INDUSTRIAL BRAZIL MARKET REPORT INDUSTRIAL CLASS A INDUSTRIAL PARKS DEMAND FOR INDUSTRIAL PARKS INCREASED IN MOST PARTS OF BRAZIL Existing Inventory: 7,35,77 sqm Net Absorption: 247,78 sqm Availability: 12,3% Average Asking Lease Price: R$ 19.95/sqm/month ECONOMIC OVERVIEW BRAZILIAN GOVERNMENT BET ON THE INDUSTRY TO LEVERAGE THE ECONOMY The reduction in the expected growth of Brazilian GDP in 212 made the government change some economic projections. In the last years, the Brazilian economic model prioritized to stimulate the domestic consumption through income transfers and credit enhancement. Actually, the trend is to boost the productive segment for increasing the competitiveness of Brazilian products in the international market. One of the main actions realized by the government on this year was the announcement of a package of concessions of.5 thousand kilometers between roadways and railways connecting the north to the south. The private sector expectation is to make investments of R$ 133 billion in infrastructure, being 68% directed to the railway network and 32% to the roadway network. About the total invested, R$ 79.5 billion will be on the first five years. ASKING LEASE PRICE NET ABSORPTION AVAILABILITY CONSTRUCTION INDUSTRIAL PARKS HIGHLIGHTS Q2 212 The current macroeconomic conditions should contribute for the raising of sharing trading on the GDP, which was 11% on 211 - in Germany and China, for example, the sharing trading with other countries on the GDP is 4% and 25%, respectively. Actually, the exchange rate acts more favorably than a year ago when the U.S. dollar was less than R$ 1.6. The depreciation of Brazilian currency is crucial to making the domestic product more attractive around the world. www.colliers.com.br
MARKET REPORT INDUSTRIAL MARKET OVERVIEW INVENTORY INCREASED BY 29.6% IN ONE YEAR The increase in the construction activity during the third quarter indicates a growth of industrial parks in Brazilian market. In this period, 65,324 sqm were delivered. The logistics sector is each day more professionalized and attracts international players such as, Prologis and Goodman, which brings to the market its international expertise and standardization. The accelerated development remains throughout the Country. The east remains as the region that receives the most part of new inventory, presenting 82% of total. One of the cities with highest growth potential in the industrial / logistics segment is Jundiaí, 58 km far from Sao Paulo and between some of the most important highways of the east region (Bandeirantes, Anhanguera and Dom Pedro I). The region is placed between the cities of Sao Paulo and Campinas, which has a strong logistic sector and do not provide incentives for the installation of new industrial parks. The development also occurs in other regions of Brazil. In the, specifically in the state of Pernambuco, 42,481 sqm were delivered on this quarter. Two years ago, the state had no class A industrial parks. Currently, the main market developers requires a specific standard of development, which is similar to found in others countries. One of the most relevant tax incentives offered by the state is the reduction of ICMS (tax on operations involving movement of goods and the provision of services) that can be extended up to 12 years with possibility of renewal. Compared to the same period last year, the inventory grew up by 29.6%. Considering only the period of one year, the increase was 2%. EXISTING INDUSTRIAL PARKS IN BRAZIL PER SQM AVAILABILITY RATE AVAILABILITY RATE INCREASED BY 47% COMPARED TO THE PREVIOUS QUARTER Due to the delivery of 65,324 sqm and the decrease in the absorption speed, the availability rate ended the quarter with 12.3%. EXISTING INVENTORY (MILLIONS PER SQM) X AVAILANILITY RATE (%) Millions 8 7 6 5 4 3 2 1 3,6 7.2% 46,3 Q2 21 3,9 4,1 4,8 8.7% Q4 21 8.5% Q1 211 Existing Inventory (sqm) Q2 211 5,4 5,7 Q3 211 Q4 211 Net Absoption (sqm) 5,9 1,297 262,25 379,56 2,75 253,47 211,857 197, 247,78 14% 12% 1% 8% 6% 4% 2% % Availability Rate (%) 211 212 % EXISTING INVENTORY (SQM) X AVAILABILITY RATE PER REGION (%) Total 5,43,493 7,35,78 29.6 Millions Q3: DELIVERIES IN BRAZIL PER SQM 211 212 % 7 6 5 5,739,327 5% 4% Total 239,956 65,324 2 4 25.% 3% 3 2 1 5,329 12.5% 54,445.7% 194,2 13.% 547,389 3.4% 2% 1% % east Q1 212 6,2 7.2% 6.6% 6.% 6.4% 6.8% Q2 212 7, 12.3% In regional comparison, east had 13% against 6.8% in the previous quarter. This region represents the largest amount of Brazilian inventory and has more weight on the availability rate calculation. In the, 25% was verified 25% over a inventory of 5,329 sqm. In the and, industrial parks are expanding sharply. The availability of.7% and 12.5% still reflexes sensitive markets due to the low inventory. The market presents availability of 3.4%, in part, explained by improvements in the region s infrastructure and incentives, as for example, the program Sul Competitivo (Competitive ). Existing Inventory (sqm) Availability Rate (%) P. 2 COLLIERS INTERNATIONAL
MARKET REPORT INDUSTRIAL GREEN BUILDING LEED CERTIFICATION Created by U.S. Green Building Council, the LEED certification (Leadership in Energy and Environmental Design) is a system of orientation and certification for developments that use construction methods intended to be lesser aggressive to the environment. Also is considered the sustainable use, following guidelines established by the board. The main objective is to expand the green developments in the country, through the formation of technical standards, tools and procedures. To obtain the LEED certification, the construction must follow seven requirements, which are: Energy Efficiency Rational Use of Water Materials and Resources Internal Environmental Quality Sustainable Area Innovations and Technologies Regional Credits In addition to accomplish the requirements, the development will receive a visit from a multidisciplinary committee composed by architects, engineers and builders who is going to realize evaluations and classifications the project within four categories: LEED Certified 4 to 49 points, LEED Silver 5 to 59 points, LEED Gold 6 to 79 points or LEED Platinum above 8 points. NET ABSORPTION DEMAND INCREASES ACROSS THE COUNTRY The national net absorption was 247,78 sqm, an increase of 2% in comparison to last quarter. The cost for the construction of such a project depends upon the certification level and may vary from 5% to 2% over a conventional property. east region presented a net absorption of 134,371 sqm, and represents 62% of the total absorbed. Currently there are six industrial or logistical condominiums that obtained the LEED certification: The regions,, and respectively absorbed: 5,56 sqm; 11,99 sqm; 56,755 sqm and 39,797 sqm. Centeranel Sao Paulo/SP Aurora Business Park Itú/SP EB Park Jundiaí Jundiaí/SP E Business Park Sao Paulo/SP GR Jundiaí Jundiaí/SP, GR Campinas Campinas/SP 14, COMPARISON OF NET ABSORPTION PER REGION IN CLASS A INDUSTRIAL PARKS (SQM) 2ND QUARTER 212 X 3RD QUARTER 212 134,371 12, 111,5 1, 8, 58,31 56,755 6, 39,797 4, 27,8 11,99 P. 3 COLLIERS INTERNATIONAL 2Q 212 east 3Q 212 5,56 2,
MARKET REPORT INDUSTRIAL QUARTERLY ABSORPTION IN CLASS A INDUSTRIAL PARKS (SQM) MINIMUM AND MAXIMUM ASKING LEASE PRICES PER STATE IN CLASS A INDUSTRIAL PARKS (R$/SQM/MONTH) Q3 211 2,75 Q4 211 253,47 Q1 212 211,857 Q2 212 197, PRICES QUARTERLY ASKING PRICES INCREASE IS ONCE AGAIN LOWER THAN INFLATION OF PERIOD 247,78 22 AM 12 11 18 19 2 19 18 BA CE DF ES GO MG PA PE PR RJ RS SC SP 14 25 12 3 14 27 32 12 The average price verified in the third quarter was R$ 19.95 sqm/month. Compared to the previous period, which average was R$ 19.75 sqm/ month, there is an increase of 1%. As in the previous quarter, this growth percentage is below than IGP-M (General Price Index Market), which ended the quarter at 3.74%. AVERAGE ASKING LEASE PRICES IN BRAZIL (R$/SQM/MONTH).9.9.7 18.5 19. 18.8 19.3 19.7 19.9 NEW INVENTORY PROJECTION FOR 212 STAYS BELOW THE EXPECTATIONS In this quarter, 65,324 sqm were delivered, which represent 81% of the total amount projected for the period and an increase of 133.5% over the previous quarter. The deliveries occurred in three states: Pernambuco with 42,481 sqm, Amazonas with 68,88 sqm and Sao Paulo with 448,813 sqm. DISTRIBUTION OF THE DELIVERED INVENTORY PER STATE (SQM) Q2 21 Q4 21 Q3 211 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Three regions registered increases of prices. The leads the ranking with an increase of 8%. In the was verified an average of R$. 1% higher than the number verified in the previous quarter. region increased by 6%. Delivered Inventory: 65,324 Amazonas 68,88 11% Pernambuco 42,481 6% The east region presented decrease of 2% in average prices compared to the previous quarter. This fact is explained, in part, by the number of developments delivered during the quarter that presented lower prices than previous average. Sao Paulo 494,35 82% COMPARISON OF AVERAGE ASKING LEASE PRICES PER REGION IN CLASS A INDUSTRIAL PARKS (R$/SQM/MONTH).9 18.6.95 2nd Quarter east 2.6.3 Brazil 19.75 The industrial parks that were postponed for the following quarters were: Alianza Business Park (PA), Parque Empresarial Contagem I (MG), Linhares II Business Park (ES), Sumaré Business Park (SP), DVR Business Park Embu (SP) and GR Campinas II (SP). 3rd Quarter Until the end of the third quarter, the market has received approximately 1.3 million sqm. It is notable that in the begging of 212 the market projection to receive new areas was about 2.1 million sqm.. 2..1 east 2.25 18.4 Brasil 19.95 COLLIERS INTERNATIONAL P. 4
MARKET REPORT INDUSTRIAL The developments delivered in this quarter were: Aurora Business Park Itu - SP 52.7 sqm Eadi Aurora Cajamar Industrial Park Cajamar - SP.895 sqm CCP / Prologis CD-Dutra Arujá - SP 42.74 sqm Masa Cone Plug & Play Cabo de Sto Agostinho - PE 12.413 sqm Cone Cone Suape Cabo de Sto Agostinho - PE 3.67 sqm Cone Delta Empresarial Park Jundiaí - SP 8. sqm Delta Lease Distribuition Park Manaus II Manaus - AM 68.88 sqm Hines CLI Centro Logístico Itapevi Itapevi - SP 131.84 sqm Sanca Engenharia Master Business Park Jundiaí - SP 27.331 sqm Fulwood Metro Park Brasil Sto Antonio da Posse - SP 1. sqm Metro Park Brasil Sorocaba Business Park Sorocaba - SP 35.68 sqm Fulwood Rodoanel Business Park Barueri - SP 2.72 sqm Magnitude Neg. Corp. MARKET TRENDS 212 CLOSING (4TH QUARTER) AVAILABILITY RATE (BRAZIL) Between 14% and 22% NET ABSORPTION (BRAZIL) Between 8, sqm and 1,1, sqm AVERAGE ASKING LEASE PRICE (BRAZIL) Between 6% and 1% year-to-date NEW INVENTORY (BRAZIL) Between 1,5, sqm and 2,1, sqm P. 5 COLLIERS INTERNATIONAL
MARKET REPORT INDUSTRIAL SUMMARY OF MARKET INDUSTRIAL CONDOMINIUMS IN BRAZIL CLASS A 3RD QUARTER OF 212 Existing Inventory: 194,2 sqm Net Absorption: 39,797 sqm Availability Rate: % Asking Lease Price: R$ 2./sqm/month Existing Inventory: 54,445 sqm Net Absorption: 56,755 sqm Availability: 12% Asking Lease Price: R$.1/sqm/month Existing Inventoy: 5,329 sqm Net Absorption: 11,99 sqm Availability Rate: 25% Asking Lease Price: R$,/sqm/month east Existing Inventory: 5,739,327 sqm Net Absorption: 134,371 sqm Availability Rate: 13% Asking Lease Price: R$ 2.25/sqm/month Existing Inventory: 547,389 sqm Net Absorption: 5,56 sqm Availability Rate: 3% Asking Lease Price: R$.3/sqm/month STATISTICS TABLE REGION #PARKS EXISTING INVENTORY (SQM) AVAILABILITY RATE Q2 212 AVAILABILITY RATE ABSORPTION (SQM) AVERAGE ASKING LEASE PRICE (R$/SQM/MONTH) AVERAGE ASKING LEASE PRICE (US$/SQM/MONTH) 3 5,329 47% 25% 11,99. 8.5 9 54,445 7% 12% 56,755.1 7.55 3 194,2 26% % 39,797 2. 1. east 14 5,739,327 7% 13% 134,371 2.25 1.12 7 547,389 4% 3% 5,56 18.4 9,2 Total 126 7,35,77 7% 12% 247,78 19.95 9.97 Exchange Rate: US$ 1 = R$ 2. COLLIERS INTERNATIONAL P. 6
MARKET REPORT INDUSTRIAL COLLIERS OPPORTUNITIES Lease - Fortaleza - CE Land area: 1.4 million sqm Built area: 4, sqm 4, sqm ready to lease Ref. 1 Lease Campos dos Goytacazes - RJ Land area: 47,32 sqm Ref. 211 Lease - Fortaleza - CE Leaseable area:,512 sqm Built area: 5,7 sqm Ref. 12 Lease - Sumaré - SP Land area: 558,7 sqm Built area: 276,275 sqm Ref. 7 Lease - Cabreúva - SP Land area (1st stage): 3,83 sqm Built area: 137,492 sqm Ref. 772 Lease - Cabreúva - SP Land area: 396,82 sqm Leaseable area: 137,49 sqm Ref. 772 Colliers International More than 52 offices in 62 countries in 6 continents USA: 147 Canada: 37 LATAM: 19 Asia: 36 ANZ:5 EMEA: 118 US$ 1.8 billion in annual revenue More than 1.1 million sqm under management More than 12,3 profissionals Lease - Guarulhos - SP Land area: 1,2, sqm Built area: 281, sqm 1st stage Ref. 764 Lease - Curitiba - PR Built area: 147, sqm Modules from: 1,9 sqm Ref. 218 CONTACTS Sao Paulo R. Olimpíadas, 25 4551- Sao Paulo SP TEL +55 11 3323 REAL ESTATE MARKET VOCABULARY. Absorption: Amount of sqm occupied in the previous period. Development Category: Real estate properties are classified as A+, A, B and C. Stock / Inventory: Amount of usable constructed area in square meters. Availability Rate: Ratio between area available area and total area. Free Ceilings Height: Space between the finished flooring and the 1st structure ceiling interference. Build-to-Suit: Customized construction COLLIERS INTERNATIONAL BRAZIL REAL ESTATE CONSULTANCY FOR INDUSTRIAL, OFFICE, RETAIL, LAND, RURAL, HOTELS, HOSPITALS AND EDUCATIONAL INSTITUTIONS. Real Estate Investments. Tenant and Landlord Representation - Leasing, Acquisition and Sale. Advisory and Disposals for real estate assets and/or portfolios. Build-to-Suit and Sale & Leaseback Operations. Lease Administration and Property Management. Real Estate Valuation for Leasing, Acquisition, Sale and Guarantee. Market and Technical-Financial studies, Highest and Best use studies. Advisory for Investment Funds and Private Investors. Research and Market Intelligence. Green Consulting for LEED certification Rio de Janeiro Av. Almirante Barroso, 63 231-3 Rio de Janeiro RJ TEL +55 21 2524 4242 Recife Av.Gov. Agamenom Magalhães, 4.575 57- Recife PE TEL +55 81 337 2222 Fortaleza Av. Dom Luis, 87 6-23 Fortaleza CE TEL +55 11 81 2727 More information: RESEARCH AND MARKET INTELLIGENCE research@colliers.com.br INDUSTRIAL industrial@colliers.com.br Accelerating success. P. 7 COLLIERS INTERNATIONAL www.colliers.com.br