LATAM FIT-OUT COST GUIDE - cbre.us/media/files/2017/project management/2016... · FIT-OUT COST...

LATAMFIT-OUT COST GUIDEOccupier Projects2016 / 17 Edition

1FIT-OUT COST GUIDE

FOREWORD

SERGIO PANEROSenior Managing DirectorProject Management Latin America

Our global clients are increasingly looking to Latin America for growth, and more specifically building or expanding offices in the region. As the premier providers of Project Management Service, CBRE is uniquely qualified to support our clients to make the best decisions for their projects in each market of the region.

How much will my new office cost? As part of their planning, our clients need to know comparable costs and metrics for their projects. This CBRE Cost Guide for Corporate Interiors was created a year ago to answer this key question and we are delighted to present the updated edition.

Along with other leaders in the industry (our FUSION partners) CBRE has produced a typical design for 1,100 square meter fit-out suitable for Latin America markets. Using our local Project Management teams and other CBRE professionals in each market, we have gathered project cost information for identical spaces in each country. While not all projects have the same characteristics, this guide delivers an accurate cost metric for Low, Medium and High Standard specifications, allowing our clients to make “an apples to apples comparison”.

It is my pleasure to present our LatAm Fit-Out Cost Guide 2016-2017 which covers 10 countries in the Region, produced by CBRE’s Project Management local teams.

CBRE Mexico City office

This year we increased the coverage of the region by adding 4 more countries to the guide.

CBRE Latin America team is proud to make this tool available for our clients. We will periodically update this publication to keep our clients abreast of changing market conditions. As always, we appreciate the critical input you may have in making this tool more valuable.

2 3FIT-OUT COST GUIDE FIT-OUT COST GUIDE

The Project specifications have been priced by our local Project Management teams across the region and are categorized broadly into three standards named: low, medium and high. These specifications as well as their associated budget, can be further refined for greater accuracy as the project brief evolves.

This categorization has allowed us to gather a range of benchmarking information that can be applied depending on the level of investment an organization requires.

We have issued the design and specifications to our offices throughout LATAM to capture local knowledge and market information which includes:

• Fit-out cost (professional fees, construction and Furniture Fittings & Equipment)• An indication of Project delivery time• Expected inflation over the next 12 months• Local Taxes

INTRODUCTIONCONTENTS

1FOREWORD

36

44

REGIONAL ANALYSIS

CONTACTS

4-5LAYOUT

20COMPARATIVE FIT OUT COST BY COUNTRY

30COST BENCHMARKING TABLE

6LOW SPECIFICATION

31COST BREAKDOWN

10MEDIUM SPECIFICATION

33READY RECKONER / COST DATA TABLE

3INTRODUCTION

14HIGH SPECIFICATION

43PROJECT MANAGEMENT LOCATIONS

4BENCHMARK ASSUMPTIONS

CAROLINA FOLEYOperations DirectorProject Management Latin America


BENCHMARK ASSUMPTIONSTo homologate criteria in the different markets within the region, and considering construction implications the following general assumptions emerged:

• The building is located in the central business district

• Premises are in good condition and have all necessary infrastructure (suitable baseline requirements of HVAC and power supply, etc)

• Design is generic, local regulations, specific space planning and cultural differences both country and industry related, have not been considered

• This guide does not consider shape variations of the building which may impact fit factors

• FF&E is new, no reuse considered

• Ordinary timetable for construction works has been contemplated

• If the scope of your requirements varies significantly from the design information included in this report, please do not hesitate to contact the Project Management team locally

Traditional general arrangement

Area Table

Traditional

Space designation

Area net (sq m)

Work settings

Open plan office space 275 104

Private offices 105 9

Client meeting rooms 90

Employee meeting rooms 64 14

Reception 63 2

Cafeteria 92 26

Collaboration 104 34

Support space 35

Circulation space 272

Total 1,100 189

LAYOUTThis guide includes general arrangements of a traditional office floor plan of 1,100 sq m (11,840.30 sq ft) usable area. This layout is compatible with three specifications levels of low, medium and high as outlined in the following pages.


LOW SPECIFICATIONLOW SPECIFICATION GUIDE

LOBBY/RECEPTION

- National stone floors at lobby, reception area and client facing corridor

- Feature wood wall cladding to accent walls in the reception/lobby area

- Wall covering on public facing corridors

- Custom reception desk using wood and glass finishes

- Integrated lighting throughout public areas

CLIENT AREAS

- Laminated glazing fronts on aluminum frames with full height veneer doors

- Acoustical paneling with fully integrated AV presentation equipment

- High end broadloom carpet, fabric shades and window black outs

- Dimmable lighting controls for integrated lighting

- Drywall ceilings with acoustical tile inserts

OPEN AREAS

- Multi-switching lighting controls throughout open areas

- Carpet tiles to the floor and standard ceiling grid with high acoustical rating tiles

- Interior offices with standard aluminum glazing system and painted wood doors

- Drywall ceilings at interior corridors, with recessed lighting and linear diffusers

- Custom millwork at cafeteria with plastic laminate surface countertops and tile backsplash

Reception

Meeting Room

Open Plan O�ce

Co�ee point / Informal Meeting

Collaborative Working


MEDIUM SPECIFICATIONMEDIUM SPECIFICATION GUIDE

Reception

Meeting Room

Open Plan O�ce



LOBBY/RECEPTION

- National stone floors at lobby, reception area and client facing corridor

- Feature wood wall cladding to accent walls in the reception/lobby area

- Wall covering on public facing corridors

- Custom reception desk using wood and glass finishes

- Integrated lighting throughout public areas

CLIENT AREAS

- Laminated glazing fronts on aluminum frames with full height veneer doors

- Acoustical paneling with fully integrated AV presentation equipment

- High end broadloom carpet, fabric shades and window black outs

- Dimmable lighting controls for integrated lighting

- Drywall ceilings with acoustical tile inserts

OPEN AREAS

- Multi-switching lighting controls throughout open areas

- Carpet tiles to the floor and standard ceiling grid with high acoustical rating tiles

- Interior offices with narrow line aluminum glazing system and framed glass doors


- Custom millwork at cafeteria with solid surface countertops and tile backsplash


HIGH SPECIFICATIONHIGH SPECIFICATION GUIDE

Reception

Meeting Room

Open Plan O�ce



LOBBY/RECEPTION

- Imported stone floors at lobby, reception area and client facing corridor

- Feature stone wall cladding to accent walls to reception

- Custom acoustic or featured paneling to public facing corridor

- Custom reception desk using stone, metal and wood finishes with integrated lighting

- Specialized integrated lighting throughout public areas

CLIENT AREAS

- Double glazed meeting room fronts with full height veneer doors

- Custom acoustical paneling with fully integrated state of the art AV presentation equipment

- Built in serving and storage credenzas to all client facing meeting rooms

- Wool broadloom carpet, full height fabric shades and window black outs

- Scene setting lighting controls with an integration to the AV systems

OPEN AREAS

- Dimmable lighting throughout open areas

- High end carpet tiles to the floor and narrow line suspended ceiling grid with high acoustical rating tiles

- Interior offices with narrow line aluminum glazing systems and full hignt glass doors


- Custom millwork at cafeteria with quartz countertops and glass tile backsplash


COMPARATIVE FIT OUT COST BY COUNTRY

ARGENTINA

*IT Equipment, LEED consultant and LEED certification are not considered in the costs.

** Recommended time frame based on the Standard 1,100 Sqm Layout of this guide.

Buenos Aires & Cordoba

FEATURES LOW MEDIUM HIGH

USD PER SQM USD PER SQM USD PER SQM

SOFT COST 190-300 300-400 >400

HARD COST 460-900 900-1,300 >1,300

FURNITURE 150-250 250-350 >350

TOTAL FIT OUT COST

800-1,450 1,450-2,000 >2,000

RECOMMENDED DESIGN CONSTRUCTION TOTAL TIME

TIME FRAME 12 WEEKS 16 WEEKS 28 WEEKS

BRAZIL



Sâo Paulo, Rio de Janeiro, Curitiba & Belo Horizonte





SOFT COST 110-200 200-350 >350

HARD COST 440-800 800-1,250 >1,250

FURNITURE 250-400 400-650 >650

TOTAL FIT OUT COST

800-1,400 1,400-2,250 >2,250


CHILESantiago

* IT Equipment, LEED consultant and LEED certification are not considered in the costs.




SOFT COST 220-260 260-320 >320

HARD COST 480-690 690-1,030 >1,030

FURNITURE 150-250 250-350 >350

TOTAL FIT OUT COST

850-1,200 1,200-1,700 >1,700



COLOMBIABogota & Medellin





SOFT COST 110-180 180-250 >250

HARD COST 340-620 620-950 >950

FURNITURE 150-250 250-350 >350

TOTAL FIT OUT COST

600-1,050 1,050-1,550 >1,550




COSTA RICA





SOFT COST 130-180 180-260 >260

HARD COST 670-770 770-940 >940

FURNITURE 150-200 200-300 >300

TOTAL FIT OUT COST

950-1,150 1,150-1,500 >1,500



San Jose

ECUADOR





SOFT COST 190-250 250-350 >350

HARD COST 660-950 950-1,250 >1,250

FURNITURE 360-480 480-720 >720

TOTAL FIT OUT COST

1,210-1680 1,680-2,320 >2,320



Quito


GUATEMALA





SOFT COST 100-160 160-240 >240

HARD COST 450-640 640-960 >960

FURNITURE 240-350 350-550 >550

TOTAL FIT OUT COST

790-1,150 1,150-1,750 >1,750



Guatemala

MEXICOMexico City, Guadalajara, Monterrey & Queretaro





SOFT COST 130-150 150-180 >180

HARD COST 530-650 650-790 >790

FURNITURE 180-220 220-270 >270

TOTAL FIT OUT COST

840-1,020 1,020-1,240 >1,240




PANAMA





SOFT COST 250-300 300-350 >350

HARD COST 800-1,000 1,000-1,250 >1,250

FURNITURE 300-400 400-500 >500

TOTAL FIT OUT COST

1,350-1,700 1,700-2,100 >2,100



Panama

PERULima





SOFT COST 160-190 190-200 >200

HARD COST 540-710 710-900 >900

FURNITURE 200-350 350-500 >500

TOTAL FIT OUT COST

900-1,250 1,250-1,600 >1,600





COST BENCHMARKING TABLE

COUNTRY CITY LOW MEDIUM HIGH RECOMMENDED

USD PER SQM USD PER SQM USD PER SQM TIME FRAME

ARGENTINA BUENOS AIRES 800-1,450 1,450-2,000 >2,000 28 Weeks

BRAZIL SAO PAULO 800-1,400 1,400-2,250 >2,250 20 Weeks

CHILE SANTIAGO 850-1,200 1,200-1,700 >1,700 28 Weeks

COLOMBIA BOGOTA 600-1,050 1,050-1,550 >1,550 20 Weeks

COSTA RICA SAN JOSE 950-1,150 1,150-1,500 >1,500 18 Weeks

ECUADOR QUITO 1,210-1,680 1,680-2,320 >2,320 28 Weeks

GUATEMALA GUATEMALA 790-1,150 1,150-1,750 >1,750 20 Weeks

MEXICO MEXICO CITY 840-1,020 1,020-1,240 >1,240 28 Weeks

PANAMA PANAMA 1,350-1,700 1,700-2,100 >2,100 28 Weeks

PERU LIMA 900-1,250 1,250-1,600 >1,600 20 Weeks

• For accuracy purposes: the figures in the cost data are generated from actual project financial closeout data.

• These figures reflect actual market conditions and may be adopted as a point of reference for future projects, considering inflation, local conditions and specific project

requirements.

• All prices have been developed to depict total project capital cost.

COST BREAKDOWNCapital Costs or CAPEX is classified into 3 major categories namely, Soft Cost (A&E, GC, PM Fees), Hard Cost and Furniture. Depending on the local market, these categories vary differently. However, the graphs below provide a better understanding on how the costs are spent percentually in each location.

SOFT COST

SOFT COST

HARD COST

HARD COST

FURNITURE

FURNITURE

ARGENTINA COSTA RICA

MEXICO PANAMA PERU

BRAZIL

ECUADOR

CHILE COLOMBIA

GUATEMALA

22% 20% 20% 23% 20% 20% 18% 17% 16% 16% 17% 17%14%

15% 15% 15% 13% 14% 14% 15% 14% 14% 18% 17% 17% 16% 14% 13%

15% 16%

60% 63% 65% 57% 59% 61% 58% 60% 61% 69% 64% 63%56%

56% 55% 54% 56% 55% 55% 63% 65% 64% 59% 59% 60% 58% 56% 56%

56% 55%

18% 17% 15% 20% 21% 19% 24% 23% 23% 15% 19% 20%30%

29% 30% 31% 31% 31% 31% 22% 21% 22% 23% 24% 23% 26% 30% 31%

29% 29%



The pricing schedule for each of the layouts in the low, medium and high specifications have been completed using our LATAM cost database and these have been verified with local project managers.

COUNTRY LOW MEDIUM HIGH DESIGN CONSTRUCTION INFLATION

USD PER SQM USD PER SQM USD PER SQM DELIVERY TIME DELIVERY TIME

ARGENTINA 650-1,200 1,200-1,700 +1700 10-12 Weeks 14-16 Weeks 28%-37%

BRASIL 550-1,000 1,000-1,600 +1600 6-8 Weeks 10-12 Weeks 8-9%

CHILE 700-950 950-1,350 +1,350 10-12 Weeks 14-16 Weeks 3-4%

COLOMBIA 450-800 800-1,200 +1,200 4-6 Weeks 12-14 Weeks 6-7%

COSTA RICA 800-950 950-1,200 +1,200 4-6 Weeks 10-12 Weeks 4-6%

ECUADOR 850-1,200 1,200-1,600 +1,600 10-12 Weeks 14-16 Weeks 2-3%

GUATEMALA 550-800 800-1,200 +1,200 4-6 Weeks 12-14 Weeks 3-4%

MEXICO 660-800 800-970 + 970 10-12 Weeks 12-16 Weeks 3-4%

PANAMA 1,050-1,300 1,300-1,600 +1,600 7-8 Weeks 18-20 Weeks 3-5%

PERU 700-900 900-1,100 +1,100 6-8 Weeks 10-12 Weeks 2-4%

READY RECKONER / COST DATA TABLE

DESIGN, PM FEES AND CONSTRUCTION


COUNTRY LOW SPECIFICATION MEDIUM SPECIFICATION HIGH SPECIFICATION DELIVERY TIME

USD PER SQM USD PER SQM USD PER SQM FURNITURE

ARGENTINA 150-250 250-300 +300 16-17 WEEKS

BRASIL 250-400 400-650 +650 6-12 WEEKS

CHILE 150-250 250-350 +350 12-16 WEEKS

COLOMBIA 150-250 250-350 +350 6-10 WEEKS

COSTA RICA 150-200 200-300 +300 10-12 WEEKS

ECUADOR 360-480 480-720 +720 12-16 WEEKS

GUATEMALA 240-350 350-550 +550 10-12 WEEKS

MEXICO 180-220 220-270 +270 8-14 WEEKS

PANAMA 300-400 400-500 +500 8-12 WEEKS

PERU 200-350 350-500 +500 7-14 WEEKS

FURNITURE

COUNTRY TAX ONCONSTRUCTION

TAX ONFURNITURE

USD PER SQM USD PER SQM

ARGENTINA 21 % 26 %

BRASIL 16-20 % 16-20 %

CHILE 19 % 19 %

COLOMBIA2 16 % 16 %

COSTA RICA1 13 % 13 %

ECUADOR 14 % 14 %

GUATEMALA 12 % 12 %

MEXICO 16 % 16 %

PANAMA 7 % 7 %

PERU 18 % 18 % * Delivery times are imported furniture from USANote 1 Costa Rica: If the location of the project is in a Free Zone there is no TaxesNote 2 Colombia: 1% for Construction Fees 16% for Profesional Services

TAXES



REGIONAL ANALYSIS

ARGENTINA BRAZILCOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:

• Rent Quoted: Rent is quoted on a NN basis per square meter per month in U.S.Dollars (USD). LEASE is always in dollars, tenant can pay in pesos per exchange rate at day of invoice. In Argentina. I.V.A. is 21% of the rent.

• Rent Payable: The tenant pays rent monthly in advance in ARG (argentine pesos). If the lease is quoted in USD, tenant have to pay in ARG at the exchange rate at the time of payment. The tenant pays VAT is refundable as long as the invoice issuing party is not a "monotributista" for this reason, clients usually budget their construction projects at Net and not Gross

• Grace Period: Up to two months’ grace period for fit-out is commo for shell space in a lease of 3 years term and one month for second generation spaces

• Rent Escalation: Rent adjusts annually agreed among both parties in the contract.

• The entire fit out-is paid by the tenant.• Tenant Work: The tenant is usually responsible for fit-out, including

suspended ceilings and ceiling lighting for first generation, but can be found included in the contract also. The landlord normally allows the tenant to select the contractor. Every buildings has its own construction code for tenant improvements.

• Tenants insure their premises separately.• The tenant pays for telephone and electricity.• Electrical Power: In office buildings, electricity is generally delivered

to floors at 220 volts. 380 volts is also common in office buildings, and is starting to being delivered in brand-new buildings.

PROJECT POINTS FOR ATTENTION:• Long Lead Time items must be ordered early in design process as we

recommend at least 4-6 months contingency for delivery.• Importation schedules are often difficult to control and predict.• Non argentine architects or MEP consultants are not familiar with

permiting, design codes, metric system, etc. • Argentine A&E firms in general are not capable of concentrating all

MEP disciplines. Thus design integration is strongly reccomended.

PROJECT DELIVERY:

• New buildings can be delivered as both Core & Shell, or Warm Shell conditions.

• Fitting out investment commonly is full tenant’s responsibility.• Both Building Administration and City hall departments are to

approve/permit drawings prior to on site works commencement. Building construction codes need to be checked prior to lease contract execution.

• The proposed layout would be subject to permits from both City Hall (Law #11.228 ) and Fire Marshall (Decree #56819). Refurbishment works must not start before 30 days or permit request.

• LEED CS certified buildings are increasingly taking over São Paulo. Attention to its restrictions is important to tenants.

• Brazil’s tax environment is not VAT. It is an old fashioned model that retains taxes on every transaction level resulting in a cascade of taxes in cases of subcontracts of any kind.

• Sao Paulo and Rio de Janeiro often are mature for design-build delivery, always under a project management scheme for client´s benefit and control. Design - bid - build model is available in all states.

• Most of the international FF&E players are present in country, mostlythru distribution occasionally thru local manufacturing or O&M.

PROJECT POINTS FOR ATTENTION:• Long lead items are often UPS, Generator, transformers, buzways,

imported FF&E, imported goods, air conditioners.• Importation schedules are often difficult to control and predict.• Non brazilian architects or MEP consultants are not familiar with

permiting, design codes, metric system, etc. • Brazil A&E firms in general are not capable of concentrating all MEP

disciplines. Thus design integration is strongly reccomended.

CHILECOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Basis of measurement Valuation method: Areas and dimensions are

measured in square meters. Accommodation is valued adopting an overall rate per square meter and it is common practice to measure the net leasable area.

• Rent payment: Rent is quoted in Unidad de Fomento (UF), per square meter, an inflation indexed currency that is adjusted on a daily basis depending on the previous month’s inflation value. Rent is actually payable in Chilean Pesos, monthly in advance. Additional charges, such as taxes and the upkeep of common areas, are quoted separately.

• Rent escalation / Rent review: Rent escalation is not common as the UF is an artificial currency, the value of which changes on a daily basis to reflect inflation. When leases are renewed, the rent is reviewed to reflect the current market.

• Security Deposits and Guarantees: Top multinational tenants typically deposit one month’s rent. Smaller companies may deposit two months’ rent. Security deposits are lower than in many other countries, because landlords do not generally do fit-outs or provide other large incentives.

• Utilities: The term “service charges” is used for electricity, water and cleaning inside the tenant’s premises that the tenant pays separately and directly to each provider. The tenant pays the electric and water companies directly, based on a meter reading.

• Property taxes and other costs: lords will pay real estate taxes and property insurance. Annual property tax is 1.2% of the state appraisal value of the property. In some but not all cases, the tenant will pay VAT (sales tax) at 19% on its rental liability.

• Agents’ fees: Commission will typically amount to 4% plus VAT of the disposal value of a freehold interest, or 4% of the total rental liability of a leasehold interest. Often, the parties will assume an equal share of this liability.

• Incentives: A rent-free period is negotiable but is likely to be from 3 to 6 months.

• Lease length and terms: Typical lease length is between 3-5 years is common. While new leases will not be granted by law, it is common

for the parties to renew a lease and revise terms as dictated by the market. Some tenants will take renewal options at the start of their lease term.

• Tenant Improvements: Landlord Work:• The landlord usually delivers an empty shell and sometimes may

contribute with some improvements, such as suspended ceilings with basic ceiling lighting, basic restrooms, and basic carpeting rights.

• Tenant Work: The tenant usually performs and pays for all other tenant improvements. The tenant uses its own architects, engineers, and contractors, with prior landlord approval.

• Tenant Improvements Costs: Fit-out costs for Class A or Prime buildings in major cities depends on the material specification of each fit-out, so market doesn’t established a regular price for fit-out. In spite of that normally a regular fit-out with standard materials range from USD 900–1800 per sqm including construction, furniture, wiring, design fees, etc. plus VAT (19%) applies to fit-out costs”.


COLOMBIA COSTA RICACOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Rent Quoted: Rent is quoted on a NN basis per square meter per

month in Colombian Pesos (COP).• Rent Payable: The tenant pays rent monthly in advance in COP. If the

lease is quoted in USD, tenant can pay in COP at the exchange rate at the time of payment. The tenant pays VAT, called I.V.A. (Impuesto al Valor Agregado). In Colombia. I.V.A. is 16% of the rent.

• Grace Period: Up to three months’ grace period for fit-out is common for shell space in a lease of 5 years term and one month for second generation spaces. Larger grace periods (up to 6 months) are granted in large transactions and 10 year terms.

• Rent Escalation: COP-denominated rent adjusts annually by Colombia CPI, sometimes with caps.


suspended ceilings and ceiling lighting. The landlord normally allows the tenant to select the contractor. Every buildings has its own construction code for tenant improvements.


to floors at 110–120 volts. Tenants that need 220 volts obtain permission to install extra wiring. 440 volts is rare in office buildings, but is starting to being delivered in brand-new buildings.

COMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Tenant improvement allowances are typical on first generation shell

space. Tenant improvement allowances on second generation space are atypical.

• Owners /developers appear to be most competitive on five to ten-year lease terms for build to suit and large occupier leases. For existing and second generation space three to five year terms are typical. First generation space lease may have a right of early termination after three years with tenant to compensate landlord for unamortized tenant improvements, commissions and any free rent provided.

• Sprinklers required in new construction. Code similar to US standards and came into effect recently.

• Seismic codes have been in place for a long time and are similar to US standards – “California Code”. The first code was published in 1974 and the current code was published in 2012.

• Backup generators included and typically cover 100% of power demand including air conditioning.

• Net leases are the norm. Landlord services major equipment such as air conditioning, elevators and back up generators as part of Common Area Maintenance - CAM. Landlord pays any real estate taxes, and building insurance.

• Drawings, permits and construction takes between three and six months.

• The typical rent free period is between one to three months, depending on how the space is delivered. If the landlord provides construction services it is possible to have some flexibility in the grace period – rent.

ECUADOR GUATEMALACOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Rent Quoted: Rent is quoted on a NN basis per square meter per

month in U.S. dollars (USD).• Rent Payable: If the tenant pays rent monthly in advance in USD, the

fee can be lower (depends on the negotiation) • Lease is quoted in USD, tenant pays in USD.• The tenant pays VAT, called I.V.A. (Impuesto al Valor Agregado). In

Ecuador. I.V.A. is 14% of the rent.• Grace Period: From 30 to 60 days, depending on the negotiation

and the area• Larger grace periods (up to 4 months) may be granted in larger

transactions• Rent Escalation: USD-denominated rent adjusts annually by U.S. CPI,

sometimes with caps.• The entire fit out-is paid by the tenant.• Tenant Work: The tenant is usually responsible for fit-out, including


• Tenants insure their premises separately.• The tenant pays for telephone and electricity.• Electrical Power: In new office buildings, electricity is generally

delivered to all floors at 220 volts. In buildings over 5 years, electricity is generally delivered at 110V (Tenants that need 220 volts obtain permission to install extra wiring).

COMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Rent Quoted: Rent is quoted on a NN basis per square meter per

month in U.S. dollars (USD).• Rent Payable: The tenant pays rent monthly in advance in USD.• The tenant pays VAT, called I.V.A. (Impuesto al Valor Agregado). In

Guatemala I.V.A. is 12% of the rent.• Grace Period: If office is delivered in grey shell, 30 to 90 days grace

period. If office is not delivered in grey shell, 30 days grace period. • Market had a mandatory term of 5 years.• Market suffers an annual increase of 4% to 5%, YOY.• The entire fit out-is paid by the tenant and there is no TI allowance.• Tenants insure their premises separately. • Tenant Work: The tenant is responsible for fit-out, including suspended

ceilings and ceiling lighting. The landlord normally allows the tenant to select the contractor. Every buildings has its own construction code for tenant improvements. All construction plans need to be approved by the Landlord.

• The tenant pays for all utilities such as telephone, electricity, internet• Electrical Power: In office buildings, electricity is generally delivered

to floors at 120/208 volts. Tenants that require 480 volts may obtain permission in order to have it installed, and must covered all related (permits and construction) costs.

• CAM charges include: CCTV for all public areas, lighting in all public areas, cleaning for all public areas, water, elevator maintenance, power generator, diesel for power generator, cleaning of windows from the outside of the building, security.

• External building signage available for Pent House areas only at an extra cost.


MEXICO PANAMACOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Rent Quoted: Rent is quoted on a NN basis per square meter per

month in U.S. dollars (USD).• Rent Payable: The tenant pays rent monthly in advance in USD. If the

lease is quoted in USD, tenant can pay in MXN at the exchange rate at the time of payment. The tenant pays VAT, called I.V.A. (Impuesto al Valor Agregado). In Mexico. I.V.A. is 16% of the rent.

• Grace Period: Up to three months’ grace period for fit-out is common for shell space in a lease of 5 years term and one month for second generation spaces. Larger grace periods (up to 6 months) are granted in large transactions and 10 year terms.

• Rent Escalation: USD-denominated rent adjusts annually by U.S. CPI, sometimes with caps.



• Tenants insure their premises separately.• The tenant pays for telephone and electricity.• Electrical Power: In office building, electricity is generally delivered


COMMON PRACTICES IN THE CORPORATE OFFICE MARKET:• Rent Quoted: Rent is quoted on a NN basis per square meter per

month in U.S. dollars (USD).• Rent Payable: The tenant pays rent monthly in advance in USD.• The tenant pays VAT, called I.T.B.M.S (Impuesto de• Transferencia de Bienes Muebles y Servicios).• In Panama I.T.B.M.S is 7% of the rent.• Grace Period: Up to three months’ grace period for fit-out is common. • Tenants can negotiate special grace periods for special cases. For

shell space in a lease of 3 to 5 years term.• Larger grace periods (up to 6 months) are granted in large transactions

and 10 year terms.• Rent Escalation: USD-denominated rent adjusts annually by negotiation

between Landlords and tenants• The entire fit out-is paid by the tenant.• Tenant Work: The tenant is usually responsible for fit-out, including




PERUCOMMON PRACTICES IN THE CORPORATE OFFICE MARKET:Lease Contract

• Term: Between 3 to 5 years.• Break: Early termination from the tenant is usually subject to payment

of a penalty and is usually specified in the contract. • Renewal: Tenant right to renew is set in the contract.Occupancy Cost

• Lease: Rent is usually quoted in US dollars per sq. m. per month.• Gross rent: is usually in US dollars or local currency at an agreed

value. Maintenance charges are extra. Rent and maintenance are paid monthly and in advance.

• Free rent: Up to 3 months to fit out (it depends on the size of the office).

• Escalation: The rent is annually adjusted according to the CPI USA or 3%, whichever is higher.

• Common Area Maintenance: The average fee for common area maintenance is between US$3.00 to US$3.50 per sqm. This is added to the monthly payment.

• Taxes: The property tax (“Alcabala”) is paid by the landlord. Value Added Tax (IGV) is 18% of the total rent value. The owner collects it from the tenant in addition to the base rent.

• Utilities: The tenant pays directly for telephone, electrical costs, cleaning services and other service utilities.

• Tenant improvements: The landlord usually delivers the spaces previously occupied as received, but new spaces will be delivered in shell condition.

• Shell condition includes concrete floors, concrete roof, finished bathrooms and air conditioning ducts and fire safety until the office entry.

• The tenant is usually responsible for any improvement, without receiving participation of the owner.

• Restoration: In general, the tenant must restore the space in its original condition. Although this is negotiable.

• Security Deposits and Guarantees: A security deposit of 1-3 months’rent is typical, as either a letter of guarantee. If a landlord does not receive the rent, the landlord can perform the letter of

guarantee. The cost for this letter ranges from 2%–5% of the annual gross rent (the tenant pays for it).

• Bonding (fianza). If a landlord does not receive rent, the landlord can collect the rent from the Fianza. The fee for bonding ranges from 2%–5% of the annual gross rent.

• Car Parking: Parking spaces are not usually included in the rent, and are negotiated separately.

• Other Occupancy Costs: Municipal Taxes: The tenant pays for municipal taxes related to community services such as street lighting, street security, maintenance, etc.


CBRE Mexico City Office

PROJECT MANAGEMENT LOCATIONS

ProjectsManaged in 17 LatAm Countries

Presence in 9 LatAm Countries

300+ ProjectManagementProfessionals Project Management Partners

Project Management Offices

Project Management from Argentina Office


CBRE Los Angeles Office

CONTACTSPROJECT MANAGEMENT LATAM

ARGENTINAAntonio Saborío, LEED AP, BD+C | PJM DirectorCBRE | Project Management Av. Leandro N. Alem 855 29th FloorT +54 11 4590 5700 | C +54 15 3585 [email protected]

BRASILHenrique Cicchetto, PMP | PJM DirectorCBRE | Project Management

Avenida das Nações Unidas, 14.171Rochaverá Corporate Towers | Crystal Tower –18º andarT +55 11 5185-4688 | F +55 11 94103-2463 [email protected]

CHILEBarbara Bernal, PJM-I, LEED AP | PJM DirectorCBRE | Project Management

Isidora Goyenechea 2800, Piso 35, Torre Titanium Las Condes, SantiagoT +562 2562 2616 | C +569 9324 [email protected]

COLOMBIAJuan Esteban Zabala, PJM-I | PJM DirectorCBRE | Project Management

T +571 4918783 ext. 1013 | C +57 317 3655961Address: Cra 7 #67-39 Piso 4, Bogotá, [email protected]

COSTA RICARoberto Cruz | Project Manager CBRE | Project Management T +506 4010-2483M +506 [email protected]

MEXICOJaime Viejo | PJM Managing DirectorCBRE | Project Management Pedregal 24 piso 17, Lomas de Chapultepec |México, D.F. 11000 T +52 (55) [email protected]

PANAMARicardo A. Ecker| PJM DirectorCBRE | Project Management

Plaza Credicorp Bank, Piso 5 | Panamá, Calle 50T +507 210 1675 | F +507 210 [email protected]

PERUNatalia Saenz PJM-I | PJM DirectorCBRE | Project Management

Av. El Derby N° 254 Of. 2206 | Santiago de Surco,Lima, PeruT +511 436 6200 Anexo 1006 | C +51 989 229 [email protected]|

VENEZUELAArturo Rico | PJM DirectorCBRE | Project Management

Av. Francisco de Miranda, Edif. Parque Ávila (Torre HP), Torre B, Piso 6, Ofic.6-B-1. Los Palos Grandes. Caracas 1060 - VenezuelaT +58 212 285 47 49 ext 100 | F +58 212 285 26 56C +58 424 278 [email protected]

CBRE Mexico City Office

www.cbre.com

PROJECT MANAGEMENT LATAM

SERGIO PANERO, PJM-ISR. MANAGING DIRECTOR


T. +(55) 5284 [email protected]

CAROLINA FOLEY, PMP, PJM-I,LEED GAOPERATIONS DIRECTOR


M +55 11 9 8867 [email protected]

DISCLAIMER 2016 CBRECBRE Ltd has taken every care in the preparation of this report. The sources of information used are believed to be accurate and reliable, but no guarantee of accuracy or completeness can be given. Neither CBRE, Haworth, nor any director, representative or employee of CBRE company, accepts liability for any direct or consequential loss arising from the use of this document or its content. The information and opinions contained in this report are subject to change without notice.

No part or parts of this report may be stored in a retrieval system or reproduced or transmitted in reprographics, recording or otherwise, now known or to be devised without prior consent from CBRE

LATAM FIT-OUT COST GUIDE - cbre.us/media/files/2017/project management/2016... · FIT-OUT COST...

Documents

Transcript of LATAM FIT-OUT COST GUIDE - cbre.us/media/files/2017/project management/2016... · FIT-OUT COST...