Latam Logistic Properties – Industrial Market Study Colombia, Peru

Need

The client needed to understand and keep track of the dynamics of the logistics market for decision making purposes and to present findings to investors, lenders, and tenants alike.

Approach

Develop a market study completing the following steps:

Definition of the project timeline and milestones to deliver the results to the client in the most efficient way.

Analysis of information to identify key market trends and their impact on the subject for the client´s internal decision-making process.

Selection of information sources and data collection methodology.

Competitive market information (Property specific).

• Inventory, vacancy and absorption.
• Actual rents ($/M2, $/M3).
• Investment metrics (Cap rates).

Productivity analysis of the subject based on the following:

• Physical characteristics of the subject and competitive set.
• Property type and competitive advantages.
• Strengths and weaknesses.
• Opportunities and threats in the market.

Key trends and indicators in the market to determine.

• Most likely rents and absorption time.
• Construction timeline.

Outcome

According to the client the information was useful in the following ways:

Management decisions:

Timing – projected absorption helped support decision to build speculative space.

Lease negotiations:

LLP projects have superior logistics capacity and locations than competitors (Price per M3 helped highlight superior storage capacity).

Physical characteristics analysis highlighted the superior quality of the client’s projects, and justified higher rents.

Investor transparency:

Investors received a higher level of transparency and understanding of the projects. This made easier the promotion process of the project to this public.