São Paulo Office Skyline
July 2014
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Office Market Overview - Global
Prime Offices – City Rental Clock
The Jones Lang LaSalle Property Clocks SM
Based on rents for Grade A space in CBD or equivalent. US positions relate to the overall market
1Q2013
Amsterdam, Sao Paulo
Stockholm
Berlin
Moscow
San Francisco
Houston
Toronto
Mexico City
Frankfurt
Dallas, London
Paris
Beijing
Milan
Rental Value
growth slowing
Rental Values
falling
Rental Value
growth
accelerating
Rental Values
bottoming out
Boston
Hong
Kong
Sydney
Mumbai
New York, Johannesburg,
Istanbul, Tokyo
Los Angeles, Dubai
Washington DC
Rome
Chicago, Madrid
Seoul
Brussels, Singapore, Shanghai
1Q2014
Mexico City
Moscow
Shanghai
Johannesburg
London
New York, Stockholm
Tokyo
Rental Value
growth slowing
Rental Values
falling
Rental Value
growth
accelerating
Rental Values
bottoming out
Supply Pipeline Major Markets 2014-2015
Americas
EMEA
Asia Pacific
% change
-10
-5
0
5
10
Sao Paulo
Shanghai
Mexico City
Mumbai
Dubai
Moscow
Tokyo
Beijing
Hong Kong
London
Singapore
San Francisco
Paris
Boston
Seoul
Sydney
Frankfurt
Stockholm
Toronto
Brussels
Washington DC
New York
Madrid
Los Angeles
Chicago
2015
Completions as % of existing stock
0
15
Source: JLL, April 2014. Based on rents for Grade A space in CBD or equivalent. In local currency.
2014
5
10
15
20
Sao Paulo
Rental Values
+ 10-20%
Capital Values
Singapore
Tokyo, New York*
San Francisco, Madrid
Dubai, London*, New York*
San Francisco, Hong Kong, Tokyo
Dubai, London*, Boston, Chicago
Los Angeles, Frankfurt
Seoul, Singapore
+ 0-5%
Frankfurt, Paris*, Boston, Chicago
Los Angeles, Toronto, Washington DC
Mexico City, Beijing, Seoul, Mumbai
Shanghai, Stockholm
Brussels, Madrid
Paris*, Shanghai, Mumbai
Washington DC, Toronto
Mexico City, Beijing, Hong Kong
Sydney, Stockholm, Brussels
- 0-5%
Moscow , Sydney
Moscow
Sao Paulo
Sao Paulo
+ 5-10%
- 5-10%
25
30
Source: JLL, April 2014. Covers all office sub-markets in each city. Tokyo – CBD - 5 kus.
Prime Offices - Projected Changes in Values, 2014
Boston
Los Angeles, Istanbul
Mumbai
Milan
Singapore
Chicago, Dubai
Washington DC
Seoul
Brussels, Paris, Madrid
Beijing, Hong Kong, Sydney
Americas EMEA Asia Pacific
Singapore
Dubai
London
San Francisco
Los Angeles
New York
Tokyo
Toronto
Shanghai
Mexico City
Chicago
Frankfurt
Boston
Stockholm
Hong Kong
Mumbai
Washington DC
Madrid
Brussels
Seoul
Sydney
Paris
Beijing
Moscow
Sao Paulo
-15
Amsterdam
Toronto
Berlin, Frankfurt
Houston
San Francisco
Dallas
Prime Offices - Rental Change, Q12013-Q12014
*New York – Midtown, London – West End, Paris - CBD. Nominal rates in local currency.
Source: JLL, April 2014
Latin-America
Production Pipeline
Production Pipeline
vs. Current
Stock (m2)
vs. Current
Stock
Average Asking
Rents,
EY 2013
Average
Rents (USd/m2/mo)
Mexico City
Caracas
São Paulo
Rio de Janeiro
Santiago
São Paulo
Rio de Janeiro
Bogotá
Bogotá
Montevideo
Buenos Aires
Lima
Caracas
Buenos Aires
Lima
Santiago
Monterrey
Mexico City
San José
Cali
Panama City
Medellín
San Juan
Guadalajara
Medellín
Panama City
Quito
Barranqulila
Montevideo
Monterrey
Guayaquil
Guadalajara
Mexico City
Medellín
Cali
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
Rentable Area (Millions of m2)
Vacancy,
Vacancy Rates, EY
2013Q2 2013
Panama City
37,3%
São Paulo
Monterrey
São
Paulo
Guayaquil
Quito
Cali
6,5%
Caracas
5,2%
Barranquilla
Buenos Aires
4,9%
Guadalajara
Barranquilla
4,8%
Guayaquil
Bogotá
3,0%
Montevideo
Lima
2,8%
Cali
Bogotá
San Jose
Buenos Aires
Panama City
Lima
Rental Growth
Slowing
Rents
Falling
Rio de Janeiro
Monterrey
Guadalajara
Net Absorption
10%
15%
20%
25%
Office Vacancy Rate, Class A and AB
30%
35%
40%
Sao Paulo
Rental Growth
Accelerating
Rents
Bottoming Out
Medellin
Production
San Juan
2,2%
5%
Caracas, Santiago
Mexico City
Monterrey
4,3%
0%
Latin-America 2Q2014
Medellín
6,1%
Medellín
Santiago
$70,00
Mexico City
6,8%
Caracas
$60,00
Average Asking Rents (USD/m2/month)
Y-o-Y Production
vs. Net Absorption, Q2 2012
- Q2 2013 (m2), Y-o-Y
Production vs. Net Absorption
Guadalajara
Santiago
$50,00
Buenos Aires
7,4%
Quito
$40,00
Bogotá
11,0%
Montevideo
$30,00
San José
11,5%
Mexico City
$20,00
Lima
14,6%
San José
$10,00
Rio de Janeiro
15,8%
Rio de Janeiro
$-
Panama City
16,5%
Quito
Average Rent
Class AB
Santiago
17,5%
San Juan
Bogotá
Rio de
Janeiro
São Paulo
18,4%
Caracas
Average Rent
Class A
Guayaquil
-
Barranquilla
Lima
San José
Barranquilla
San José
Guayaquil
Quito
Production: Q1 2014 - Q4 2015
Cali
Panama
City
Guadalajara
San Juan
Current Stock: End-Year 2013
San Juan
Monterrey
San Juan
Montevideo
-
50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 450.000
Rentable Area (m2)
Santo Domingo
Buenos
Aires
Montevideo
São Paulo
Classes AA&A stock evolution
Million 6,0
sq.m.
Net absorption and vacancy evolution
´000 sq.m
500
30%
5,0
400
25%
300
20%
200
15%
1,0
100
10%
0,0
0
4,0
3,0
2,0
1996
1997
1998
1999
2000
2001
2002
NEW STOCK
-100
Vacancy Rate (%)
46,1% 46,7%
R$/sq.m.
23,9%
20,9%
17,0%
18,9%
16,6%
2005
2006
NET ABSORPTION
2007
2008
2009
2010
2011
2012
2013
2014
5%
VACANCY RATE
0%
Class AA&A asking rents
High-end stock
(AA & A):
28% of total
inventory
2Q 2014
Vacancy Rate
(AA &A):
20.5%
R$ 95.1
20,1%
13,8% 13,9%
13,5% 12,7% 13,0%
12,5%
2004
13.0
million sqm
São Paulo
average asking rent
(AA & A):
27,6%
22,5%
2003
Total inventory
approximately:
Average asking rent
YoY
variation
8,7% 8,7%
7,2% 7,2%
4,3% 3,6%
0,0% 0,0%
-16.0%
Source: Jones Lang LaSalle reserach - Brazil, July 2014
São Paulo Demographics
Population
2014
11.8 million
inhabitants
Population
density
7,500
inhab/km²
Sources: SEADE / IBGE / PMSP
Average
income
R$3,500
per household
R$ 443 billion GDP
5 million formal jobs positions
65% is from services sector
São Paulo
Faria Lima AA & A
buildings
in skyline!
Faria Lima
73%
Vacant floor
Pre-leased
Future available /
under construction
98%
Class AA
Class A
Occupied floor
Retail
Parking, other unusable space
31%
40
35
30
25
20
15
10
5
1
T
Building
Faria Lima 4440
F.L. 4300 Corporate
Praça Faria Lima
Ed. Vera Cruz II
Miss Silvia
The One
International Plaza
Address
Av. Brg. Faria Lima, 4440
Av. Brg. Faria Lima, 4300
Av. Brg. Faria Lima , 4415
Av. Brig. Faria Lima
Av. Brg. Faria Lima
R. Min. J. Cardoso, 454
Av. Pres. J. Kubitschek, 1309
2011
2013
2014
2014
2016
2012
2003
Total Area
20,083 sqm
16,895 sqm
16,946 sqm
20,000 sqm
15,578 sqm
11,505 sqm
16,295 sqm
Floor Area (min)
1,046 sqm
687 sqm
400 sqm
1,800 sqm
977 sqm
1,063 sqm
1,207 sqm
Floor Area (max)
1,882 sqm
1,306 sqm
1,146 sqm
1,800 sqm
977 sqm
1,482 sqm
1,207 sqm
Available Area
1,046 sqm
3,932 sqm
8,924 sqm
20,000 sqm
15,578 sqm
3,334 sqm
0.00 sqm
Availability Rate
5%
23%
43%
100%
100%
29%
0%
Pre-leased Area
0.00 sqm
11,213 sqm
6,876 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
Built/ Renovated
Million 6,0
sq.m.
5,0
4,0
3,0
2,0
1,0
0,0
São Paulo - Classes AA&A stock evolution
Faria Lima
high-end
stock:
547,900
sq.m.
Last 12
months
production:
40,800
sq.m.
New Stock
forecast
2014-2015:
35,500
sq.m.
São Paulo
Occupied floor
Vacant floor
Pre-leased
Future available /
under construction
Faria Lima
Retail
Parking, other unusable space
40
35
30
25
20
15
10
5
1
T
UUUUU
Building
International Plaza II
JK 1455
Maria Cecília Lara Campos
Pedro Mariz
Birmann 32
Birmann 29
Air Atílio Innocenti
Address
Av. Pres. J. Kubitschek, 1327
Av. Pres. J. Kubitschek, 1455
Av. Pres. J. Kubitschek, 1400
Av. Brig. Faria Lima, 3900
Av. Brig. Faria Lima, 3732
Av. Brig. Faria Lima, 3729
Rua Atílio Innocenti
2010
2008
2003
2003
2017
1999
2015
Built/ Renovated
Total Area
16,169 sqm
22,376 sqm
12,565 sqm
18,472 sqm
16,000 sqm
19,051 sqm
15,300 sqm
Floor Area (min)
626 sqm
1,865 sqm
1,006 sqm
1,078 sqm
~ 2,000 sqm
1,313 sqm
750 sqm
Floor Area (max)
759 sqm
1,865 sqm
1,006 sqm
1,305 sqm
~ 2,000 sqm
1,313 sqm
750 sqm
Available Area
0.00 sqm
5,595 sqm
503 sqm
2,610 sqm
16,000 sqm
1,313 sqm
15,300 sqm
Availability Rate
0%
25%
4%
14%
100%
7%
100%
Pre-leased Area
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
00.00 sqm
São Paulo - Vacancy Rate (%)
46,1% 46,7%
27,6%
22,5%
Last 12 months net
absorption 48,400 sq.m.
13.4% of
stock is available
23,9%
20,9%
17,0%
18,9%
16,6%
13,5%
12,5%
20,1%
13,8% 13,9%
12,7% 13,0%
8,7% 8,7%
7,2% 7,2%
4,3% 3,6%
0,0% 0,0%
Faria Lima
AA buildings
vacancy rate
Faria Lima
A buildings
vacancy rate:
18.9%
10.4%
Faria Lima
vacancy rate
YoY variation
-248 bps
Faria Lima
region
vacancy
16.6%
São Paulo
Occupied floor
Vacant floor
Pre-leased
Future available /
under construction
Faria Lima
Retail
Parking, other unusable space
40
35
30
25
Torre
A
20
Torre
C
Torre
B
15
10
5
1
T
Building
Faria Lima Square
New Century
Infinity Tower
Faria Lima 3500
Pátio Victor Malzoni
Faria Lima Financial Center
Address
Av. Brig. Faria Lima, 3600
R. Leopoldo C. M. Jr., 758
R. Leopoldo C. M. Jr, 678
Av. Brig. Faria Lima, 3500
Av. Brig. Faria Lima, 3439
Av. Brig. Faria Lima, 3400
2006
2002
2012
2014
2012
2012
2012
2003
Total Area
17,972 sqm
16,228 sqm
34,894 sqm
24,000 sqm
25,045 sqm
14,832 sqm
35,280 sqm
26,489 sqm
Floor Area (min)
1,645 sqm
919 sqm
1,814 sqm
4,000 sqm
994 sqm
1,434 sqm
1,480 sqm
1,282 sqm
Floor Area (max)
1,679 sqm
1,000 sqm
2,018 sqm
5,000 sqm
1,881 sqm
1,710 sqm
2,417 sqm
2,219 sqm
Available Area
3,324 sqm
0.00 sqm
0.00 sqm
0.00 sqm
25,045 sqm
0.00 sqm
0.00 sqm
0.00 sqm
Availability Rate
18%
0%
0%
0%
100%
0%
0%
0%
Pre-leased Area
0.00 sqm
1,378 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
0.00 sqm
Built/ Renovated
R$/sq.m.
São Paulo - Class AA&A asking rents
Class AA asking
rent R$ 147
Class A asking
rent R$ 123
Asking rent average
decreased 3.5% QoQ
Asking rent average
decreased 15.2%
AA&A
Faria Lima
asking rent
R$138
São Paulo
Occupied floor
Vacant floor
Pre-leased
Faria Lima
Future available /
under construction
Retail
Parking, other unusable space
40
35
30
25
20
15
10
5
1
T
Building
Spazio Faria Lima
Icon Faria Lima
Seculum
Seculum II
HSBC Tower
Cidade Jardim
Address
R. Iguatemi, 151
Av. Brig. Faria Lima, 3311
Av. Brig. Faria Lima, 3160
Av. Brig. Faria Lima
Av. Brig. Faria Lima, 3064
Av. Cidade Jardim, 803
2010
2007
2004
2018
1994
2013
Built/ Renovated
Total Area
17,500 sqm
10,147 sqm
10,705 sqm
11,050 sqm
19,048 sqm
14,937 sqm
Floor Area (min)
700 sqm
608 sqm
825 sqm
850 sqm
1,348 sqm
1,395 sqm
Floor Area (max)
700 sqm
895 sqm
825 sqm
850 sqm
1,348 sqm
1,504 sqm
Available Area
350 sqm
0.00 sqm
825 sqm
11,050 sqm
0.00 sqm
9,776 sqm
Availability Rate
2%
0%
8%
100%
0%
65%
Pre-leased Area
0.00 sqm
895 sqm
0.00 sqm
0.00 sqm
4,044 sqm
0.00 sqm
Milhões
Million 1,2
sq.m.
1,0
0,8
0,6
São Paulo - New Stock Forecast
Faria Lima new stock to be delivered between
2014 and 2015 represents 6,5% of current stock.
0,4
0,2
0,0
All of the 35,500 sqm are Class AA buildings
About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4 billion, JLL has more than 200 corporate offices and operates in 75
countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment
Management, has $48.0 billion of real estate assets under management. JLL is the brand name of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
About JLL Brazil
JLL brought its extensive international experience to Brazil in 1996, making it one of the first professional building management companies in the market. It currently has a professional staff of around 550 working out of offices in São Paulo, Rio de Janeiro and Curitiba. They serve Brazilian and multinational clients under contract in all national territory. For further information, visit www.jll.com.br.
Client Solutions:
São Paulo
José Victor Cardim
+55 11 3043 7183
[email protected]
Marcelo Sasaki
+55 11 3043-6897
[email protected]
Roberto Patino
+55 11 3043-7140
[email protected]
São Paulo
Rio de Janeiro
Global Clients:
Office Division:
Transactions:
Paulo Casoni
+55 11 3043 6935 / 21 2277 2701
[email protected]
Monica Lee
+55 11 3043-6947
[email protected]
Julia Botelho
Office Division Leader
André Rosa
Managing Director
Market Intelligence:
Alessandra Osiro
Operations Director
Ricardo Hirata
Head of Research
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