1 st quarter 2013 OFFICE SÃO PAULO Market Report OFFICE CLASSES A+, A AND B OFFICE MARKET REPORT COLLIERS CHANGED ANALYSIS PARAMETERS IN 2013 Existing Inventory: 3.77 Million sqm Under Construction Inventory: 830 thousand sqm Availability: 9.0% Net Absorption: 63 thousand sqm Average Asking Price: R$ 109/sqm/month The office market changed positively in the last five years. Led by the country s economic moment, the demand increased, becoming more challenging and attentive to the market statistics. The mentioned evolution considers technical and conceptual aspects. New technologies are used in the maintenance and construction of new buildings. Part of this new constructive model refers to the sustainable buildings (Green), which changed the way of analyze the current A+ and A properties. Corridor Regions: Regions called corridor, for example, and, have now a different understanding. The main modification is about the necessity to have the building address in their corridor or in the corner of it. In order to balance and transmitting information with more accuracy, Colliers International Brazil changed the analysis parameters from the first quarter of 2013. Main Changes: Reclassification: All buildings monitored by Colliers were reclassified. Evaluate the inventory each five years provides solid and real statistics in accordance with the constructive evolution of the city, since the market is not static and suffers the effects of age. Class B: After the reclassification, some of this inventory composition migrated from class A and still have strong commercial appeal. Another reason about the increase of demand and prices, leading part of the tenants for class B properties. Changes in the Region s Perimeter and New Nomenclatures: The old Marginal region was divided and is now composed by the adjacent regions (northbound). Southbound modification is represented by regions Butantã, and.. The old region Berrini changed the nomenclature for and extended its perimeter to avenue. region was subdivided and now receive the name of between the limits of the avenues Eusébio Matoso, and Juscelino Kubitschek (odd side). www.colliers.com.br
<< Alphaville 18 km International Airport (Guarulhos) >> 22 km Rod. Castelo Branco Marginal Tietê Marginal Av. Rebouças NEW OFFICE PRIMARY REGIONS MAP 2013 Av. Bandeirantes Av. Nações Unidas Chácara Sto. Antonio Domestic Airport (Congonhas) Collies International Corporate Office SÃO PAULO Availability After the end of the first quarter, São Paulo office market presented a greatest performance if compared to the previous periods. The availability rate (classes A+, A and B) was 9.0%, a similar level that Colliers understand as a balance rate between supply and demand. Considering the class A + and A market, the 13.3% availability rate is in theory, a favorable condition for potential tenants. Approximately 70% of 341 thousand sqm available in the market are originated from areas in buildings delivered from 2012 onwards. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Origin of Available Area - 341 Thousand sqm Available Areas Remaining From Buildings Delivered in 2012 Onwards. p. 2 Colliers International
Among the primary regions (where there is at least one building class A + or A) monitored by Colliers, had the highest percentage, 30.7%, due to the available area in one of the buildings that compose the development Corporate Towers. The highest amount of square meters are located in the region of that although the percentage of 14.1%, has the largest inventory among primary regions. The regions, and presented the lowest availability rates. EXISTING INVENTORY X AVAILABILITY (%) BY REGION 700,000 600,000 558 30.7 586 35.0% 30.0% 500,000 400,000 300,000 200,000 100,000 0 107 3.4 9.5 222 7.2 17.0 102 369 16.6 334 5.5 224 1.9 125 330 5.7 281 5.5 272 0.6 263 14.1 4.0 25.0% 20.0% 15.0% 10.0% 5.0% 0% Chácara Santo Antonio Existing Inventory (sqm) Availability (%) Net Absorption The increase in quarterly net absorption improved the perspectives about the corporate market of São Paulo. Considering the absorption among classes A +, A and B, the market absorbed 63 thousand sqm. The regions with the highest share in the total are, and Cidade Jardim, which together have a representation of 76% of total absorbed. Considering only leased areas (gross absorption), the recorded number is 115 thousand sqm. Net Absorption: 63 Thousand sqm Gross Absorption: 115 Thousand sqm NET ABSORPTION (THOUSAND SQM) BY REGION 20,000.00 18 17 15,000.00 13 10,000.00 9 5,000.00 2 1.5 1.2 2.3 3.4 0.00 5,000.00-3.9-0.5-0.3-0.7 10,000.00 Chácara Santo Antonio Colliers International p. 3
Prices AVERAGE ASKING LEASE PRICES BY REGION (R$/SQM/MONTH) The average asking lease prices presented a similar situation as seen in the previous quarter. The difference is explained by the inclusion of class B properties and the reclassification as mentioned before. The highest prices are in regions of, and. Some commercial practices are now coming back to the market such as, grace period and delivery conditions. Actually, the market has more acceptance for buildings delivered with a better internal infrastructure as ceiling, floor and lighting, for example. In the case of absence, the future tenant can have its occupancy delayed up to three months. The trend throughout the year is to maintain the prices relatively stable being the increases or decreases occurring due to the delivery of new buildings. 65 113 80 Chácara Santo Antonio 146 158 139 96 86 129 119 100 57 131 Statistics Table REGION TOTAL AREA PRICES (R$/SQM/MONTH) AVAILABLE AREA AVAILABILITY (%) 107,451 R$ 60.14 2,156 3.4% i 558,601 R$ 112.89 45,535 8.2% Chácara Santo Antonio 222,134 R$ 80.28 15,940 7.2% 102,431 R$ 145.83 11,680 11.4% 369,949 R$ 158.00 53,832 14.6% 334,106 R$ 139.25 24,788 7.4% 224,116 R$ 96.02 4,155 1.9% 125,239 R$ 86.67 38,488 30.7% 330,121 R$ 129.82 9,011 2.7% 281,732 R$ 119.81 23,613 8.4% 272,144 R$ 100.67 14,085 5.2% 263,830 R$ 57.10 18,018 6.8% 586,913 R$ 131.41 80,403 13.7% total 3,778.767 R$ 109.07 341,704 9.0% ALPHAVILLE Alphaville office market presented a net absorption above of expectations for one more consecutive quarter. The 6 thousand sqm was not enough for a significant decrease in the availability rate. The average asking lease prices are stable for a long time, a factor that does not contributes for local development. In a second analysis, it is possible to say that the Alphaville office market presents high quality buildings equal or superior to most of buildings located in the city of São Paulo, in commercial conditions more favorable for the tenant. Net absorption shall remain constant in the coming quarters, which will contribute to slow down the decrease of availability rate. Approximately 72 thousand sqm may enter in the region during the year. Statistics Table REGION TOTAL AREA PRICES (R$/SQM/MONTH) AVAILABLE AREA AVAILABILITY (%) Alphaville 469,843 R$ 58.06 161,365 34.3% p. 4 Colliers International
COLLIERS OPPORTUNITIES Paramout Chácara Sto. Antônio - SP Total Area: 2,214sqm Ref: 3116 DOMO Corporate ABC São Bernardo do Campo - SP Total Area: until 1,493sqm Ref: 3109 Colliers International More than 482 offices in 62 countries in 6 continents Joseph Kryss - SP Total Area: 9,000sqm Ref: 3089 Ed. NBC Sale Barueri - SP Total Area: 3,109sqm Ref: 3063 USA: 140 Canada: 42 LATAM: 20 Asia: 38 ANZ: 157 EMEA: 85 Ed. Jabaquara Jabaquara - SP Total Area: 5,219sqm Ref: 3041 Bela Cintra Tower - SP Total Area: 3,644sqm Ref: 3106 US$ 1,95 billion in annual revenue More than 104 millions sqm under management More than 13,500 profissionals CONTACTS REAL ESTATE MARKET vocabulary Sao Paulo R. Olimpíadas, 205 04551-000 Sao Paulo SP TEL +55 11 3323 0000. 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. Tenant and Landlord Representation - Leasing, Acquisition and Sale. Advisory and Disposals for real estate assets and/or portfolios. Build-to-Suit and Sale & back Operations. Administration and Property Management. Real Estate Valuation for Leasing, Acquisition, Sale and Guarantee. Market and Technical-Financial studies, Highest and Best use studies Rio de Janeiro Av. Almirante Barroso, 63 20031-003 Rio de Janeiro RJ TEL +55 21 2524 4242 Recife Av.Gov. Agamenom Magalhães, 4.575 50070-160 Recife PE TEL +55 81 3037 2222 Fortaleza Av. Dom Luis, 807 60160-230 Fortaleza CE TEL +55 11 8171 2727 More information: RESEARCH AND MARKET INTELLIGENCE research@colliers.com.br OFFICE office@colliers.com.br. Advisory for Investment Funds and Private Investors. Research and Market Intelligence. Green Consulting for LEED certification This document was prepared by Colliers International Brazil. All information in this material may be changed without prior notice. Colliers International is a worldwide affiliation of independently owned and operated companies. This publication is the copyrighted property of Colliers International and /or its licensor(s). 2013. All rights reserved. Accelerating success. www.colliers.com.br