RESEARCH & FORECAST REPORT

Size: px

Start display at page:

Download "RESEARCH & FORECAST REPORT"

Matthew Norman
6 years ago
Views:

S2 2011 INDUSTRIAL BARRANQUILLA COLOMBIA - INDUSTRIAL RESEARCH & FORECAST REPORT Economic Overview According to the DANE (National Administrative Department of Statistics), in the third quarter of

Mining continues to make the most relevant contribution to the Colombian economic growth, with a variation of 12.6%, followed by transportation, storage and communication with 7.2%.

MARKET INDICATORS S2 SUPPLY GROSS ABSORPTION CONSTRUCTION SALE PRICES RENTAL PRICES UPDATE GDP Growth (Quarter Increase Rate) 2010 2011 Despite the winter season, it is estimated that the Gross

1 S INDUSTRIAL BARRANQUILLA COLOMBIA - INDUSTRIAL RESEARCH & FORECAST REPORT Economic Overview According to the DANE (National Administrative Department of Statistics), in the third quarter of 2011, the economy grew 7.7% compared to the same period of 2010, this being the largest annual variation registered since Mining continues to make the most relevant contribution to the Colombian economic growth, with a variation of 12.6%, followed by transportation, storage and communication with 7.2%. Repair services, restaurants and commerce grew 6.6%. It is worth to highlight that construction registered a growth of 3.7%, due to an increase of civil projects and value added to buildings. MARKET INDICATORS S2 SUPPLY GROSS ABSORPTION CONSTRUCTION SALE PRICES RENTAL PRICES UPDATE GDP Growth (Quarter Increase Rate) Despite the winter season, it is estimated that the Gross Domestic Product will close in 2011 between 4.8% and 5.5%, generating a greater well being and lowering the unemployment rate, which in November 2011 closed in 9.2% compared to the same month of last year. While the world goes through an economic crisis and countries as Spain and the United States register unemployment rates of 7.7% and 8%, in the same order, Colombia reaches its lowest rate in 15 years. With the Free Trade Agreement signed between Colombia and the United States in October 2011, the government awaits a larger growth of the Gross Domestic Product and expects the creation of 300 to 500 thousand jobs during its first five years. The total amount of exports add up to US$ 22, million, of which 45% belong to the manufacturing industry, 28% to the agro industrial sector, 19% to services and 8% to garments. The main destinations are United States, China, Ecuador and Holland. As of today, Colombia has Free Trade Agreements signed with the European Free Trade Association EFTA (Iceland, Liechtestein, Norway) and the European Union, and in negotiation with South Korea, Panama and Turkey. Colombia hopes, in a nearby future, to sign agreements with Japan, Australia, New Zealand and Dominican Republic, among others, which would allow these export rates to grow. On the other hand, the inflation rate closed in 2011 in 3.73%, registering an increase of 0.56 percentage points in comparison to the 2010 year end rate, mostly due to food products and regulated food products. Even though throughout the year the inflation rate showed a growing trend, it did not overcome the stipulated ranges of the Republic Bank, who established the inflation goal between 2% and 4%. For 2012, it is estimated that Colombia will have en economic growth of 5.4%. Despite the fact that it would be slowed down by the European crisis, the country will place itself over Latin American countries like Brazil, Chile and Mexico. According to BBVA Research, while a time of low economic growth is taking place worldwide, it is expected that the Colombian economy maintains itself over the potential rate. The inflation will remain stable, which is expected to end the year in 3.4% due to the moderate increase of international basic product prices, specially petroleum.

Graph 1 BARRANQUILLA OVERVIEW 400 350 300 250 200 150 100 50 0 Missions Information Requirements Investment Opportunities 2004 2005 2006 2007 2008 2009 2010 2011 (Octubre) NUMBER OF SUPPORTED

advances in technological information (Business Process Outsourcing BPO & IT) with a participation of 32%, followed by logistics and transportation, representing 14%.

According to the Barranquilla Chamber of Commerce, the city presented in 2011 an important dynamism in international commerce, port movement and construction.

2 Graph 1 BARRANQUILLA OVERVIEW Missions Information Requirements Investment Opportunities (Octubre) NUMBER OF SUPPORTED INVESTMENTS Source: Probarranquilla The investment opportunities in Barranquilla correspond, mainly, to the outsourcing of business processes to international companies as a result of the advances in technological information (Business Process Outsourcing BPO & IT) with a participation of 32%, followed by logistics and transportation, representing 14%. These opportunities come mainly from Europe, Latin America, Caribbean, North America and Asia Pacific. According to the Barranquilla Chamber of Commerce, the city presented in 2011 an important dynamism in international commerce, port movement and construction. By November 2011, it registered an inflation rate of 4.0%, being the fourth city with the mayor increase of prices, caused specially by the values presented in November by housing, food products and transportation sectors. By the end of the semester, between August and October 2011, Barranquilla obtained an unemployment rate of 8.9%, positioning itself as the second city with the lowest unemployment rate of the 13 main Colombian cities analyzed, this behavior is due mainly to commerce activities, restaurants and hotels with a 32.9%, community social personal services with 21% and the manufacturing industry with 17%. Construction registered the greatest positive variation by hiring 9,779 workers in comparison to the same period of By October 2011, 592,151 square meters were approved, presenting a growth of 37.5%, compared to the same period of 2010 and placing 2011 as the second year with the most square meters approved over the last ten years. Of the total amount, 25% was approved for a use different than housing. On the other hand, exports by October 2011 grew compared to 2010 in 9.1%. The main destinations were United States, Venezuela, China, Ecuador and Brazil. Imports grew in 28.2% when compared to last year, where the main products that came into the country were from the United States and China. There was also an increase of the products that came from Venezuela. Graph 2 Calle 30 Via 40 Malambo Juan Mina Barranquillita 4% 7% 1% 3% 6% 43% 34% 2% Stand Alone Sites SUPPLY DISTRIBUTION BY SUBMARKET AND LOCATION (sqm) SUPPLY The second semester of 2011 ends with a warehouse supply of 158,116 rentable square meters in the city s urban and sub urban submarkets, 32% more than the amount registered in the same period of last year. This growth is presented as a result of the staggering process that is taking place in Barranquilla, where companies relocate to spaces with better specifications, causing a great amount of warehouses with low specifications to become vacant and available in the market. Analyzing the warehouse supply by submarket, it is found that Calle 30 occupies first place, with 43% of the total amount, meanwhile, Via 40 submarket ranks second place with 36%, these two being traditional industrial zones of Barranquilla, where the greatest availability is found due to the companies preference to locate their industries in the new suburban submarkets. It is worth to highlight that due to the build to suit commercialization strategy, the built space supply has decreased, instead these areas are being reflected in the industrial land supply found within these complexes. On the other hand, an analysis by location, finds that warehouses in stand alone sites participate with 88% of the total amount, the rest belongs to industrial parks, behavior caused by the of new projects developed over the last few years that have influenced the companies preference to occupy spaces in closed and private complexes that offer security, comfort, greater circulation areas, and most important, warehouses with better specifications. For 2012, Colliers International estimates that the vacant trend of warehouses located in stand alone sites will remain and the supply of spaces in industrial parks will decrease significantly. P. 2 COLLIERS INTERNATIONAL

Graph 3 NEW SUPPLY INDUSTRIAL LANDS Juan Mina Barranquillita 1% 82% 17% By December 2011, there are 1,109,000 square meters of projected warehouses aestimated, distributed in four industrial parks,

It is important to mention that there are four projects that add up to approximately 437,000 square meters that are in review o restructuring, in addition, the build to suit construction trend and

It is worth noting that the Juan Mina submarket has a participation of 82% due to its strategic location and land availability for industrial development.

defined trend to offer land for development instead of already built warehouses, putting a stop on construction and generating new projects.

companies like Qbex Electronics and HADA Cosmetics have arrived and as of today have already started the construction of their industrial buildings. 0 550.000 1.100.

3 Graph 3 NEW SUPPLY INDUSTRIAL LANDS Juan Mina Barranquillita 1% 82% 17% By December 2011, there are 1,109,000 square meters of projected warehouses aestimated, distributed in four industrial parks, of which 99% is still in a planning phase. It is important to mention that there are four projects that add up to approximately 437,000 square meters that are in review o restructuring, in addition, the build to suit construction trend and the industrial land supply for development has caused the built space availability to decrease compared to years before. It is worth noting that the Juan Mina submarket has a participation of 82% due to its strategic location and land availability for industrial development. By the end of 2011, the industrial land supply closed in 10,805,497 square meters, this amount increased 42% when compared to the same period of last year, behavior that is consequent to the well defined trend to offer land for development instead of already built warehouses, putting a stop on construction and generating new projects. On the other hand, it is estimated that the gross land absorption during the second semester of 2011 registered in 1,362,140 square meters, of these, 31% are concentrated in La Cayena, where companies like Qbex Electronics and HADA Cosmetics have arrived and as of today have already started the construction of their industrial buildings NEW SUPPLY DISTRIBUTION BY SUBMARKET AND LOCATION Graph 4. INDUSTRIAL LAND DISTRIBUTION BY SUBMARKET AND LOCATION (sqm) % Stand Alone Site 57% of industrial land available is located in stand alone sites, 24% within Industrial Parks and the rest of the supply in Tax Free Zones % 20 % 8 % 26% 17 % 0 3 % 2 % 2% 3 % Juan Mina Malambo Via 40 Barranquillita Calle 30 CALLE 17 ROUND POINT PARK With an investment of COP$ 400 million, the City Hall seeks to recover public space, specially in the round point zone, made up of 60,000 square meters, and the creation of green zones for the citizens. The project will be finished in April P. 3 COLLIERS INTERNATIONAL

4 COP / sqm COP /sqm RESEARCH & FORECAST REPORT S INDUSTRIAL Graph 5 DEMAND PRICES Via 40 64% Calle 30 33% 3% GROSS ABSORPTION DISTRIBUTION BY SUBMARKET In the second half of 2011, it is estimated that the gross warehouse absorption registered in 85,829 square meters, eight times the one presented in the same period of last year. Analyzing the gross absorption by submarket, it is found that Via 40 and Calle 30 have a participation of 97% of the total demand, behavior caused by the necessity of some companies to occupy greater industrial spaces of more than 3,000 square meters at a low price, where these can only be found in this zones. In contrast, the other submarkets don t participate actively in the absorption of built spaces, behavior caused by the new trends of warehouse commercialization. It is estimated that the demand for 2012 will remain stable as a result of the moderate construction of warehouses presented. The rental prices for the second semester of 2011 registered a decrease of 7% when compared to same period of last year, closing in COP$ 8,850 (US$ 4.6) per square meter, this is caused by the growing supply of warehouses located in stand alone sites with lower specifications. Analyzing the rental prices by submarket, it is found that Juan Mina and, are consolidated as the most expensive zones of the city because of their strategic location and the new industrial developments that have emerged. The average rental prices in these zones are COP$ 13,300 (US$6,9) and COP$ 10,150 (US$ 5.2) per square meter, in the same order. Concerning warehouse sale prices, these increased 25% when compared to the same period of last year, in contrast, sale prices of industrial lands decreased 4%. Graph 7. WAREHOUSE RENTAL AND SALE PRICE RANGE $ $ ,9 6,5 6,2 6,2 5,4 US$ WEIGHED AVERAGE RENTAL PRICE RANGE BY SUBMARKET $ $ ,7 2,3 2,6 $ 0 Juan Mina Via 40 Calle 30 $ $ $ US$ WEIGHED AVERAGE SALE PRICE RANGE BY SUBMARKET $ $ $ Malambo Calle 30 Via 40 Barranquillita P. 4 COLLIERS INTERNATIONAL

Conceptual Aspects A geographically delimited area designed specifically for the construction of industrial premises, with adequate location, infrastructure, equipment, and services conditions, as

5 Conceptual Aspects A geographically delimited area designed specifically for the construction of industrial premises, with adequate location, infrastructure, equipment, and services conditions, as well as a permanent administration of its operations. Submarket Geographic area considered as an analysis sector, it corresponds to a geographic zone where a concentration of real estate classes are found, which are studied. Class A Industrial Warehouses Premises with ten or fewer years since built, located near to principal access road and within the more representative corridors, triple height, high floor resistance and additional services of offices and material management. It has a significant area compared to the average market area. Class B Industrial Warehouses Premises with more than ten years since built, located near to secondary access road, simple or double heights and limited additional services. Generally, it has an area lower than the average market value. Consulted Articles DANE Indicadores Económicos September BBVA Research Fuerte crecimiento económico en el 3T11, December PORTAFOLIO Economía colombiana creció 7,7% en tercer trimestre, December PROEXPORT Un Aliado Estratégico Para Empresarios Internacionales, August 2011 DEPARTAMENTO NACIONAL DE PLANEACIÓN Mayores exportaciones y más empleo traerá TLC con Estados Unidos, August DANE Principales Resultados del Mercado Laboral a Noviembre de 2011, December BBVA Research Situación Latinoamérica (TFZ) Delimited territory where tax benefits may be enjoyed, as non payment of import duties for goods or non payment of some taxes. GDP (Gross Domestic Product) Total value of goods and services produced within a country in a determined period of time. Manufacturing Warehouses A facility used for the conversion, fabrication and/or assembly of raw or partly wrought materials into products or goods. Storage Warehouses A facility primarily used for the storage of materials, goods, and merchandise. Distribution Center Type of warehouse facility designed to accommodate efficient movement of goods. These facilities are primarily used for staging loads. Flex Warehouses Industrial building designed to allow its occupants flexibility of alternative uses of the space. Specialized flex buildings include service center and show rooms. Cuarto Trimestre 2011, November CÁMARA DE COMERCIO DE BARRANQUILLA Boletín Económico Regional Fudesarrollo, December EL HERALDO Barranquilla entre las ciudades de América Latina más atractivas para nuevos negocios, December PROBARRANQUILLA Razones para invertir en Barranquilla, November EL HERALDO En 2012 Barranquilla tendrá parque en la rotonda de la Calle 17, December EL PORTAFOLIO - Avanza el Parque Industrial y Portuario del Caribe (Pipca), June offices in 61 countries in 6 continents United States: 135 Canada: 39 Latin America: 17 Asia and Pacific; 194 EMEA: 95 billion in annual revenue million of square meters under administration professionals RESEARCHER: Bogotá, Colombia Aurora Turriago Market Research Manager Cra. # Tower 2, 16 th Floor TEL ext. 220 FAX This document has been prepared by Colliers International and is informative. The information has been provided by reliable sources and is presented in the exact form it was received. The sources include real estate associations and councils, and government agencies, among others. Colliers International does not guarantee or take responsibility for the accuracy of the information provided, any interested part must take responsibility for its own research on the exactitude of the information. Colliers International excludes all inferred or implied terms, conditions and warranties that may arise regarding this document and excludes all liability for damages that may arise. This report and other research papers can be found on our web site Colliers International provides global real estate services through 15,000 professionals in over 512 offices in 61 countries. Colliers has annual revenue up to US$ 2 billion, an annual volume of transactions worth over U.S.$ 53 billion and has over 91 million square meters under management. Accelerating success.

>> Industrial Rents Continue Upward

Research & Forecast Report South Bay INDUSTRIAL Q1 2017 Accelerating success. >> Industrial Rents Continue Upward Key Takeaways > Industrial rents increased $0.03 P NNN over the quarter to $0.78 P NNN.