4th Quarter industrial BraZil MArKeT report INdUSTrIAL CLASS A LoGISTIC PArKS MArKeT report demand For LoGISTIC PArKS INCreASed BY 27% IN 213 Existing inventory: 8.6 million sqm under Construction inventory: 2.27 million sqm availability: 17.6% net absorption: 1.1 million sqm average asked lease Price: 18.5/sqm/month The year of 213 was characterized by consecutive increases in the basic interest rate (Selic), currency devaluation and more public spends for construction and renovation of airports, expansion and improvement of highways in cities that will receive new automotive plants and investments made in the port sector. Selic rate ended the year at 1%, a level that wasn t achieved since March 212, while IPCA (inflation) closed at 5.91%, registering an increase of.92% in december, compared to.54% in November. despite the current indicator, the government believes that inflation is under control and prices should not present changes in the coming years. This economic perspective put Brazil in first position of countries with the highest real interest rates of the world. The national industrial production increased by 1.2% over Q4 212. The growth explains by the positive result of 2.1% in the first semester. In November 213, the index of employed people in the industry remained stable over the previous month, a fact that contributed for breaking the sequence of five months of negative rates. All this unfavorable economic scenario did not affect the great year of class A logistic parks market that ended 213 with an existing inventory of 8.6 million sqm, a 27% increase of demand compared to the previous year. despite the growing net absorption, the availability rate increased, indicating an unbalance between supply and demand. There was an increase on asked lease prices in the States of São Paulo and rio de Janeiro, however, the current scenario considering just deals realized in the year showed a decrease, since the difference on the average verified in 213 between asked prices and transitioned prices was around 15%. It is important to mention that this percentage may change depending on the region or submarket analyzed. Most part of under development projects remains concentrated in the Southeast region, especially in the rio-são Paulo axis, however, the market towards for South, probably influenced by new demand caused by the extension of tax incentives policies being granted by states, improvement in local infrastructure and land opportunities in locations with a high potential consumption. The development of logistic market in the Northeast remains on growing, and despite the concentration of properties under construction or project in the surroundings of Porto de Suape, the expansion for other States such as Bahia, Sergipe and Paraíba should take place in the coming quarters. existing inventory The national inventory increased by 27% in 213, the same percentage of net absorption growth, thus, despite the higher number of properties in the market not influenced the demand that grew at the same pace. The State of São Paulo concentrates 59.5% of class A existing inventory of Brazil and 52.6% of the total delivered in the fourth quarter, being 33.6% in Jundiai and 16.6% in Campinas. The States of Paraná and Minas Gerais has 21.4% and 13.8% of the total delivered. Evolution of national Existing inventory by year: Class a logistic ParKs (Million sqm) 3.6 4.6 21 211 212 213 6.3 8. www.colliers.com.br
Distribution of National Existing Inventory by State (%) 59.47% 7.52% 8.53% 11.3% 2.19%.2% 1.12%.22%.49%.5%.71% 3.29% 4.14%.31% AM PA CE PE BA DF GO ES MG RJ SP PR SC RS North Northeast Midwest Southeast South DISTRIBUTION OF NATIONAL NEW INVENTORY BY STATE Q4 213 (%) EVOLUTION OF NATIONAL AVAILABILITY RATE BY YEAR (%) 52.65% 17.6% 13.3% 21.36% 13.76% 8.7% 6.% 4.96% 3.91% 3.35% São Paulo Paraná Minas Gerais Rio de Janeiro Santa Catarina Goiás 21 211 212 213 Total Q4 New Inventory: 255,496sqm AVAILABILITY RATE With the market receiving a great number of new properties each quarter, was verified an increase from 13.3% in the end of 212 to 17.7% at the end of 213. The Midwest, Southeast and South regions received new inventory in the fourth quarter and consequently presented an increase in the availability rate. North and Northeast had reduction on availability due to the absorption observed in the period and the non-delivery of new logistic parks. The trend for the next three years according to the schedule of constructions compared to the average annual net absorption indicates an availability rate oscillating around 25%. EVOLUTION OF NATIONAL AVAILABILITY RATE BY REGION AND QUARTER 213 (%) Midwest Northeast North 18.94% 2.3% 16.31% 12.64% 19.33% 15.46% Southeast 17.87% 18.44% South 13.2% 15.9% Q3 213 Q4 213 p. 2 Colliers International
NET ABSORPTION Net absorption for 213 was the highest of the last three years, 1.1 million square meters. NATIONAL NET ABSORPTION BY REGION Q4 213 (%) 82.86% Some deals were realized during the fourth quarter in properties that are in the process of conclusion. As the consideration of absorption is made only on the delivery of the property, this explains, in part, a quarterly absorption lower at the end of the year. The Southeast was responsible for 81.8% the national net absorption. The Northeast outperformed other regions and was responsible for 12.9% of the total, which can be partly attributed to the efforts of the government to offer tax incentives to attract new companies. 2.96% 2.29% 4.7% 7.19% Midwest Northeast North Southeast South EVOLUTION OF NATIONAL NET ABSORPTION BY YEAR (MILLION SQM) 1,94 1,17 871 UNDER CONSTRUCTION Until the end of 214, the inventory to entry is 2.27 million sqm with concentration of 76.1% in the Southeast and 14.4% in the South. If this forecast be realized, the increase will be approximately 3% in 214. The first half should be responsible for 75% of this total. DISTRIBUTION OF UNDER CONSTRUCTION INVENTORY BY REGION 214 (%) 1.41% 1.13% 211 212 213 6.83% CUMULATED NATIONAL NET ABSORPTION BY REGION 213 (%) 14.44% 81.82% 76.19%.65% North 12.99% 1.28% 3.26% Northeast Midwest Southeast South Southeast South Northeast North Midwest Colliers International p. 3
4th Quarter industrial forecasted DElivEry ProviDED by QuartEr 214 (thousand sqm) Q1 214 1,13 Q2 214 584 Q3 214 496 Q4 214 181 UnDer project Projects totaled 1.75 million sqm and have a delivery cycle of one to five years. Approximately 2.2 million sqm should start construction in 214, which will create an abundant supply for 215. About 12% of the total area are on the South region, which demonstrates a change of direction of new investments in logistic parks in Brazil, which until then was took place by Northeast. Distribution of under ProJECt inventory by region 214 (%) 1.5%.43% 9.43% 11.75% 76.89% Southeast South Northeast North Midwest average asked lease price The average asked lease price in the main regions of the country showed signs of decrease, in part due to the adjustments from a highest supply. The increase of asked lease prices in the State of São Paulo and Northeast are justified by the delivery of new properties in regions where the average price is higher than others. region 212 213 BrAZIL r$ 2. r$ 18.5 SÃo PAULo r$ 2.5 r$ 21. rio de JANeIro r$ 26. r$ 23. NorTheAST r$ 15.5 r$ 16. p. 4 Colliers international
Statistics Table by Region Q4 213 Region Inventory Availability Availability Rate Absorption Average Price North 192,676 29,792 15.46% 7,448 R$ 21. Northeast 714,615 9,32 12.64% 3,64 R$ 16. Midwest 79,95 16,233 2.3% 4,691 R$ 17. Southeast 6,454,96 1,189,93 18.44% 131,426 R$ 2. South 624,252 99,244 15.9% 11,412 R$ 18.5 BRAZIL 8,65,589 1,425,52 17.67% 158,617 R$ 18.5 Statistics Table by State Q4 213 State Inventory Availability Availability Rate Absorption Average Price AM 176,842 29,792 16.85% 7,448 R$ 23. BA 17,723 12,813 72.3% R$ 16. CE 9,376 12,964 14.34% 3,96 R$ 14.7 DF 39,588.% 4,691 R$ 18.3 ES 57,538.% R$ 17.5 GO 4,363 16,233 4.22% R$ 16. MG 688,31 42,33 6.15% 1,989 R$ 18. PA 15,834.% R$ 19. PE 66,517 64,525 1.64% -32 R$ 16.5 PR 265,71 79,922 3.8% 11,412 R$ 18.5 RJ 911,578 5,43 5.53% 16,736 R$ 25.6 RS 24,754 1,9 7.68% R$ 18. SC 333,788 17,422 5.22% R$ 18.2 SP 4,796,949 1,97,197 22.87% 112,71 R$ 22. TOTAL 8,65,589 1,425,52 17.67% 158,617 R$ 18.5 Colliers International p. 5
213 OVERVIEW 1st QUARTER Quarterly net absorption increased by 7%. The State of Sao Paulo has a participation of 89% of total net absorption. Availability rate closed at 15.6%, a number 2.3% higher than the previous quarter. Decrease of asked prices of 5.5%. Highest net absorption of the year, partly explained by leases in Jundiaí submarket. 2ND QUARTER Decrease of asked prices for the second consecutive quarter. Lowest amount of square meters delivered of the year. Availability rate closed at 14.3%. Net absorption of 192,sqm. 3RD QUARTER New inventory of 5,sqm, with 67% in the Southeast region. Availability rate closed at 17.3%, an index 2.6% higher than the previous quarter. Devolutions in the North region increased the availability rate of 3.3% to 19.3%. Net absorption of 376, sqm, the second highest of the year. 4TH QUARTER Existing inventory increased by 27% compared to 212 and 119% compared to 21. Accumulated net absorption of 1.1 million sqm, an increase of 27% compared to 212. Availability rate increased by 4% compared to 212. Decrease of asked lease prices in Brazil and increase in State of São Paulo. Gap between asked prices and closed reached on average 15% in São Paulo. p. 6 Colliers International
COLLIERS OPPORTUNITIES Lease - Curitiba - PR Built Area: 155, sqm Modules from: 1,9 sqm Ref. 218 Lease Campos dos Goytacazes - RJ Built Area: 47,32 sqm Ref. 211 Lease Dist. Industrial de Queimados RJ Land Area: 173,658,26 sqm Built Area: 89,79,77 sqm Modules from 2,181,6 to 4,96,99 sqm Ref. 225 Lease Anhanguera / Sumaré - SP Land Area: 445, sqm Built Area: 23,5 sqm Ref. 717 Lease - Salto - SP Land Area: 58,932 sqm Built Area: 31,4 sqm Ref. 78 Lease - Cabreúva - SP Land Area: aprox. 4, sqm Built Area: 164,654 sqm Ref. 772 Colliers International More than 482 offices in 62 countries in 6 continents USA: 14 Canada: 42 LATAM: 2 Asia: 38 ANZ: 157 EMEA: 85 US$ 1,95 billion in annual revenue More than 14 millions sqm under management More than 13,5 profissionals 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. Ceilings Height: Space between the finished flooring and the 1st structure ceiling interference. Build-to-Suit: Customized construction Colliers international do brasil REAL ESTATE CONSULTANCY for INDUSTRIAL, office, retail, land, rural, HOTels, HOSPITAls and educational institutions Real Estate Investments Lease - Guarulhos - SP Land Area: 1.196,342 sqm Built Area: 425,795 sqm Ref. 764 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 Lease - Hortolandia - SP Land Area: 15, sqm Modules from 3,315 sqm Ref. 769 CONTACTS Sao Paulo R. Olimpíadas, 25 4551- Sao Paulo SP TEL +55 11 3323 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 57-16 Recife PE TEL +55 81 337 2222 Fortaleza Av. Dom Luis, 87 616-23 Fortaleza CE TEL +55 11 8171 2727 More information: RESEARCH AND MARKET INTELLIGENCE research@colliers.com.br INDUSTRIAL industrial@colliers.com.br Advisory for Investment Funds and Private Investors Green Consulting for LEED certification Esse documento foi elaborado pela Colliers International Brasil. Todas as informações contidas neste documento porderão sofrer alterações sem aviso prévio. A colliers International é uma organização mundial e independente. Esta publicação é de direitos autorais da Colliers International e/ou sua licenciadora. 213. Todos os direitos reservados. Accelerating success. www.colliers.com.br