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Bogotá, Colombia
Market Summary
Industrial / Logistical Market
Mid-Year 2012
Economic Outlook
Colombia is maintaining the same macroeconomic policies that have
created economic growth throughout the past decade.
The
government of Juan Manuel Santos has focused on strengthening
commercial ties with major trading partners and making the country
safer for commercial and personal transport. This year has seen the
implementation of the US Free Trade Agreement as well as the
approval for permits of several new Free Trade Zones throughout the
country.
The IMF is forecasting annual GDP growth at 4.5% - down from the
5.5% rate seen in 2011, though still impressive considering the lagging
economies of many of Colombia’s major trading partners. Interest
rates are currently at 5.3%, and inflation is within the Central Bank’s
target rate at 3.4%. Foreign direct investment in January and February
of 2012 were up 25% over the same period in 2011 with the majority
coming in the mining, energy, agriculture, and infrastructure sectors.
All three major credit ratings agencies have rewarded Colombia’s
sound macroeconomic policies by upgrading their bond ratings to BBB.
The economic growth seen on a national level in Colombia has had a
direct effect on industrial and logistical properties in and around
Bogotá. Trade liberalization and an increasingly diversified domestic
economy have boosted production and therefore heightened demand
for manufacturing, warehousing, and transport services. This has
profoundly transformed the local economy into one of Latin America’s
premier industrial hubs.
The municipality of Bogotá has taken steps to disincentive industrial
activities in urban areas in an effort to redevelop them into residential
neighborhoods and push industrial activities into suburban corridors.
This is particularly noticeable in Puente Aranda, a centrally-located
sector occupied primarily by older factories and warehouses where
many new residential towers are being constructed. Suburban
municipalities, meanwhile, are offering competitive tax incentives to
lure new industrial tenants.
1. Bogotá Industrial Market Map
Several challenges remain, however. Unemployment has risen from
9% to 10.4% since November 2011, though this is still historically low
for Colombia. High dependency on oil exports makes Colombia
vulnerable to market shocks, while inadequate transportation
infrastructure poses a challenge to intercity transport.
Economic Data *
Population - Colombia (Millions)
Population - Bogotá (Millions)
Unemployment Rate (%)
2012 GDP Forecast (Billions of US$)
2012 GDP Growth Forecast (%)
GDP per capita (US$) – PPP
YoY Inflation (%)
Market Interest Rate (%)
Exchange Rate (COP per US$, 09/13/2012)
46
7.47
10.4
346
4.5
7,076
3.44
5.3
1,795
Source: Global Insight Country Intelligence (2012)
Bogotá’s industrial stock is divided into two main sectors: the urban
submarkets of Toberín, Puente Aranda, Corredor Sur, Engativá,
Montevideo, and Fontibón that contain primarily non-speculative
properties (factories and distribution centers), and the suburban
submarkets of Mosquera, Funza, and Cota (i.e. the western suburbs)
and Corredor Norte (i.e. the northern suburbs). The vast majority of
speculative properties (industrial/logistical parks and Free Trade
Zones) tend to be concentrated in the western suburbs. The primary
corridors for industrial production are Calle 13, Via Cota-Funza, and
Autopista Medellin due to their proximity to the El Dorado International
Airport and preferable access.
Jones Lang LaSalle – Pulse – Bogotá Industrial Market – Mid-Year 2012
2
2. Property Type and Stock by Submarket
4. Speculative Vacancy by Submarket
*Includes all urban Bogota except Engativá and Fontibon
Mosquera is the largest industrial submarket with over 1.8 million m² of
industrial floor area, almost 700,000 m² of which is speculative.
Fontibón, Puente Aranda, Cota, and Funza follow. Note that urban
submarkets such as Puente Aranda, Montevideo, Toberín, and
Corredor Sur are almost exclusively composed of stand-alone
warehouses and non-speculative space.
From this point onward, this report will focus exclusively on speculative
industrial properties which include Industrial/Logistical Parks (ILPs)
and Free Trade Zones (FTZs). These speculative properties are
further subdivided into Class A (well located, easy access,
international standards) and Class B (lower quality properties).
3. Historical Production of Speculative Stock
The vast majority of new industrial space is being financed by groups
who buy a large plot of land, design the plans, and sell off individual
lots. Those who purchase individual lots from developers or investors
then have the option to construct their own warehouse for their own
purposes or rent it out to a tenant. As a result of this model, structures
are usually only built when a tenant has been arranged. This “bit by
bit” approach is the most common model, as it limits the developer’s
investments and keeps vacancy rates low. Consequently, overall
vacancy rates are currently around 6.7%.
Vacancy is highest in Corredor Norte (19.3%) where there are a few
industrial spaces that have been built on speculation. Funza (11.2%)
and Mosquera (9.1%) are experiencing above-average vacancy due to
several recently built parks located within close proximity. Vacancy is
extremely low inside the city as there are fewer speculative properties
located there. This is especially the case in Engativá and Fontibón,
where warehouse space is generally not available very long due to
their prime location.
5. Production and Rents
*COP $1,795 = 1 USD (09/13/12)
As of Q2 2012, there are 98 total speculative parks (93 ILPs and 5
FTZs) in and around Bogotá that have companies operating within
them. 14 more will be finished in the next two years, delivering over
2.3 million m² of built space. 2013 will see the largest single year
increase in industrial stock; this can be attributed to several large-scale
projects that are expected to start operation by then –
industrial/logistical parks San Jorge and El Portal, and Free Trade
Zones Intexzona, Tocancipá, Zofrandina, and PLIC. By 2014,
speculative industrial stock is likely to double from 2009 levels.
Average rents for warehouse rentals are just over COP $15,000/ m²
/month for Class A and just over COP $13,000/ m² /month for Class B.
Rents stagnated in 2009-2010 when a glut of supply came online,
however they have been rising sharply since. We expect average
Jones Lang LaSalle – Pulse – Bogotá Industrial Market – Mid-Year 2012
3
rents to slow down again over the next 1-2 years as another glut of
Industrial Market Statistics
supply is expected. This should especially be the case in Mosquera,
(next 12
months)
Class A Warehouse for rent: (COP/ m² /mo)
13k – 22k

Class B Warehouse for rent: (COP/ m² /mo)
8k – 16k

FTZ Warehouse for rent: (COP/ m² /mo)
15k – 27k

Class A Warehouse for sale: (COP/ m²)
1,300k – 1,900k

Class B Warehouse for sale: (COP/ m²)
1,000k – 1,500k

FTZ Warehouse for sale: (COP/ m²)
1,400 – 2,200k

Non-FTZ lot for sale: (COP/ m²)
200k - 550k

FTZ lot for sale: (COP/ m²)
300k – 700k

3,400,000

6.7%

800,000

1st
very quickly, therefore putting downward pressure on rents.
6. Warehouse Rental Prices
*Includes all urban Bogota except Engativá and Fontibon
**COP $1,795 = 1 USD (09/13/12)
Stock (m² of floor area)
Companies can expect to pay between COP 15,000 – 27,000 /m²
/month for warehouse space inside an FTZ. Class A space outside an
FTZ will typically cost COP 13,000 – 22,000 /m² /month, and Class B
space outside an FTZ will be between COP 8,000 – 16,000 /m²
Trend
2012
Half
Funza, and Cota where a boom in production is unlikely to be filled
Vacancy Rate (%)
12-month Production Pipeline (m² of floor area)
**COP $1,795 = 1 USD (09/13/12)
/month. Warehouse rents are highest in Engativá and Fontibón due to
their location inside the city and close to El Dorado Airport. The
cheapest rents can be found in Corredor Norte.
8. Recent and Future Production by Submarket
*Includes all urban Bogota except Engativá and Fontibon
7. Lot Sale Prices
*There are no available lots in urban Bogota
**COP $1,795 = 1 USD (09/13/12)
Companies looking to purchase a lot should expect to pay between
COP 300,000 – 700,000 /m² inside FTZs and between COP 200,000 –
550,000 /m² outside FTZs. Prices will be much cheaper in Corredor
Norte due to the high availability of land and longer distance from
Bogotá. The growing attractiveness of the western suburbs should
keep prices rising moderately in those submarkets at least through the
next few years.
Future industrial production is concentrated almost exclusively in the
western suburbs (Mosquera, Funza, and Cota) and northern suburbs.
High urban land prices are pushing industrial activities out of the city,
though there are a few available lots in and around the Fontibón Free
Trade Zone. Mosquera will register the most impressive growth, with
almost 1 million m² of industrial floor space planned to be constructed
by the end of 2014. Corredor Norte will grow 5-fold in the next two
years as FTZ’s Tocancipá and Zofrandina are developed as well as a
handful of new ILPs.
Jones Lang LaSalle – Pulse – Bogotá Industrial Market – Mid-Year 2012
4
Typical Market Practices
Taxes
Standard Unit of Measurement
Unit of Measurement
Square Meters (m2)
Lease Contracts
Rent
Typical Lease Term
Frequency of Rent Payment
Quoted in COP /m² /month
3-5 years
Monthly
Deposit / Lease Guarantee
Case-by-case basis
Security of Tenure
Only for the duration of the tenancy.
No guarantee beyond the original lease
term
Statutory Right to Renew
No (unless an option to renew is agreed
at the outset and specified in the lease)
Basis of Rent Increases or Rent
Review
Case-by-case basis, usually between CPI
and CPI + 3
Frequency of Rent Increases or Rent
Review
Yearly
Transaction Fees
Agency Fees
2 month’s rent for a lease contract under
5 years.
Agency Fees
(payable by Landlord / Tenant)
Typically Landlord pays
Legal Fees
(payable by Landlord / Tenant)
Each part responsible for its own legal
costs
Incentives
Rent Free Period
1-3 months
The rent free period is not standardized in the local market, however typically occurs.
The length of this period is negotiated between the parties and is also a factor of how
much (if any) tenant improvement allowance is provided.
Service Charges, Repairs and Insurance
Service Charges/Managements Fees
Additional to the rental charge and
payable monthly in advance
Utilities (Sometimes separately
metered, sometimes paid as a
percentage of occupation)
Electricity, telephone, AC, etc. paid by
tenant according to consumption
Car Parking
Case-by-case basis
Internal (Tenant Space)
Tenant
Common Areas
(reception, lift, stairs, etc.)
Landlord (charged back via service
charge)
External / Structural
Landlord
Building Insurance
Both landlord and tenant
COPYRIGHT © JONES LANG LASALLE IP, INC. 2012. All rights reserved.
Local Property Taxes
Landlord, annually
VAT on Rent & Service Charge
(Payable by Tenant)
10%
Disposal of Leases
Sub-Letting & Assignment
Normally yes
approval)
Early Termination
Unless otherwise stipulated in the rental
contract, tenant is responsible for paying
the entirety of the contractual obligation
Tenant's Building Reinstatement
Responsibilities at Lease End
Original condition, allowing for normal
wear and tear.
(subject
to
landlord
Purchasing Properties
Foreign Ownership
No restrictions
Strata Title (Partial ownership of the
building)
Strata title ownership is typical
Security Deposit
Case-by-case
Agency Fees
3% paid by the Seller.
Legal Fees
Each part responsible for its own legal
costs
Other Transaction Costs
Typically paid by Buyer
Contact
Scott Figler
Consultant
Jones Lang LaSalle
+57 318-263-2740
[email protected]
Jean-Baptiste Wettling
Vice President
Jones Lang LaSalle
+57 317 657 0623
[email protected]
Zach Cheney
Director
Jones Lang LaSalle
[email protected]
Jones Lang LaSalle Colombia
www.joneslanglasalle.com/latinamerica