime segment amount to 62,517, and it is estimated that between the third and fourth quarter of the year more than 150,000 m 2 of usable offices will make entry. As far as the absorption in Q is concerned, it represents almost 11% of the available supply recorded in this period. During this quarter, the vacancy percentage was reduced by only 1 point; this indicates that vacancy is remaining at high rates, a situation that can lead to year-end closing surpassing 30% availability of prime offices. With regard to the distribution of total vacancy, the largest concentration of available space is found in the Sanhattan submarket (29%), followed by Nuevo Este (28%) and Magdalena (24%). PRIME OFFICES HISTORIC NET ABSORPTION, NEW SUPPLY AND VACANCY sqm offices PRIME OFFICES STOCK, VACANCY AND RENT - Q sqm offices / thousands 250, , , ,000 50,000 1,200 1, , ,604 81,002 81, % 5.2% 1,028 1, , % 108, ,836 1,064 1, T T T T-2017 Stock Vacancia Renta (asking) 26.4% 27.7% 78,170 62, T New supply Net absorption Vacancy rate Stock or Inventory Vacancy Rate Rental Price 40,370 30% 25% 20% 15% 10% 5% 0% US$ /m 2 / mes Vacancia Vacancy % Rate $ / sqm / month P. 6 COLLIERS INTERNATIONAL

7 > the PRIME MARKET PRICES The average rental price (list price) for prime offices with immediate availability decreased by 2.86% compared to the first quarter of The average price for the second quarter is US$17.27 per square meter plus taxes. Meanwhile, greater adjustments are still observed when it comes to closing prices, considering the particular conditions of each submarket and the variables related to the lease operation (contract term, exit conditions, increases, and rent-free months, among others). Within the prime segment, the rental price (list price) for class A+ offices is on average US$17.33 per square meter, (US$17.53 in the previous quarter and US$18.69 in Q2 2016), while for class A offices the rental price (list price) on average is US$17.20 per square meter per month. This average was US$18.11/ m 2 in the previous quarter and US$19.83 in the second quarter of This downward trend of prices, on average, is maintained because of the oversupply condition of the market The expectation or asking prices on available spaces show different behaviors according to the submarkets or corridors. For example, in Magdalena submarket the average price went from US$16.18 in the first quarter to US$15.40 in the second quarter, while in the Miraflores area the average price went from US$18.54 in Q1 to US$19.03 in Q2. San Isidro Golf remains as the corridor with the greatest expectation on rental price, with US$21.37 per m 2. It has also been observed that offices under construction, which are marketed for rent, have asking prices above the market average in the existing office supply. The available space supply for sale carries an average list price of US$2,037 per m 2 plus taxes for the prime segment; for class A offices it stands at US$1,946 per m 2 and for class A+ offices at US$2,274 per m 2, plus taxes. PRIME OFFICES PRICE RANGE OF ASKING PRICES FOR RENT BY SUBMARKET US$/M 2 /MONTH $ / sqm / month SH SIG MIR SB MAG NE SURQ P. 7 COLLIERS INTERNATIONAL

8 > SUBPRIME MARKET B+ Y B INDICATORS SUBPRIME MARKET (B+ y B) Q Q VACANCY RATE NET ABSORPTION RENTAL PRICE Subprime Office Market in Lima - 2 nd Quarter 2017 / Existing buildings Submarket Rental Price Stock or inventory (sqm) Number of buildings Vacancy Rate (%) (US$ / sqm / month) B+ B Total B+ B B+ B Total B+ B Total Sanhattan 183, , , % 7.5% 12.7% San Isidro Golf 95,793 58, % 9.0% 13.8% Miraflores 107, , , % 12.1% 16.1% San Borja 19,544 45,342 64, % 13.6% 19.0% Chacarilla 16,704 66,927 83, % 14.6% 12.9% Magdalena 17,660 4,500 22, % 26.2% 41.6% San Miguel 8,498 8,113 16, % % Nuevo Este 85,504 82, , % 7.5% 21.4% Centro - 66,044 66, Lince - 17,359 17, % 43.0% La Victoria 11,502 4,800 16, % % Subtotal 546, , % 10.0% Total 1,184, % The prices are list prices in existing offices available for rent. The prices apply to unfurnished offices pending implementation. The rent prices do not include parking spaces. The values shown are the average prices in each area. The respective tax must be added. P. 8 COLLIERS INTERNATIONAL

9 > SUBPRIME MARKET OUTLOOK At the end of the second quarter of 2017, the inventory of the subprime office market (B+ and B class buildings) amounts to 1,184,699 m 2, distributed in 231 buildings. During this period, 2 new buildings were added to this segment: Edificio Dean Valdivia II (Sanhattan) and Edificio Nexo Premium (Miraflores), with a total of 7,918 m 2 of usable offices. Availability amounts to 16.2% of total inventory, equivalent to 191,472 m 2, an indicator which stood at 16.1% in the previous quarter. The available spaces are concentrated in the Sanhattan, Miraflores and Nuevo Este submarkets, with 21%, 21% and 19% respectively of the total office vacancies in this segment. The distribution of available spaces per building class indicates that 67% is in class B+ buildings and 33% in class B buildings. According to the follow-up conducted, it is estimated that 12 new buildings will be added to the subprime market during the remainder of 2017, which would increase inventory by more than 45,000 square meters. These projects are in the submarkets of Sanhattan (02), San Isidro Golf (01), Miraflores (07) and Chacarilla (02). Also, 9 buildings are currently under construction, representing more than 26,000 square meters of offices, which are expected to enter the market during > SUBPRIME MARKET PRICES The average rental price (list price), as well as the prime market, has shown a downward trend, standing during Q at US$16.18 per square meter (US$16.67 per m 2 in the previous quarter and US$18.02 per square meter in Q2 2016). The rental price range (list price) for class B+ buildings is between US$13.65 per m 2 (La Victoria area) and US$17.55 per square meter (San Isidro Golf area). For offices in type B buildings, the price range is between US$14.50 per m 2 (Magdalena area) and US$16.75 per m 2 (Sanhattan area). The supply of offices for sale, with immediate availability, has an average list price of US$1,912 per m 2 plus taxes, with prices for class B+ offices being US$1,921 per m 2 and for class B offices US$1,898 per m 2, plus taxes. RENT FOR B+ AND B TYPE BUILDINGS, AVERAGE LIST PRICES BY SUBMARKET AND TYPE OF BUILDING SANHATTAN SAN ISIDRO GOLF MIRAFLORES SAN BORJA CHACARILLA MAGDALENA SAN MIGUEL NUEVO ESTE LINCE LA VICTORIA B+ B P. 9 COLLIERS INTERNATIONAL

10 FORECAST A t the closing of the first semester of this year, the office market indicators remain in the oversupply phase. With the registry of new supply (new usable offices) entering the market during this period, amounting to 62,517 m2, and cumulative absorption of 40,370 m2, the effects of over construction are still being observed. In this scenario, projections and work progress indicate that in the remainder of 2017 more than 150,000 m2 of prime office space would enter the market, of which 42% will be located in Sanhattan, whereas 28% will do so in the Magdalena area. In turn, estimates for 2018 show that currently more than 80,000 m2 of prime office spaces are under construction, which -in the absence of delays- would enter the market during next year. Other projects currently under construction, with an estimated market entry in the year 2019, add up to just over 30,000 m2 of new office space, which could be increased, depending on new projects starting construction in the following months. P. 10 COLLIERS INTERNATIONAL As can be seen, the tendency in the construction of new prime office buildings is stabilizing, after several years with high rates of new supply and with an annual absorption line estimated at 80,000 m2 on average (see table at end). The marketing of prime offices during last quarter showed a low activity in terms of sales operations, with more rental operations being observed; it is in this scenario where greater activity was seen in the Sanhattan and San Borja submarkets. The level of cumulative placements so far this year is 40,370 m2, a figure similar to the one for the same period in However, occupancy forecasts for the coming months lead us to believe that absorption this year will not exceed that which was recorded last year, considering the current political-economic situation. Broadly speaking, the corporate office market inventory in Lima -prime and subprime segments- amounts to more than two million square meters of usable offices in just over 300 buildings. The total market vacancy at this time amounts to 22% of inventory, while the absorption phase of the current supply continues to linger on

11 PRIME OFFICE ABSORPTION, NEW SUPPLY AND VACANCY TRENDS % 27.7% 15.0% % 5.0% 5.3% Absorción Neta Net Absorption COLLIERS INTERNATIONAL 2014 Nueva Oferta New Supply Vacancia % Vacancy Rate T 0.0% Vacancy Rate Thousand sqm offices 20.0% P % vacancia miles de m2 de oficinas 200

12 502 offices in 67 countries $ 2.3 billion annual income 160 million of square meters under management 16,300 professionals $ 97 billion in more than 84,000 transactions PERÚ: Lima Eric Rey de Castro Director Gerente Av. San Borja Norte 793 San Borja, Lima 41 TEL FAX RESEARCHER: Lima Sandro Vidal Gerente de Investigación Av. Manuel Olguín 501 Oficina 502 Surco, Lima COLLIERS INTERNATIONAL PERÚ Advisory and Corporate Solutions Av. Manuel Olguín Oficina 502 Lima 33 Perú T colliers.com/peru Este documento ha sido elaborado por Colliers International y es de carácter informativo. La información contenida ha sido proporcionada por fuentes confiables y se presenta en la forma exacta en que fue recibida. Entre las fuentes se incluyen asociaciones y consejos inmobiliarios, así como dependencias de gobierno, entre otras. Colliers International no garantiza ni se hace responsable por la veracidad de la información presentada; cualquier parte interesada deberá hacerse responsable de su propia investigación sobre la precisión de la información. Colliers International excluye cualquier término deducido o implícito, condiciones y garantías que pudieran presentarse con motivo de este documento y excluye cualquier responsabilidad por daños y perjuicios que pudiera surgir. Este reporte y otros documentos de investigación pueden ser encontrados en nuestra página web Colliers International ofrece servicios inmobiliarios a nivel mundial, a través de 16,300 profesionales especializados en 502 oficinas distribuidas en 67 países. Colliers tiene ingresos de US$ 2.3 billones, un volumen anual en valor de transacciones de más de US$ 97 billones y maneja más de 160 millones de metros cuadrados en administración. Accelerating success. P. 12 COLLIERS INTERNATIONAL