Americas Research
Economic Data Colombia
Bogota, Colombia
Office Report
Americas Research
Year-end 2010
Economic Outlook
On June 20, 2010, after two presidential terms of Álvaro Uribe, Juan
Manuel Santos was elected president in a run-off election. He won
69% of the vote (the highest number in the history of the Colombian
democracy). Santos inherited an economy that continues to improve
thanks to the appropriate policies.
GPD growth for 2010 is estimated at 4.5%. This increase was driven by
domestic demand, predominantly household consumption (mainly
durable goods). As for the economic sector, activities that contributed
most to GDP were manufacturing and mining (oil and coal mining).
Other contributors, on a lesser level, were Services and Trade.
With the inflation controlled (2.4%), and close to the lower band (target
bands fixed between 2% and 4%), inflation expectations remain low.
The relatively low inflation rate is explained in part by the interruption of
trade with Venezuela, which increased the domestic supply. On the
other hand, the appreciation of the peso (which impacts by reducing
the price of traded goods), and the existence of idle capacity, also
contributed to reduce inflationary pressures.
Regarding the external sector, according to data from July to August
2010, exports increased both in volume and value (36% and 16%
respectively), compared to the same period of previous year. Coffee,
coal, ferronickel and oil accounted for 66% of foreign sales in that
period. Among the main destinations are USA, China, Netherlands,
Canada and Dominican Republic.
In terms of total imports, between July and August, a 23% increase
was registered versus the same period of previous year. This increase
was primarily due to higher purchases of consumer goods (durables
and intermediate goods for industry).
Within this context, we can say that in 2010 the Colombian economy
returned to a growth path similar to its historical average, without
having committed the inflation target. For 2011 it is expected that the
economy will expand between 3.5% and 5.5%.
Country Population (‘000) 46,043
Bogotá Population (‘000) 7,467
Unemployment Rate (%) 11.8%
GDP (%) 4.5%
GDP (US$ Bn) 268.1
GDP per capita (US$) 9,092
Inflation per annum (%)
Exchange Rate (Pesos per USD)
2.4%
1,863
Latin Business Index 6th
Sources: Banco de la República; Departamento Administrativo Nacional de Estadística; IMF.
Market Summary
The economic recovery in Colombia that began in 2009 has continued
to impress in 2010. Most believe the stability brought by former
President Uribe will remain under the new president, strengthening
investor confidence and facilitating investment decisions. As a
consequence, office space absorption has been strong – especially for
top quality assets – and demand is expected to increase over the next
2 years.
The current stock of Class A & AB office product approximates
1,500,000 m² in 103 buildings. 85% of this stock is located in the CBD
and northern areas of the city, with the remainder found in El Salitre,
the city’s newest submarket, located along the main thoroughfare to
the international airport.
Class A vacancy in the CBD dropped significantly in the past few
months (from 10% to 5%) and limited product will enter the market in
the short-term. As a result, prices are increasing slightly and will
continue to do so as vacancy decreases. Class AB spaces – recent
smaller buildings with good corporate image but small floor plates and
lack of international standard equipments – constitute the main offer in
the CBD. Average rents for Class A product currently range between
US$30 – US$35 /m² /month and for Class AB product between US$24
– US$29 /m² /month.
The situation is slightly different in El Salitre, where most of the future
supply is being developed and/or planned. Due to its secondary
location and lack of consolidation, demand is lower and vacancy is
higher than in the CBD; prices are therefore expected to remain stable
or decrease slightly as new supply enters the market. Currently, rents
range between US$25 – 30 /m² /month.
 Pulse • Q4

Key Business Activities Latin America Office Clock

Major Business Sectors: Industrial (Coal Mining), Rio de Janeiro

Services, Agriculture (flowers,
coffee) Caracas
Peaking Falling
Major Real Estate Connecta, Tierra Firme, Ciudad Market Market Mexico City

Developments: Empresarial Salitre

Office Market Statistics São Paulo

Rising Bottoming
San Juan,
Market Market
Santo Domingo

Monterrey, San Jose, Panama City,

Trend Lima, Bogotá Buenos Aires
(next 12 Santiago
Q4 2010 2011(f) months)
Class A Rent (US$/m²/mo) 29-34 30-35 
Class AB Rent (US$/m²/mo) 25-30 24-29 

Total Occ. Costs Class A

32-39 33-40  HISTORICAL STOCK, NEW CONSTRUCTION & VACANCY
(US$/m²/mo) Class A and AB Buildings

Total Occ. Costs Class AB

28-35 27-34 
(US$/m²/mo)
US$/ m2/ month
Service Charges (US$/m²/mo) 3-5 3-5  2,000,000 8.50% 9.00%
8.00% 8.00%
Stock (000 m²) 1,482 1,580  1,800,000 8.00%
1,600,000 7.00%
Vacancy (‘000 m²) 126 126

Vacancy Rate
 1,400,000 6.00%
1,200,000
5.00%
Vacancy Rate (%) 8.5% 8%  1,000,000
4.00%
800,000
Future Supply 2011(f) 600,000 2.20%
1.50%
3.00%
400,000 0.80% 1.00% 2.00%
(‘000 m²) 100 200,000 1.00%
0 0.00%
Sources: JLL, Data as of Jan 2011 2005 2006 2007 2008 2009 2010 2011f

Stock New construction Vacancy A & AB

Bogota Map

HISTORICAL RENTAL RATE

Class A & AB Buildings

US$/m2/month
35

30

25

20

15

10

0
2004 2005 2006 2007 2008 2009 2010 2011f

Class AB Rent Class A Rent

 Pulse • Q4

Typical Leasing Practices

Standard Unit of Measurements Disposal of Leases

Unit of Measurements Square Meters Sub-Letting & Assignment Normally Yes (subject to landlord
approval)
Early Termination Unless otherwise stipulated in the
Rental Payments rental contract, tenant is responsible
Quoted in COP /m² /month for paying the entirety of the
Rents contractual obligation
Typical Lease Term 3-5 years Tenant's Building Reinstatement Original Condition, allowing for
Frequency of Rent Payable in Monthly Responsibilities at Lease End normal wear and tear
Advance
Rent Deposit Case-by-case, insurance policy
(expressed as x months rent) covering the contract is typical Lease Transaction Fees
Security of Tenure Only for the duration of the tenancy, Agency Fee Calculation 2 month’s rent
no guarantee beyond the original Agency Fee Landlord/Tenant
lease term (payable by Landlord/tenant)
Statutory Right to Renew No (unless an option to renew is Legal Fee Each part responsible for its legal
agreed at the outset and specified (payable by Landlord/tenant) costs
in the lease)
Basis of Rent Increases or Rent Case-by-case basis, CPI + 2
Review (Typically indexed as a percentage Service Charges, Operating Costs, Repairs and Insurance
of local CPI, but this can vary)
Service Charges/Managements Additionally to the rental charge and
Frequency of Rent Increases Yearly
fees payable monthly in advance
or Rent Review
Utilities (Sometimes separately Electricity, telephone, AC, etc. paid
metered, sometimes paid as a by tenant according to consumption
Incentives
percentage of occupation)
Rent Free Period (months) Case-by-case basis, 1-3 months Car Parking 1 space per 50m²
The rent free period is not standardized in the local market, however typically occurs. Tenant
Internal (Tenant Space)
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. Common Areas (reception, lifts, Landlord (Charged back via service
stairs, etc.) charge)
External / Structural Landlord
Taxation (Lease Contracts)
Building Insurance Landlord
Stamp Duty Called the Impuesto de timbre.
Currently 1/1000th of the total
contract value. Will diminish to 0% Purchasing Property
by 2010
Landlord Land Title Mainly Freehold
Building Insurance
Foreign Ownership No Restrictions
Local Property Taxes Landlord, annually
Strata Title (Partial ownership of Strata title ownership is quite
VAT / GST Payable on Rent & 10% the building) common
Service Charge Security Deposit Case-by-case basis
(Payable by Tenant) 2-month rent usually paid by seller
Agency Fees
Legal Fees The seller or arranged on case-by-
Easy of Doing Business (Ranked out of 32 Countries) case basis
*1=Easiest/32=Hardest Stamp Duty Called the Impuesto de Timbre.
Easy of Doing Business 3 Currently 1/1000 of the total contract
value. Will diminish to 0% by 2010.
Starting a Business 14 Paid by Seller.
Dealing with Construction Permits 9 Other Transaction Costs 1% transfer tax paid by Seller. Notary
Registering Property 6 Fee of 2.7% split between parties

Getting Credit 10
Protecting Investors 1
Paying Taxes 19
Trading Across Borders 17
Enforcing Contracts 25
Closing a Business 5
 Pulse • Q4

Glossary of Terms Contacts

Latin The Latin Business Index released by the Latin For further information on any prospective client requirements, please
Business Chronicle measures the macro economy, contact Elias Lindenberg.
Business
globalization and competitiveness, technology
Index 2009 For further information on research, please contact Manuel Gomez.
levels, and the corporate and political environments
of 19 Latin American countries. It is published
annually and utilizes data from the World Bank, Latin America Contacts
Transparency International, the United Nations and
the Heritage Foundation. Argentina Rodrigo Millan +54 11 4893 2600
Class A Represents the top range of open market rent that rodrigo.millan@am.jll.com
Rent Range could be expected for a top quality office unit in a
preferred location, as of the survey date (normally at
the end of each quarter period). The rent quoted Brazil Monica Lee +55 11 3043 6900
normally reflects prime units of over 200 m² of monica.lee@am.jll.com
rentable floor space, which excludes rents that
represent a premium paid for a small quantity of
space. The Class A Rent Range reflects an Chile Marcelo Carrere +56 2 3740070
occupational lease that is standard for the local marcelo.carrere@am.jll.com
market. It is a face rent that does not reflect the
financial impact of tenant incentives and excludes
service charges and local taxes. It excludes any Colombia Jean Baptiste +57 1 475 8657
unrepresentative deals. Wettling jean.wettling@am.jll.com
Class AB Represents the range of open market rent that
Rent Range could be expected for a medium-to-high quality
office unit in a good location as of the survey date Mexico Hector Klerian +52 55 5202 7190
(normally at the end of each quarter period). The hector.klerian@am.jll.com
rent quoted normally reflects prime units of over 200
m² of rentable floor space, which excludes rents that
represent a premium paid for a small quantity of Northern Cone Zach Cheney +54 11 4893 2600
space. The Class AB Rent Range reflects an zach.cheney@am.jll.com
occupational lease that is standard for the local
market. It is a face rent that does not reflect the
financial impact of tenant incentives and excludes Corporate Elias Lindenberg +56 2 374 0070
service charges and local taxes. It excludes any Solutions elias.lindenberg@am.jll.com
unrepresentative deals.
Vacancy The Vacancy rate represents an approximate
amount of immediately vacant office floor space in Regional Manuel Gomez +54 11 4893 2600
Rate
all completed buildings within a market as of the Research manuel.gomez@am.jll.com
survey date (normally at the end of each quarter
period), expressed as a percentage of the total
Northern Cone: Colombia, Costa Rica, Dominican Republic, Panama,
stock.
Puerto Rico, Venezuela, Central America and the Caribbean.
Stock The Stock is an approximate number of total quality
spaces in a given market suitable for large multi-
national tenants. Depending on the market, its Southern Cone: Argentina, Chile and Peru.
specific characteristics and dynamics, properties of
differing quality may or may not be included in the
Stock.

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