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Colliers International | Global Occupier Guide

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Bogotá

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Financial Data Currency

Yes

Transfer Taxes

Office Occupier Market Condition

1,1,1

Occupier Market Conditions – How conducive is the regulatory environment to starting and operating a business. Source: Colliers

Labor Cost – Wages for skilled office workers. Source: City Globe and Colliers

Tenant Favorable – Assessment of the real estate market condition for office space. Source: Colliers

Quadrant Legend: Blue = Favorable Medium Blue = Neutral Red = Less Favorable

Typical Loss Factor

10%

From rentable to useable square meters

Loss Factor Notes:

It depends on each buildings, it can be lower with Class A+ Buldings

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Rent-Free Period

The Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-6mo.

Typical number of rent-free months.

Rent-Free Period Notes:

Landlords usually grant between 1 to 6 months of free rent. During this period, the tenant will have to pay utilities and CAM expenses.

Lease Provisions

Lease Term

3yrs.-7yrs.

Typical lease term in years.

Lease Term Notes:

Average lease term is 5 years

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Market rent is only the base rent. CAM expenses ($3-$4) and utilities are paid directly by the tenant to the building administration. VAT for the base rent is 19%. Insurance are for the tenants' operation and assets, not the property and if there is any, is paid by Landlord.



Figures: varies considerably depending on the type of building and consumption of utilities.

Lease Fundamentals: The following apply to both office and industrial leases.

Lease Execution Requirements:

Requirements Notes:

In Colombia, some landlords require an insurance policy that guarantees the payment of rent and utilities during the lease term

Negotiated Subletting/Assignment

Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Usually require the landlords' previous approval

Statutory Subletting/Assignment

This IS a statutory right.
Landlord Consent: The Landlord's consent is still required.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Blend & Extend Notes:

Can be proposed to the landlord on a case-by-case basis

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

The ability to terminate early is always negotiated and included in the lease. The terms must be agreed upon with the landlord on a case-by-case basis. However, the law states the tenant will have to pay the remaining rent until the initial lease term is fulfilled.



Typical cost: negotiated with the landlord

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Typically, landlords will request the space to be restored to its original condition - negotiated on a case-by-case basis

Workplace

Regional Office Space

75sm-129sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

Regional HQ Office Space

90sm-110sm

Typical Square Meters per employee (includes office square footage for employees and contractors).

Workplace Notes:

In most Latin America countries, there's not much difference in sq ft for regional or headquarter offices.

Desk Sharing

Desk-sharing is a common practice in the market.

Desk Sharing Notes:

During the last few years, it is becoming a trend to use collaborative and flexible spaces.

Industrial Occupier Market Condition

1,1,1

Occupier Market Conditions – How conducive is the regulatory environment to starting and operating a business. Source: Colliers

Labor Cost – Wages for manuafacturing and warehouse/distribution office workers. Source: City Globe and Colliers

Tenant Favorable – Assessment of the real estate market condition for industrial space. Source: Colliers

Quadrant Legend: Blue = Favorable Medium Blue = Neutral Red = Less Favorable

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Rent-Free Period

The Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-3mo.

Typical number of rent-free months.

Rent-Free Notes:

This is becoming more common in industrial transactions.

Lease Provisions

Lease Term

3yrs.-10yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Market rent is only the base rent. CAM expenses and utilities are paid directly by the tenant. The low and high figure varies consideriably depending on the type of industrial complex and consumption of utilities. The lowest CAM per SM per month is COP$ 1.000. The highest CAM per SM per month is COP$ 1.500

Lease Fundamentals: The following apply to both office and industrial leases.

Lease Execution Requirements:

Requirements Notes:

In Colombia, some landlords require an insurance policy that guarantees the payment of rent and utilities during the lease term

Negotiated Subletting/Assignment

Typically, the tenant's right to sublease or assign the space is negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Usually require the landlords' previous approval

Statutory Subletting/Assignment

This IS a statutory right.
Landlord Consent: The Landlord's consent is still required.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Blend & Extend Notes:

Can be proposed to the landlord on a case-by-case basis

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It is NOT typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

The ability to terminate early is always negotiated and included in the lease. The terms must be agreed upon with the landlord on a case-by-case basis. However, the law states the tenant will have to pay the remaining rent until the initial lease term is fulfilled.



Typical cost: negotiated with the landlord

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Typically, landlords will request the space to be restored to its original condition - negotiated on a case-by-case basis

Project Management

Section 1. Fit Cost Data

Value-Added Opportunities:

Alliances with national and international suppliers.















Have special discounts for Colliers managed projects mostly from carpets and furniture global brands.















Parallel work between the brokerage and project phases, to get costs and time reductions.















Knowledge of market practice.















EHS Manuals Compliance with local and international EHS policies.

Total Fit-Out Cost

$1000/sm-$/sm

Class A Office

$700/sm-$959/sm

Class B Office

$700/sm-$900/sm

Flex Office / Warehouse

Total Fit-Out Cost Notes:

The fit-out cost refers to the total cost of design, construction, and installation for a space. It includes categories such as materials, labor, furniture, fixtures, equipment, finishes and other related costs. The specific factors influencing the total fit-out cost can vary widely depending on the project scope, location, size of the space, quality of materials, and complexity of design.

Furniture Cost

$210/sm-$260/sm

Class A Office

$130/sm-$200/sm

Class B Office

$130/sm-$180/sm

Flex Office / Warehouse

Furniture Cost Notes:

These costs are included in the Total Fit-Out costs.

Low Voltage Cabling Cost

$95/sm-$110/sm

Class A Office

$90/sm-$100/sm

Class B Office

$90/sm-$100/sm

Flex Office / Warehouse

Low Voltage Cabling Cost Notes:

These costs are included in the Total Fit-Out costs.

Construction to Move-in Cycle Time

16wks-20wks

Class A Office

12wks-16wks

Class B Office

12wks-16wks

Flex Office / Warehouse

Cycle Cost Notes:

In Colombia you do not need any government approvals for interior fit-out projects.

Project Management Base Fee

4.5 - 6.5%

Base fee [%] for the fitout of above office of 1000 m2.

Section 2. Scope of Work Description

Phase 1: Services Before and During the Transaction

Review the LOI and work letter portion of the Lease to ensure that the clients interests are protected during the build-out of the project.
Typically included in "Project Management" scope of work.
Advise Colliers broker and client on project issues and their resolution as they occur.
Typically included in "Project Management" scope of work.
Participate in building tours, if requested, to evaluate building systems and other cost-related observations and prepare a building due diligence report
Not typically included at all, but available for an additional fee.
Develop high-level project estimate and timeline based on test fit and Client standards
Typically included in "Project Management" scope of work.
Schedule and chair Schematic Drawings and Design Development Drawings review meetings/conference calls
Typically included in "Project Management" scope of work.
Define workplace strategy for client, research what kind of location, office / work environment accelerates business
Not typically included at all, but available for an additional fee.
Define program of requirements for location, building and interior characteristics
Typically included in "Project Management" scope of work.
Engage with the Client Facilities Management (FM) Operations team to ensure alignment with Client standards
Typically included in "Project Management" scope of work.
Test fits for different building options
Not typically included at all, but available for an additional fee.
Negotiation of technical agreements in the lease contract + hand over inspection and agreement
Typically included in "Project Management" scope of work.
Perform Test-fit
Not typically included at all, but available for an additional fee.
Phase 1 Notes:
Reviewing the LOI and advising Colliers brokers and clients on project issues are on a case by case and not always possible depending on synergies with TM teams.

A PM is usually available during a building tour, but evaluations/DD/surveys may be charged separately.

We do provide high-level cost/time parameters based on our team's experience. Further analysis such as feasibility studies (test-fits, detailed cost estimates, project dedicated timelines, etc.) are charged separately.

Phase 2: Service Before and During the Design Process

Develop preliminary project budget and schedule.
Typically included in "Project Management" scope of work.
Develop the RFP for selection of a space planner/architect and any other consultants identified and required
Typically included in "Project Management" scope of work.
Analyze, compare and evaluate responses to the RFP.
Typically included in "Project Management" scope of work.
Orchestrate the space planner/architect interview process.
Typically included in "Project Management" scope of work.
Negotiate, on behalf of the client, professional services agreements with the space planner/architect and other consultants.
Typically included in "Project Management" scope of work.
Review architect’s final Program of Requirements.
Typically included in "Project Management" scope of work.
Monitor the design team’s schedule of deadlines and deliverables. Coordinate meetings with the design team and the client. Manage the design process on behalf of the client.
Typically included in "Project Management" scope of work.
Review and recommend payment of the invoices for services. Submit invoices for payment to landlord or client and prepare monthly reports of project costs versus project budget.
Typically included in "Project Management" scope of work.
Negotiate all client-vendor contractors (IT, AV, Security/Access Control, Signage, High Density Filing) on behalf of client.
Typically included in "Project Management" scope of work.
Coordinate with either Architect or General Contractor in permitting process
Typically included in "Project Management" scope of work.
Schedule and chair weekly design review meetings/conference calls
Typically included in "Project Management" scope of work.
Other Value-Add Services: Test fits (including Look & Feel) - Cost Estimates - Schedule/timing/phasing scenarios - Floor plan, core and circulation efficiency ratios(GIA vs NIA) (NOA vs NIA) - Technical due diligence/Assessments - We may pack everything into a Feasibility Study or proposed them separately depending on the situation.
Not typically included at all, but available for an additional fee.
Define interior guidelines for architect based on workplace strategy
Not typically included at all, but available for an additional fee.
Control workplace strategy and functionality and during design process
Not typically included at all, but available for an additional fee.
Architectural design
Not typically included at all, but available for an additional fee.
Phase 2 Notes:
Depending on project complexity and overall project timing additional fees may be requested (to be assessed on a project-by-project basis).

Analyzing, comparing and evaluating responses to the RFP included for GC's & Furniture RFPs.

For A/E RFPs, depending on project complexity and overall project timing, additional fees may be requested (to be assessed on a project-by-project basis). Trips excluded.

Fees are based on the involvement of A/E team, General Contractor and not separate bids/purchases, with a flexibility on Carpet and furniture.

We shall also recommend if and expeditor is to be involved (at client cost and no Colliers liability).

Architectural design depends on project size and location.

Phase 3: Services Before Construction

Liaise with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Prequalify a list of general contractors to be interviewed (consult lease to confirm any Landlord required GCs).
Typically included in "Project Management" scope of work.
Develop the RFP, including Landlord and/or Lease required documents, for selection of a general contractor.
Typically included in "Project Management" scope of work.
Analyze, level, and evaluate the responses to RFP.
Typically included in "Project Management" scope of work.
Orchestrate general contractor interview process and prepare evaluation scorecard.
Typically included in "Project Management" scope of work.
Review all proposed subcontractors and monitor the general contractor’s subcontractor bid process to ensure integrity of the process and quality of the workmanship.
Not typically included at all, but available for an additional fee.
Monitor the general contractor’s schedule of deadlines and deliverables. Coordinate meetings between the design team, general contractor, client and appropriate vendors.
Typically included in "Project Management" scope of work.
Negotiate, on client's behalf, the General Contractor agreement for Client approval
Typically included in "Project Management" scope of work.
Schedule and coordinate Architect's 90% Construction Drawings review
Typically included in "Project Management" scope of work.
Develop Project Cost Summary + Invoice Tracker and update weekly
Typically included in "Project Management" scope of work.
Phase 3 Notes:
Schedule and coordinate Architect's 90% Construction Drawings review when applicable.

Phase 4: Services During Construction

Coordinate with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Conduct weekly construction meetings to assess progress, quality and conformance with the Contract Documents and distribute minutes of meetings.
Typically included in "Project Management" scope of work.
Monitor the general contractor’s schedule.
Typically included in "Project Management" scope of work.
Monitor the construction budget.
Typically included in "Project Management" scope of work.
Review, and recommend for payment, the contractor’s Applications for Payment.
Typically included in "Project Management" scope of work.
Monitor all project documentation.
Typically included in "Project Management" scope of work.
Act at all times as client’s liaison to vendors contracted directly by Client (IT, AV, Security/Access Control, Signage).
Typically included in "Project Management" scope of work.
Not typically included at all, but available for an additional fee.
Oversee the punch list process to ensure acceptable completion of all items.
Typically included in "Project Management" scope of work.
Close out all consultant, contractor and vendor contracts.
Typically included in "Project Management" scope of work.
Submit General Contractor, vendor, and consultant invoices to Landlord for reimbursement per the Lease Workletter
Not typically included at all, but available for an additional fee.
Review and recommend for payment all General Contractor, vendor, and consultant invoices; submit to Client for approval
Typically included in "Project Management" scope of work.
Deliver close-out documents, as specified in the Lease, to Client
Typically included in "Project Management" scope of work.
Coordinate value/engineering process, if required.
Typically included in "Project Management" scope of work.
Provide as-built drawings and O&M Manuals to Client FM Operations team
Typically included in "Project Management" scope of work.
Monitor one year guarantee period and final hand over
Not typically included at all, but available for an additional fee.
Phase 4 Notes:
When acting as client's liaison to vendors, additional fees may be required depending on the amount of vendors/subcontractors involved. We typically include, A/E, GC, Carpet & Furniture.

Submitting GC, vendor and consultant invoices are not typical in LATAM markets and does not necessarily imply extra fees. TBD on a case-by-case basis.

Additional Services: Services During Relocation

Develop RFP for moving companies, evaluate responses and recommend selection of moving company or identify, interview and review proposal for services from relocation consultants.
Not typically included at all, but available for an additional fee.
Represent Client in development of move strategy.
Not typically included at all, but available for an additional fee.
Monitor development of move activity checklist.
Not typically included at all, but available for an additional fee.
Represent client on site during move process.
Not typically included at all, but available for an additional fee.

Additional Services: Project Management Services Related to Furniture/Workstation Procurement

Conduct bid process for all furniture (workstations, case goods, seating, filing) purchases specified by the architect and/or client.
Typically included in "Project Management" scope of work.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Typically included in "Project Management" scope of work.
Not typically included at all, but available for an additional fee.
Evaluate bids and negotiate purchase order with manufacturer(s).
Typically included in "Project Management" scope of work.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Not typically included at all, but available for an additional fee.
Change management before, during and after moving to the new work environment
Not typically included at all, but available for an additional fee.
Measuring/monitoring (KPI's) how the way of working and building accelerates business and goals of the client
Not typically included at all, but available for an additional fee.

Operating Environment Rankings reported on a scale of 1 (least favorable) to 10 (most favorable).

Human Capital

5, 5 5/10

Labor Force Growth
Labor force growth rate (past 5 years)

7, 3 7/10

Wage Inflation
Rise in wages (past 5 years, local currency)

2, 8 2/10

Millennials
Proportion of population in the age 20-39 cohort


5, 5 5/10

High School Education Equivalent
Proportion of population attaining this level

3, 7 3/10

University Education Equivalent
Proportion of population attaining this level

4, 6 4/10

Overall Education
Composite average of High School & University


5, 5 5/10

Human Capital Composite

Business Climate

4, 6 4/10

Innovation
Presence of innovative factors in economy

6, 4 6/10

Economic Risk
Resilience of economy to unexpected events

7, 3 7/10

Business Environment
Friendliness of business environment


6, 4 6/10

Business Climate Composite

Operating Environment Composite

6, 4 6/10

Combined average score of Human Capital and Business Climate factors

This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s).

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