Economic Overview RESEARCH REPORT BRAZIL I RIO DE JANEIRO RESEARCH & FORECAST REPORT.

Transcription

1 2º SEMESTRE 2010 ESCRITÓRIOS BRAZIL I RIO DE JANEIRO RESEARCH & FORECAST REPORT RESEARCH REPORT COLLIERS OFFICES IN BRASIL Economic Overview Based on consistent data and supported, especially, by the strong impulse of the internal demand, it is estimated that 2011 may record the highest economic growth of the last decades already witnessed in Brazil. This scenario may be even more favorable for the State of Rio de Janeiro, where growth may exceed the national average due to the increase in retail sales, industrial production and employment rate. According to the IBGE (Instituto Brasileiro de Geografia Estatística/ Brazilian Institute of Geography and Statistics), in November 2010 Rio de Janeiro presented a 4.9% unemployment rate, the lowest one in the last eight years, probably been even lower in December, due to the growth of temporary employment offer during the festivities period. This situation has produced significant advances in the region payroll that, summed with the increase in the credit offer, stimulate consumption, generating a virtuous circle of economic growth. ECONOMIC INDICATORS Current Previous GDP 7.6% -0.20% Inflation (IPCA) 5.91% 4.31% Inflation (IGP-M) 11.32% * -1.71% Exchange Rate (R$/US$) Unemployment Rate 5.7% * 8.10% (*) Estimative Favorable conditions Unfavorable conditions According to a study performed by FIRJAN (Federação das Indústrias do Estado do Rio de Janeiro/ Industries Federation of the State of Rio de Janeiro), a R$ billion investment was announced between 2010 and 2012, divided among the oil, infrastructure, manufacturing industry and other sectors. Petrobras will be responsible for R$ 77.1 billion from this total amount due to the Pre-Salt Layer. Moreover, important international events, such as the Military World Games in 2011, the World Cup in 2014 and the Olympic Games in 2016, will be hosted by the city of Rio de Janeiro, attracting huge investment in infrastructure, transportation and accommodation for the region. The IEC (Índice de Expectativa do Consumidor/ Consumer Expectation Index) for December 2010, published by the Fecomércio-RJ (Federação do Comércio de Bens Serviços e Turismo do Estado do Rio de Janeiro/ Goods, Services and Tourism Federation of the State of Rio de Janeiro) presented 2.41% increase when compared to December 2009, reaching the record of points the highest of the historical series started in 2000 demonstrating the strong confidence of the population on the economy. These factors reinforce the positive perspective for the economy of the Rio de Janeiro state during the next years, especially due to the importance of the investment that will be performed and the multiplying effects generated by them, stimulating the economy, generating jobs, increasing income and providing higher development to the region.

2 Market Overview The impact of this positive moment of the economy is strongly felt by the real estate market of the city of Rio de Janeiro. On each new quarter, Rio de Janeiro presents new records in the asked lease and sale values, figures that currently exceed the renowned São Paulo office market. Companies that started their expansion processes in 2010 found a difficult and really competitive scenario for leasing corporate areas that could meet their immediate needs. Despite the low offer, 2010 was a good year for the investment sector. Many transactions generated major repercussion in the market, such as the sale of the buildings Ventura Corporate Towers II (82% of the development), Rio Branco 115, Manchete and Sacadura Cabral. Inventory Distribution in % Constructions Companies and Developers have presented new projects for regions susceptible to expansion, for example, Barra da Tijuca. The strong investment in the transport area matter that until then could be considered an obstacle for many potential tenants that envision the site as an alternative became more evident after the subway expansion, creation of new bus lanes and the connection among the most important accesses of the city. The Península region (around the Ayrton Senna and Abelardo Bueno Avenues) has several areas that have already been disputed by the major market players. An increase is expected in the Retrofit activities in the Central region, where there is higher search for corporate area options. Inventory Evolution in sq.m The port region shall host new projects, once through the purchase of Cepac s (Certificados de Potencial Adicional de Construção / Additional Construction Potential Certificates ) securities it has medium potential to generate 200,000 sqm per year in new office areas, up to 2022, becoming an important real estate reference in the city of Rio de Janeiro. The current 415 thousand sqm that, regardless of the constructive potential of the port region, were already expected to supply the market up to 2013, represent 55% of the current stock and will lead the city of Rio de Janeiro to exceed the record of 1 million sqm corporate areas value reached only by the city of São Paulo until then. Future Inventory in sq.m Rio de Janeiro reaches half of the real estate expansion process that may have its pick between 2013 and As well as in 2010, the strong demand pressure shall remain reflected on the raise of lease and sale prices. The available spaces may remain scarce and the absorption may increase until the offer of properties is able to establish the vacancy rate around 7% - equilibrium point for the office market of the city of Rio de Janeiro. P. 2 COLLIERS INTERNATIONAL

3 Vacancy The vacancy rate fell from 5.2% to 2.8% when compared to the last quarter. It happened due to the confirmation of the lease of some floors available in the Ventura Corporate Towers development (Centro) and part of the occupation of the Américas Corporate (Barra da Tijuca). Other smaller occupations in Botafogo, Centro and Barra complement the decrease to 2.4%. Vacancy Rate - Closing Annual% The Leblon/Ipanema region appears with a 5.2% rate of available stock, the higher in Rio de Janeiro. Flamengo and Copabacana remain with their corporate areas occupied, with no expectation for the construction of new developments. 2 Semester of Semester of Semester of 2010 Vacancy Rate - 1st Semester x 2nd Semester at in % Vacancy Rate 2 nd Semester 2010 by Region in% 1 Semester 2 Semester Dawtown Absorption The absorption during the second half of 2010 may be considered low, once, from the 20 thousand sqm absorbed, 80% refer to the occupation of the contiguous area in the Americas Corporate, Le Monde and Ventura Corporate Towers complexes. There were no reasons that could justify absorption similar to the 1st Half because, the O2 Corporate and Rio Branco 115 developments which would be delivered in 2010 and together represent almost 90,000 sqm had their delivery postponed to The Centro remains the region with the highest demand in the city. The profile of buildings with large slabs and the excellent infrastructure remain attracting the multinational companies in expansion. Both the Retrofit works that are already ongoing and the new developments that shall be erected may be quickly absorbed, according to the law of supply and demand. The cumulative demand increases annually and shall keep this rhythm during the next years, with the presence of the new stock. Absorption Semester 2010 in sq.m Absorption by Region in sq.m 1 Semester 2 Semester Dawtown COLLIERS INTERNATIONAL P. 3

4 Prices The average prices in the city of Rio de Janeiro kept the increasing rhythm on the 2nd half, as well as during the whole % increase was recorded, reinforcing the position of the office market of the city of Rio de Janeiro as the most expensive square meter in the country. Average Value Lease - 1st Semester x 2nd Semester 2010 US$/sq.m 2 Semester of 2010 The Leblon and Ipanema regions had the highest lease and sale value, with an average of R$ /sqm for lease and oscillation from R$ 20,000/sqm to R$ 25,000/sqm for sale value, not influencing companies that demand the low offer in this region. 1 Semester of 2010 Comparing the average lease values of the last periods of 2008 and 2010 when the economy presented strong acceleration the increase is almost 30%. The Barra da Tijuca and Centro regions are the ones that have the highest potential for the development of real estate business. Differently from São Paulo, Rio is positioned in the middle of the process of the market cycle that, in the current expansion moment, leads to constant price increase. Average Value Lease - Annual closing at US$/sq.m Mean Values by Lease Area in sq.m 2 Semester of Semester of Semester of 2010 Dawtown Maravilha Port The Maravilha Port project had part of its construction works initiated on the second half of 2010, right after R$ 8 billion being provided by the federal government as resources for the implantation. This investment is originated from a resource line of the FGTS (Fundo de Garantia por Tempo de Serviço) called Investment Fund, through which borrowers may invest up to 10% of the resource balance in infrastructure projects in the country. There is great real estate speculation in the area. The interest of investors has proved to be much higher than expected. The Tishman Speyer company purchased for about R$ 200 million the 13-thousand-sqm land that housed the former Moinho Marilu in order to build a sophisticated 18-floor office building. Expropriations are in process on the Sacadura Cabral and Barão de Tefé streets. The old and already degraded properties may be negotiated with the market or renewed for the implantation of affordable housing. The drainage services of the construction works have been in process since August 2010 and in November, the project had its first work concluded the new road access for the Port directly through the Caju neighborhood. P. 4 COLLIERS INTERNATIONAL

5 Map of the Regions of Rio de Janeiro surveyed by Colliers Business General Activity - São Paulo The study of the occupation profile in buildings considered high standard in the city of Rio de Janeiro indicates that the petrochemical sector is predominant in the city, and almost all the areas are located downtown. In its composition we computed all Petrobras offices and the companies that render services directly to it. The financial sector occupies the second place with strong presence in the region. Self-employed professionals, with 8 percentage points, are majorly present in Barra da Tijuca. Distribution of Business Activity - SP MARKET INDICATORS 1 semester semester 2010 CURRENT MARKET Average Vacancy Rate: 5.2 % VANCANCY RATE 2S 2010 Absorption: 17,940 sq.m ABSORPTION UNDER CONSTRUCTION Total Average Asking Lease Price: US$ 74,10/sq.m/month Under Construction and projected: 422,803 sq.m PRICE P. 5 COLLIERS INTERNATIONAL

6 2010 Overview 1 SEMESTER *Final stock of the period: million usable sqm, with 5.2% vacancy *The highest Vacancy rate was in Barra da Tijuca with 8.94% *63,000 sqm delivered in new buildings and 37,700 sqm in Retrofits *The total average net absorption was 77,769 sqm. *The average asked lease price charged identified for class A+ and A buildings was a minimum of US$ 47.90/sqm (Flamengo) and maximum of US$ /sqm (Leblon/Ipanema) *Buildings being constructed / sqm: 387,293 sqm 2 SEMESTER * Vacância cai de 5.2% para 2.8% * A maior taxa de vacância foi em Leblon/Ipanema com 5.2% * O total líquido absorvido foi de 17,940 m² em razão da falta de nova oferta * Alta de 3,15% nos valores de locação médios em relação ao último trimestre * Edifícios em construção totalizam 422,803 m² * Postergado a entrega do Rio Branco 115 (Centro) e O2 Corporate ( Barra da Tijuca) COLLIERS INTERNATIONAL P. 6

7 STATISTICS TABLE CLASS A+ and A CURRENT VACANCY RATE AVERAGE ASKING AVERAGE ASKING NUMBER OF ABSORPTION REGION INVENTORY VACANCY PREVIOUS LEASE PRICE LEASE PRICE BUILDINGS IN SQ.M RATE QUARTER (R$/SQ.M) (US$/SQ.M) Barra da Tijuca , % 4.2% Botafogo 8 124, % 4.6% Centro , % 1.9% Copacabana 1 10, % 0.0% Flamengo 1 7, % 0.0% Leblon / Ipanema 4 20, % 5.2% offices in 61 countries on 6 continents United States: 135 Canada: 39 Latin America: 17 Asia Pacífic: 194 EMEA: 95 US$ 2 billion annual revenues 2,4 billion sq.m under management Over 15,000 professionals TOTAL ,752 Exchange Rate : US$ 1.00 / R$ % 2.8% CONTACT AND OFFICES IN BRAZIL R. Olimpíadas, andar São Paulo SP TEL REAL ESTATE MARKET GLOSSARY Av. Almirante Barroso, 63 - sl Rio de Janeiro RJ TEL Absorption area: Area occupied (sq.m) since the previous period Building Classification: Properties are classified as A+, A, B and C Stock / Inventory: Built-up area in sq.m Av.Gov. Agamenom Magalhães, sl Recife PE TEL Vacancy Rate: Relationship between available area and total area Free Ceiling Height: Height from finished floor to the first structural interference Build to Suit: Built and customized for the company occupying the building COLLIERS INTERNATIONAL BRAZIL SERVICES FOR OFFICE, RETAIL, INDUSTRIAL, LAND, URBAN AND RURAL AREAS Sales and Leasing Build-to-Suit and Sale & Leaseback transactions LEANDRO ANGELINO COORDINATOR RESEARCH AND MARKET INTELLIGENCE DIVISION TEL Tenant and Landlord Representation Investment Real Estate Consulting and Appraisal Research and Market Intelligence Disposals Lease Administration Portfolio Advisor This document was prepared by Colliers International only for publicity and general information. Colliers International gives no warranties, representations or assumes responsibilities of any kind, express or implicit, regarding to this information, including - but not limited to - warranties of contents, accuracy and reliability. All interested parties should undertake their own investigations on the accuracy of information. Colliers International unmistakably excludes all inferred or implicit terms, conditions and responsibilities arising from this Investments Accelerating success.