Download Chile Overview

CBRE CHILE
October 2011
Chile Overview
Office and Industrial Market
CBRE Chile Capabilities
CBRE | Page 2
Chile Overview
Introduction
Key Facts
Human development Index
Chil iin th
ld
Chile
the W
World
The UF Factor
CBRE | Page 3
Chile Overview
ƒ Chile is one of the most politically stable countries in Latin
America. The wide diversification of its exports and the general
economic stability which began in the early 1980’s has allowed
Chile to construct economic prosperity sustained by natural
resources (mostly metals), the timber industry, and marine
resources.
ƒ The Chilean financial system is considered the most advanced
in Latin America. The country enjoys legal security, prides itself
in its respect for the law and boasts a transparent financial
market.
ƒ In May 2010 Chile became the first South American country to
join the OECD. In 2006, Chile became the country with the
highest nominal GDP per capita in Latin America.
Political and Economical environmental:
ƒ Political and institutional stability.
ƒ 2010 GDP Per Capita at Purchasing Power Parity over passed US$15.000.
ƒ Decreasing
D
i unemployment
l
rate reaches
h 7% in
i llast months.
h
ƒ Prudent macroeconomic policy - High domestic savings rate.
ƒ Sustained long-term economic growth – resumed strongly in 2010, despite earthquake.
ƒ Foreign capital concentrated in medium and long term investments.
y
ƒ Solid bankingg system.
ƒ Inflation risk - increasing interest rates - negative effects on property sales.
CBRE | Page 4
Chile Overview
Key
y facts
ANNUAL DATA
2010a
HISTORICAL AVERAGES (%)
Population (m)
GDP (US$ bn; market exchange rate)
GDP (US$ bn; purchasing power parity)
GDP per head (US$; market exchange rate)
GDP per head (US$; purchasing power parity)
Exchange rate (av) Ps:US$
17.1
196 8
196.8
257.4
11,510
15,056
b
510 3
510.3
Population growth
Real GDP growth
Real domestic demand growth
Inflation
Current-account balance (% of GDP)
FDI inflows (% of GDP)
a
b
2006-10
1.0
33
3.3
6.1
3.8
2.1
76
7.6
Economist Intelligence Unit estimates.
2010 average
MAJOR EXPORTS 2009
Copper
Cellulose
Fresh fruit
LEADING MARKETS 2009
China
US
Japan
Brazil
% OF TOTAL
50.1
4.9
5.6
% OF TOTAL
16.4
11.2
9.0
6.7
Source: The Economist Intelligence Unit, www.eiu.com February 1st 2011
CBRE | Page 5
MAJOR IMPORTS 2009
Intermediate goods
Capital goods
Consumer goods
LEADING SUPPLIERS 2009
US
China
Argentina
Brazil
% OF TOTAL
54.2
16.3
20.6
% OF TOTAL
23.6
13.9
10.5
9.4
Chile Overview
2010 UN Human Development
p
Index
#
1
4
26
45
46
54
56
63
75
77
79
89
95
COUNTRY
NORWAY
USA
UK
Chile
Argentina
g
Panama
Mexico
Peru
Venezuela
Ecuador
Colombia
China
Bolivia
The United Nations Human Development Index synthesizes four
primary development statistics,
statistics which measure health,
health education,
education and
income.
Some of the values for Chile are:
ƒ Life expectancy at birth: 78.8 years
ƒ Adult literacy rate: 96.9%
ƒ Combined primary, secondary and tertiary
ƒ Education enrollment ratio: 82.5%
Source: United Nations Development Program (www.hdr.undp.org)
Capital: Santiago – Ranked 2nd out of 140 Latin American cities in the Economist Intelligence Unit´s 2009 Liveability
Survey.
CBRE | Page 6
Chile Overview
2011 R
Ranking
ki off Economic
E
i Freedom
F
d
B t Places
Best
Pl
t Do
to
D B
Business
i
2010
2010-2014
2014
ƒ Chile is #11 out of 183 countries
ƒ Chile is #15 out of 82 countries
Source: Heritage Foundation 2011, www.heritagefoundation.com
RANK
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
COUNTRY OVERALL SCORE
Hong Kong
89.7
Singapore
87 2
87.2
Australia
82.5
New Zeland
82.3
Switzerland
81.9
Canada
80.8
Ireland
78.7
Denmark
78.6
United States
77.8
Bahrain
77.7
Chile
77.4
Mauritius
76.2
Luxembourg
76.2
Estonia
75.2
74.7
The Netherlan
United Kingdo
74.5
Finland
74.0
Cyprus
73.3
Macau
73.1
Japan
72.8
Source) : Economist Intelligence Unit ,www.eiu.org
Singapore
Switzerland
Finland
Canada
New Zeland
United States
Germany
Chile
Ireland
France
Mexico
Brazil
Peru
Colombia
1
2
3
5
8
13
14
15
17
19
35
40
45
51
0
20
40
60
Risk Ranking (*)
ƒ Chile is #27 between 0 (minimum) to 100 (maximum)
Source: The Economist Intelligence Unit 2010, www.eiu.com
C
Corruption
ti P
Perception
ti Index
I d
ƒ Chile is #25 out of 180 economies
Source: Transparency International 2009
www.transparency.org
New Zeland
Denmark
Singapore
Sweden
Australia
United…
United…
Chile
Portugal
g
Costa Rica
Brazil
China
Mexico
Ecuador
CBRE | Page 7
1
2
3
5
14
19
24
25
32
63
75
75
75
89
Norway
Switzerland
Canada
United States
Germany
Chile
France
China
Peru
Australia
Japan
United Kingdom
Mexico
India
Brazil
Argentina
Irak
Zimbawe
10
16
20
20
21
27
30
33
33
36
37
37
41
42
43
61
76
89
Chile Overview
UF factor
ƒ The Unidad de Fomento (UF) is an essential factor to
understand Chilean market.
ƒ The UF is an artificial currency that adjusts daily to inflation of
previous month. It is a Unit of account that is used only in Chile.
The exchange rate between the UF and the Chilean peso is
constantly adjusted to inflation so that the value of the Unidad de
Fomento remains constant.
ƒ It was created on January 20, 1967, for the use in determining
principal and interest in international secured loans for
development, subject to revaluation according to the variations of
inflation. Afterwards it was extended to all types of bank
loans, private or special financing, purchases or investments on
installments, contracts, the majority of real estate
operations, such as lease contracts, leasebacks and mortgage
loans, use it. Individual payments are made in Chilean pesos
(the country's legal tender), according to the daily value of the
UF
UF.
ƒ Also it is used in legal standards such as the par value of
stock/capitalization of companies, fines, etc. It has become the
preferred and predominant measure for determining the cost of
construction values of housing and any secured loan,
construction,
loan either
private or of the Chilean government.
DATE
12-31-2010
12-31-2009
12 31 2008
12-31-2008
12-31-2007
12-31-2006
12-31-2005
12 31 2004
12-31-2004
UF
1
1
1
1
1
1
1
CLP $
21,455.55
20,942.88
21 452 57
21,452.57
19,622.66
18,336.38
17,974.81
17 317 05
17,317.05
USD$
45.2
41.8
33 0
33.0
39.3
34.8
34.9
30 1
30.1
Due to UF effect,
D
ff
rent values
l
are constant along
l
time,
i
usually
ll escalation
l i iis not needed
d d iin contracts off three
h to fifive years
period.
CBRE | Page 8
Santiago Commercial Real Estate
Office Market
Industrial Market
CBRE | Page 9
Office Market
A well developed
p market
SUBMARKET
CLASS A (sqm)
Las Condes
1,138,573
Providencia
210,622
Santiago Centro
282,153
Vitacura
TOTAL
32,834
1,664,182
Source: CBRE Santiago MarketView, Chile, 2T11
Santiago marketplace shows a diverse offer of class A, and B offices. Counting just completed buildings, there are more
th 33.157.000
than
157 000 sqm (plus
( l another
th 500
500.000
000 sqm currently
tl under
d construction).
t ti ) Cl
Class A andd A
A+ are 11,664,182
664 182 sqm,
concentrated mostly in Las Condes (68%). Providencia is the main market for class B.
CBRE | Page 10
Office Market
A well developed
p market
CLASS A AND A+ OFFICES
(SQM)
CITY POPULATION
(MM)
OFFICE (SQM/PER
CAPITA)
34,387,000
8.00
4.30
London
6,449,814
7.50
0.86
Santiago
1,623,000
5.40
0.30
Mexico City
3,080,938
19.30
0.16
Sao Paulo
1,796,000
20.30
0.09
Buenos Aires
855,489
12.90
0.07
Lima
402,000
8.50
0.05
New York
Source: CBRE , 4T10
According
cco d g too itss populationpopu a o Sa
Santiago
ago has
as a very
e y de
developed
e oped C
Class
ass A ooffices
ces market,
a e , in relation
e a o too thee rest
es oof Latin
a American
e ca
cities.
CBRE | Page 11
Office Market
Class A Rent Values and Vacancy
y
Vacancy
14 00%
14.00%
0.6
12.00%
0.5
10.00%
0.4
8.00%
0.3
6.00%
02
0.2
4 00%
4.00%
0.1
2.00%
0
0.00%
Trends
2000
2001 2002
2003
2004
2005
2006
2007
2008
2009
Vacancy rrate
UF/sqm Av. rent value
U
Average Rent Value
07
0.7
Vacancy
Lease Rates
Construction
2010 2T11
ƒ
The financial crisis caused a reduction of transactions, meaning a slight rising on office market vacancy
during 2009, but it just reached 4%, from under 1% prior level. Last peak in vacancy was after Asian
crisis, which toke a longer
g time to recovery.
y
ƒ
In spite of the low vacancy and the scarce new supply projections for the next quarters, the rental values
observed in class A show no increases.
ƒ
Contracts in Chile have an average duration of 3 to 5 years, and local legislation requires that the parties
involved comply with the total agreed term,
term which is why in rental negotiations the parties have a long
term vision, not very sensitive to circumstantial stock variations.
ƒ
1UF = US$ 46,46 as of 06/30/11
CBRE | Page 12
Office Market
Class A Most Recent New Supply
pp y
1Q11, Edificio de las Artes
46.176 sqm, Las Condes
4Q10, Parque Sur,
22 888 sqm, Las
22.888
L C
Condes
d
CBRE | Page 13
4Q10, Plaza San Damián
15.457 sqm, Las Condes
3Q10, Alcántara Building
16 172 sqm, Las
16.172
L C
Condes
d
4Q10, Apoquindo 4700
8.500 sqm, Las Condes
2Q10, Arrau Building
21 000 sqm, Las
21.000
L C
Condes
d
1Q10, Titanium La Portada
75.000 sqm, Las Condes
LEED
Industrial Market
Good performance
p
1
1
North
2
South
3
4
4
3
2
Central
West
ƒ We define storage centers as facilities
where the primary purpose is to offer space
with uses such as receipt, storage, and
redistrib tion of goods.
redistribution
goods We also include
incl de flex
fle
space with offices for rental that have more
than one user, and common areas under a
central administration. The survey performed
considered centers of at least 15,000
,
usable
sqm of storage facilities.
ƒ At present, the total usable aggregate
surface of surveyed centers that meet the
previously
p
e ous y mentioned
e t o ed c
criteria
te a is
s 1,710,377
, 0,3
sqm, distributed in 36 centers owned by 18
different owners.
ƒ Markets in Chile have been very
active,, and the Industrial Warehousing
g
Centers are not an exception. After a 2009
that reflected the effects of the global
financial crisis, significant reactivation has
been observed during the 2010, evidenced
b the
by
th entry
t off new centers,
t
th absorption
the
b
ti
of important areas, with the consequent
reduction in vacancy and a slight upward
pressure in rental values.
Continuing with the tendency observed during the previous year, the first half of 2011 again showed a strong increase in
supply.
CBRE | Page 14
Industrial Market
Storage
g Centers over 15.000 sqm
q
SUBMARKET
USABLE AREA
m2
VACANCY
%
ABSORPTIONm2
NEW SUPPLY
m2
CONSTRUCTION
m2
North
693,291
1.57%
24,209
19,635
South
285,561
4.20%
42,788
53,788
-
0.11
18,895
1.85%
1,456
-
-
0.12
712 630
712,630
0 03%
0.03%
60 300
60,300
60 000
60,000
98 500
98,500
0 11
0.11
1,710,377
1.37%
128,753
133,423
238,764
0.12
Central
West
TOTAL
140,264
LEASE VALUE
UF/M2/mes
0.13
Source: CBRE Santiago Industrial MarketView, Chile, 1S11
ƒ The dynamic activity of the industrial warehousing center market reflects the behavior of an economy that exhibits
sustained g
growth and high
g expectations
p
of future development.
p
ƒ Although the earthquake of February seriously damaged the facilities of two centers, the area currently in
reconstruction amounts to a mere 2% of the total available square meters. This implies two good news: first, that the
quality of the warehouse constructions - just like that of the capital
capital’s
s high-rise
high rise buildings - satisfactorily passed a
quality test, which enhances their attributes in the eyes of foreign investors. Second, it is important to note that the
significant reduction observed in vacancy is explained chiefly by the greater economic activity, and not by a reduction
in the areas available.
available
CBRE | Page 15
Industrial Market
Stability
y
14%
0.12
12%
0.10
Trends
10%
8%
0.08
6%
0.06
4%
Vacancy Rate
Avera
age lease rent U
UF/sqm/month
0.14
Vacancy
Lease Rates
Construction
0.04
2%
0.02
0%
2S.06 1S.07 2S.07 1S.08 2S.08 1S.09 2S.09 1S.10 2S.10 1S.11
Source: CBRE Advisory Group, Chile, 2S10
• The behavior of vacancy indicates a reactivation of the warehousing market, since not only the stock that was vacated
during the crisis has decreased, but the new 2010 entry, which exceeded 230,000 sqm, has been rapidly absorbed.
• If economic activity maintains its pace shown during the last year, the market should easily absorb the square meters
currently under construction. Consequently, vacancy should maintain its historical levels of under 4%.
• A rising trend in rents was seen in the second half of 2010 for some centers. Yet rents remained virtually constant on
average because space came onto the market lower in price due to less-exigent standards or non-prime locations.
• Although demand has been increasing abruptly, supply is also growing rapidly. Therefore, a stability is predicted in
vacancy and in the rent trends for the coming semesters. Rents have tended to rise consistently, at a very hesitant
pace, which should continue provided demand continues to grow more quickly than supply and vacancies stay below
equilibrium levels.
• The stable upward trend is maintained, and continuity is observed in this market’s variations.
CBRE | Page 16
Industrial Market
Storage
g Centers most recent new supply
pp y
Megacentro Renca
Megacentro San Bernardo
1S10,Centro Industrial Abertis
Logisticspark Santiago,
Santiago located in the
commune of Pudahuel (West Zone); its
first stage totals a net floor area of 20,000
sqm. It has a total area of 63
hectares, where 335,000 sqm of
warehouses for lease and 15,000 sqm of
services will be built.
1S10, La Farfana Warehousing
Center owned by Bodegas San
Center,
Francisco, located in the commune of
Pudahuel (West Zone); its first stage totals
a net floor area of 29,000 sqm , and the
project includes the construction of more
than more than 700,000 sqm of warehouse
space, with which it will be the country’s
largest warehousing center.
2S09, C
2S09
Centro
t IIndustrial
d ti lS
Santa
t
Margarita, located in the San Bernardo
district (South Zone submarket), has an
approximate net floor area of 27,667 sqm.
A strategic location with access through
Autopista
p Central,, Américo Vespucio
p
and
Lo Espejo.
1S09, Centro
1S09
C t Lo
L Boza
B
II off
Flexcenter, located in the commune of
Pudahuel (North Zone), has an approximate
net floor area of 14,000 sqm. It combines
Storage Facilities and office space, with topggrade finishes. This Center was built in the
same site as Centro Lo Boza I.
Megacentro Cordillera
2S10 Megacentro is a complex currently
composed by 3 centers, which was
consolidated during 2010, after being
acquired, remodeled and enlarged from
existing facilities, with different former uses.
The 3 centers are located in Quilicura, with
57,000 m2 of usable storage space, San
Bernardo, with 25,000 m2 and Renca, with
13,000 m2.
CBRE | Page 17
CBRE Chile Capabilities
Global and local leadership
Location
Lines of business
CBRE | Page 18
CBRE Chile
ƒ
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and
S&P 500 company headquartered in Los Angeles,
is the world’s largest commercial real estate
services firm (in terms of 2010 revenue). The
C
Company
h
has
approximately
i
l 31,000
31 000 employees
l
(excluding affiliates), and serves real estate
owners, investors and occupiers through more than
300 offices (excluding affiliates) worldwide.
ƒ
ƒ
Isidora Magdalena Tower,
Tower where
Management & Commercial
areas are located
CBRE | Page 19
In Chile, CBRE employs over 120 people in 2
offices
ffi
l
located
t d in
i Santiago.
S ti
U i
Using
it strength,
its
t
th
resources and passion, CB Richard Ellis Chile
helps clients successfully anticipate market
opportunities, seize competitive advantages and
achieve their real estate objectives.
j
As globally, in Chile CBRE provides the major
integrated service platform in commercial real
estate market.
Centenario To
Tower,
er where
here
Management Services & backoffice areas are located
CBRE Chile
Santiago concentrates the main part of commercial real estate markets of Chile. This is the reason why the two
offices of CBRE are located in the same city. Miraflores is in downtown, and Magdalena, Las Condes, in the CBD.
Magdalena, Las Condes
Miraflores, Downtown
CBRE | Page 20
CBRE Chile
ƒ
With more than 12 years of experience in Chile, currently we have 120 professionals, inside our two offices in
Santiago, plus the personnel who work in our client’s premises, which are managed by our company; in total,
the human team that configures CBRE in our country, surpasses 500 people.
ƒ
We fit our capabilities to local reality and specific needs of our clients. We offer services in the following Lines
of Business:
Brokerage
Valuation
Property and
Facility
Management
Project
Management
CLIENT
Investment
Properties
Asset
Management
Global
Corporate
Services
Research
and
Consulting
ƒ
CBRE offers clients thought leadership,
leadership flawless execution and measurable results.
results
ƒ
Our values—Respect, Integrity, Service and Excellence—are the ballast that grounds and guides our efforts.
CBRE | Page 21
CBRE Chile
ƒ Brokerage: Complete commercial real estate brokerage services for tenants and
occupiers, in Offices, Industrial, Residential & Retail. In Offices, CBRE is the most
important local agent, with about 29% of market share.
• Durant
D
t 2010,
2010 CBRE’s
CBRE’ brokerage
b k
t
team
advised
d i d important
i
t t companies
i
f the
for
th
negotiation of leasing and sale transaction, totalizing US$69.9 million.
ƒ Investment Properties: Provides real estate investors with exceptional
performance globally. Dedicated investment management teams focused on a
specific geography and style of investing. We have been pioneers driving a new
t d in
trend
i local
l
l market,
k t which
hi h is
i the
th commercialization
i li ti off complete
l t developments
d
l
t to
t
major foreign investors.
ƒ Global Corporate Services: Customized, innovative workplace solutions in
multiple markets worldwide. CBRE has successfully relocated offices and
industrial amenities, g
generated savings
g over client expectations,
p
and –in g
generalprovided the needed solution, to corporate clients like OUTOKUMPU, IBM,
Bechtel, Legg Mason, Dell, Barrik Gold, Foster Wheeler, Johnson Diversey,
Rotter & Krauss, among others.
CBRE | Page 22
CBRE Chile
ƒ Property and Facility Management: The highest level of customer service and
value, enabling clients to focus on their core business. CBRE manages 2 million
square meters; in practice, this means approximately 70% of the country’s class
A office
ffi market.
k t
ƒ Project Management: Outsourcing strategies, program management services,
interior build-outs, moves/adds/changes, tenant improvements. In Chile, we have
best class strategic partners, which permit us to offer an impeccable service, with
accuracy,
accu
acy, e
efficiency
c e cy a
and
d eco
economies
o es in eac
each p
project.
oject
ƒ Asset Management: Transforms assets into opportunities through customized,
customized
value-added solutions that deliver measurable results. We manage a portfolio
over 100,000 sqf properties owned by private investors.
CBRE | Page 23
CBRE Chile
ƒ Consulting Services: Superior business performance for our clients by
maximizing value from their real estate assets and management practices. Step
by step, local investors turn slowly more opened to pay for an expert opinion
b f
before
th start
than
t t with
ith their
th i projects.
j t CBRE has
h started
t t d to
t be
b a main
i referent
f
t for
f
the marketplace.
ƒ Research: We provide commercial real estate forecasting; unrivaled, insightful
analysis and opinions about global and local market. We delivery 4 Offices and 2
Industrial
dust a MarketView
a et e Reports
epo ts by yea
year,, p
plus
us ot
other
e local
oca a
articles,
t c es, which
c a
are
e
exhibited on our website and local press media.
ƒ Valuation: Accurate, reliable and timely valuations are critical to the success of
every real estate transaction or financing. This area is focused to specialist
studios of huge properties, complex cases and large institutional portfolios. IFRS
Rule is being implemented to be on top of vanguard of service.
service
CBRE | Page 24
Magdalena
M
d l
140
40 Of.
Of 901
90
Las Condes, Santiago
T 562 562 2600
Miraflores
Mi
fl
383 Of.
Of 1501
Santiago
T 562 280 5400
www.cbre.cl
b
l
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los
Angeles, is the world’s largest commercial real estate services firm (in terms of 2010
revenue).
) The
Th Company
C
h
has
approximately
i
l 31,000
31 000 employees
l
(
(excluding
l di
affiliates),
ffili
) and
d
serves real estate owners, investors and occupiers through more than 300 offices (excluding
affiliates) worldwide. CBRE offers strategic advice and execution for property sales and
leasing; corporate services; property, facilities and project management; mortgage banking;
appraisal and valuation; development services; investment management; and research and
consulting. Please visit our Web site at www.cbre.com.
CBRE | Page 25