Lisbon Offices Market
2nd Quarter 2007
Take-up rises to 65,896 m2
Western Corridor, New Offices Zone and Parque das Nações were the best performing zones in the quarter
Lisbon Offices Market – 2nd Quarter 2007 – Portugal
Economy
According to information from INE (National Statistical Institute), there may have been a slowing of economic activity in Portugal during the second quarter. However, this did not have a negative effect on the economic climate, which showed an improvement on the first quarter.
The indications of growth in the labour market are moderately positive, based on employers’ expectations up to June and information on the quarter from Short Term Indicators and Job Centres.
The Portuguese economy grew faster in the 1st quarter with a
year-on-year increase in GDP of 2.1%, according to estimates published by INE.
Inflation as measured by the Consumer Prices Index (CPI), increased during the 2nd quarter, reversing the trend of the
previous three quarters.
Offices Market in
Europe
The 2nd quarter of 2007 saw a rise in prime rents in the leading
European capitals, prompted by the combination of strong demand and a limited supply of office space.
The European Office Rental Index increased overall by around 4.6% during the quarter. This was the largest increase since the final quarter of 2000 and was prompted by strong growth in the major European markets.
Prime rents in the 24 European cities that make up the index are now 11% higher compared with rents in the same period a year ago.
The strong growth in the labour market in Europe has driven demand for office space. In the 1st half of 2007, we saw take-up
of 6.7 million m2, an increase of 9% compared with the 1st half
of 2006.
Average vacancy rates in Europe are around 7.7%. The cities that have seen the largest falls are Lisbon (-170 bp), Stockholm (-160 bp), Edinburgh (100 bp) and Oslo (-100bp).
Prime Rents – European Cities Index (€/ m2/ year)
2nd Quarter 2007
Source: JLL European Research
European Office Property Clock – 2nd Quarter 2007
Source: JLL European Research
330 372 306 246 300 264 255 646 264 456 420 264 301 578 246 1039 1759 420 240 456 560 1111 348 539 825 240 430 443 626 246 324 AmesterdãoAtenas BarcelonaBerlim Bruxelas Budapeste CopenhagaDublim Dusseldorf EdimburgoFrankfurt Hamburgo Helsínquia Kiev Lisboa Londres City Londres West End LuxemburgoLion MadridMilão MoscovoMunique Oslo Paris Praga Roma Estocolmo São PeterburgoViena Varsóvia
M
Offices Market in
Lisbon
Take-up:The modest but steady recovery of company finances
allied to the recovery in investment levels during the past 12 months has had a very positive effect on take-up levels in the Lisbon offices market. Compared with the take-up during the same period in 2006, there has been an increase in area transacted of the order of 22,919 m2 (+ 34.5%).
Nearly half the area occupied during the 2nd quarter is in used
offices as opposed to new offices, which have proved to be less attractive.
The highlight of the quarter was 3 leasing operations totalling 31,641 m2 (48% of the total take-up): total occupation of the Mar Mediterranean building by the Sonaecom, total occupation of the Edifício Caribean at Parque das Nações by Novabase, and the occupation of 14,861 m2 of Torres de Lisboa by Petrogal.
Vacancy rate:The declining trend in the vacancy rate continued, a situation that is especially true in the Prime CBD Zone (Zone 1) where we are starting to see a shortage of products to meet demand.
To illustrate this situation, the Prime CBD Zone has a future supply of 5,241 m2 which is already pre-let to Barclays Bank, with the result that there is no supply available for the market.
The zones that have shown the largest falls in the vacancy rate were the Prime CBD Zone, the New Offices Zone and the Parque
das Nações zone. The leasing operations mentioned above contributed significantly to this situation.
Occupation: The preference of companies in Lisbon continues to
be focused on recently built and well equipped buildings offering efficient and flexible use of space.
In 2007, companies will continue to opt for spaces that enable them to respond to new market demands, and open space properties will certainly be the most attractive product.
Future supply: Although future supply will be scarce in some office
zones in Lisbon, the market as a whole is going through an attractive expansion phase. Future supply is estimated at 81,162 m2 in 2007 and 111,000 m2 in 2008.
Based on forecast GDP growth in Portugal for the next 2-3 years, we can forecast take-up of the order of 160,000 – 170,000 m2 /year, corresponding to a take-up 70% higher than supply.
During the 2nd quarter, we saw 4 new buildings come on to the
market: Parque das Nações Zone (Edifício Mar Mediterrâneo), Zone 7 (EUA Business Center), the Western Corridor (Alfraparque Edifício C) and the Central Business District (Edifício Republica), totalling 25,140 m2.
With the 2nd quarter now over, we can claim that the first half of 2007 has shown a remarkable level of dynamism. During the first half of the year, we have seen a level of take-up of the order of 109,734 m2, equivalent to 28% of the available stock.
The vacancy rate fell from 11.4% in the final quarter of 2006 to 9.32% in this quarter.
On the supply side, 45,701 m2 of new space was completed in the first half of 2007.
The current stock of offices in Lisbon totals 4,144,063 m2.
Market Summary Table
COPYRIGHT © JONES LANG LASALLE IP, INC. 2007. 3
Zones Stock m2 supply (m2) Available Total Take–Up (m2) Vacancy Rate
Zone1 570,505 52,588 3,428 9.22% Zone 2 1.035,009 80,399 5,348 7.77% Zone 3 405,704 30,834 19,887 7.60% Zone 4 444,664 27,580 1,640 6.20% Zone 5 218,805 35,764 19,216 16.35% Zone 6 810,611 143,635 13,289 17.72% Zone 7 658,765 15,350 3,088 - Total 4,144,063 386,150 65,896 9.32%
Three Most Active Business Sectors
Business Sector % share in the total Volume of deals % Share in the total number of deals Other services 41,7% 43,9% TMT´s & Utilities 31,3% 12% Pharmaceuticals 7,2% 6,6%
The 10 largest transactions – 2nd Quarter 2007
Analysis of rents
No. of transactions per rent interval
< 14€/m2 49 14€ - 16€/m2 10 16€ - 18€/m2 6 18€ - 20€/m2 4 >20€/m2 10
Company (Tenant) Sector Leased Space (m2) Location
Petrogal Other services 14.861 Torres de Lisboa Sonaecom TMT´s & Utilities 10.040 Mar Mediterrâneo Novabase TMT´s & Utilities 6.740 Ed. Caribean Malo Clinics Pharmaceuticals 2.336 Green Park Compal Consumer Products 2.100 Arquiparque I Desejo sem Limites Other services 1.500 Palácio Condes do Restelo
NAER Business Services 1.357
Palácio Sotto Mayor Prosegur Activa Other Services 1.151 Espaço Berna Johnson Controls Consumer Produtcs 1.100 Tetrapark Portugal Telecom TMT´s & Utilities 1.065 Av. Almirante Reis, 65
Average Rents
Zones New Used
Zone 1 - 17.75 € Zone 2 - 13.40 € Zone 3 - 16.12 € Zone 4 - 11.20 € Zone 5 15.80 € - Zone 6 12.23 € 11.38 € Zone 7 - 10.57 € Source: LPI / JLL
The 3 best performing buildings – 2nd Quarter 2007
Zone Building Leased Space (m2) Number of deals
Zone 3 Torres de Lisboa 15,095 2
Zone 5 Edifício Mar Mediterrâneo 10.040 1 Zone 5 Edifício Caribean 6,740 1
Market Summary
Zones Average rent Prime rent
Zone 1 17.98 € 20.00 € Zone 2 14.78 € 19.00 € Zone 3 16.12 € 18.50€ Zone 4 9.35 € 11.00 € Zone 5 15.80 € 18.00 € Zone 6 11.80 € 13,50 € Source: LPI / JLL
The 3 Major Office Developments Office Parque Expo
Area – 65,000 m2
Project located in zone 5, Parque das Nações. Negotiations are currently in hand with the Justice Ministry for the entire complex.
Torres Colombo
Area – 24,000 m2 (each tower)
One of the main Office developments promoted in Lisbon. To be developed over the Colombo Shopping Centre, each tower will have 24,000 m2, offering open-space areas with 2,000 m2 per floor. It provides an excellent opportunity for the big companies to consolidate their offices in one building.
European Maritime Agency Building (EMSA)
Area – 15,000 m2
Located in Ribeira das Naus, Cais do Sodré, the building will house the headquarters of the European Maritime Safety Agency, currently installed in Parque das Nações.
Trend in prime rents by zone
Zones Year 2006 1st Q. 2007 2nd Q. 2007 Zone 1 18.50 € 20.00 € 20.00 € Zone 2 18.50 € 18.00 € 19.00 € Zone 3 18.00 € 17.00 € 18.50 € Zone 4 10.50 € 11.00 € 11.00 € Zone 5 19.00 € 17.00 € 18.00 € Zone 6 13.60 € 13.50 € 13.50 €
Map of Zones – Lisbon Offices Market
Prime CBD (Zone 1): Av. Liberdade as far as Saldanha; Praça do Saldanha; Rotunda do Marquês Pombal; Rua Castilho; Barata Salgueiro; Rosa Araújo; Mouzinho da Silveira; Duque de Palmela; Rua Braamcamp; Alexandre Herculano (from Av. Liberdade to Rato, excluding the part to the right of Av. Liberdade); Rua Rodrigo da Fonseca; Av.Joaquim António de Aguiar (as far as Rodrigo da Fonseca); Perpendicular roads between Rua Rodrigo da Fonseca and Rua Castilho; Rua Camilo Castelo Branco (as far as Duque de Loulé); Rua do Salitre (from Av. Liberdade to Rodrigo da Fonseca, corresponding to Rua do Salitre, number 119).
CBD (Zone 2): North: Rotunda de Entrecampos; East: Av. Roma/Manuel da Maia (exclusive) to Rovisco Pais; South: Saldanha (excluded) plus perpendicular road to right of Av. Fontes Pereira de Melo as far as Av. Duque de Loulé; West: Praça de Espanha (excluded) to Av. António Augusto de Aguiar; Amoreiras Zone (included in Zone 2); South: from the junction of Av. Joaquim António Aguiar/ Rua Rodrigo Fonseca; North: to Rua Joshua Benoliel; as far as Av. Marquês da Fronteira; To Rato via Rua ilipe
Nery and Artilharia Um. F
New Offices Zone (Zone 3): North: 2ª circular; South: Entrecampos to Av. Berna (exclusive); West: Eixo Norte-Sul/Av. José Malhoa; East: Av. Roma/Av. Brasil/ Campo Grande; including Praça de Espanha, Av. Dos Combatentes, Av. José Malhoa, Av. Columbano Bordalo Pinheiro, Sete Rios/Laranjeiras.
Secondary Zone (Zone 4): South: River Tagus between Santa Apolónia and Alcântara, including all the Baixa as far as Restauradores and Lapa/Infante Santo; North: Praça do Areeiro; West: Almirante Reis and adjacent blocks as far as Estefânia (boundary with Zone 2); East: Almirante Reis and adjacent blocks as far as Afonso Costa/Rotunda das Olaias.
Parque das Nações (Zone 5): Parque das Nações
Western Corridor (Zone 6): Outside Lisbon boundary, Western Corridor as far as Porto Salvo; excluding Sintra municipality; including Carnaxide, Alfragide and perimeter of the Amadora area.
Zone 7: Other Zones.
Contacts
Ann Charnock
Head of Office Agency & Corporate Solutions Jones Lang LaSalle Lisboa
Tel. +351 21 358 32 22 [email protected]
Alexandra Gomes Research
Jones Lang LaSalle Lisboa
+351 21 358 32 22
COPYRIGHT © JONES LANG LASALLE IP, INC. 2007. This publication is the sole property of Jones Lang LaSalle, and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle.The Information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them.Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
