Last week, in a visit to Bogotá, Colombia, we held a series of meetings with government officials, economists, consultants, fund managers and real estate specialists, as part of our on the ground research effort.

1. EXECUTIVE SUMMARY
Last week, in a visit to Bogotá, Colombia, we held
a series of meetings with government officials,
economists, consultants, fund managers and real
estate specialists, as part of our on the ground
research effort. Our discussions centered on:
• Recent slowdown in economic activity
• Policymakers’ responses to the aforementioned
deceleration, namely through fiscal and monetary
stimulus, and intervention in the foreign exchange
market
• Political backdrop, with President Santos aiming for
reelection in 2014, while the government conducts
negotiations with the FARC guerrilla movement
• Improved investment climate in the country which
has been a function of positive developments
on the security front and pro-market economic
policies
• Dynamics in the real estate market, with market
conditions generally trending positively across
residential and commercial, albeit with important
differences amongst the major urban centers
TOTAL GDP:
2012: $355 billion
(global ranking: 31)
GDP PER CAPITA:
2012: $10,792*
(global ranking: 82)
GDP GROWTH RATE:
2012: 4.0% / 2013E: 4.0%
UNEMPLOYMENT: 2012: 9.6% / 2013E: 9.5%
INFLATION: 2012: 2.5% / 2013E: 2.4%
COP/USD: 201: 1767 / 2013E: 1875
TRADE BALANCE/GDP:
2012: 1.4% / 2013E: 1.1%
2012 GINI COEFFICIENT: 55.9
2012 INFRASTRUCTURE BANKING: 93 (144)
2012 INVESTMENT/GDP RATIO: 27.7%
2012 PUBLIC SECTOR DEBT/GDP: 40.2%
2012 FISCAL DEFICIT/GDP: -0.8%
ECONOMIC
SNAPSHOT
Colombia Trip Report – May 2013
TRENDS + VIEWS
JAMESTOWN LATIN AMERICA
Real Estate Private Equity
www.jamestown-latam.com
Contact:
Bret Rosen – Managing Director, Research
+1 212-652-2141
brosen@jamestown-latam.com
Rio de Janeiro • Bogotá • Atlanta • New York
Sources: Credicorp Capital, DANE, Econcept, IMF, World Bank, Banco
de la Republica, The Global Competitiveness Report 2012-13, CIA World
Factbook
*GDP per capita based on purchasing power parity. In nominal terms,
GDP per capita = $7,800.

2. Optimism abounds, industrial production cools, and
consumer demand increases
Optimism toward the economic backdrop in Colombia
is widespread amongst international investors, as the
country has made important advances over the last
decade. Once off the radar of global capital markets,
Colombia has become a clear target for investors, as the
sovereign achieved investment grade status in 2011.1
In
fact, Colombian sovereign bond yields 3.32 percent on
the country’s benchmark 2024 issue, while in January,
the government issued a ten year bond at just 88 basis
points above U.S. Treasuries, a testament to investor
enthusiasm in the country.2
However, on our visit, a
clear tempering of sentiment is occurring; while over
the last several years, economic growth in Colombia has
been above the regional average, there has been a clear
deceleration in activity over the last couple quarters.
While the economy boomed, with 6.6 percent growth in
2011, the trend for 2013-14 appears to be at around four
percent, which is considered slightly below potential for
Colombia.3
Both the external environment and local factors account
forthiseconomicslowdown. TermsoftradeforColombia
have shifted negatively of late, with world demand for
commodities slowing. If one expects global growth to
remain relatively subdued, then this factor could hamper
growth for the rest of 2013. Some disappointment
in terms of the pace of growth of oil production, and
the absence of any
meaningful new
discoveries are
also tempering
enthusiasm in that
space. Reserves in fact
stand at just six years
of total production, well below other peers. Notably,
manufacturing has underperformed for quite some
time, with seven of the last eight months displaying
year over year contractions.The latest data on industrial
production was especially disappointing, having slipped
11.5 percent year over year in March. Forty two of forty
eight sectors within industry contracted in March.4
Industry continues to struggle with competitiveness
issues, some of which may be temporary (an appreciated
exchange rate), and others which could take longer to
resolve (namely infrastructure bottlenecks).
On the domestic front, local economists cite issues
related to public investment, especially inability to
roll out key infrastructure projects, as responsible for
curtailing growth. Consumption, which accounts for
60 percent of economic activity in Colombia, has been
trending at slightly above four percent growth on a year
over year basis, supported by a decent jobs market and
easing credit conditions. Indeed, two-hundred basis
points in rate cuts, since July by Banco de la Republica,
to 3.25 percent (just a one quarter point above the all-
Colombia Trip Report – May 2013
TRENDS + VIEWS
1 Current sovereign ratings for Colombia are: SP has a BBB, Moody’s a Baa3 and Fitch BBB-.
2 Bloomberg, as of this writing.
3 Finance Minister Mauricio Cardenas has stated that potential growth for Colombia is approximately 4.8 percent.
4 DANE, Colombia’s official statistics agency.
2005
2006
2007
2008
2009
2010
2011
2012
2013E
2014E
2015E
0
1
2
3
4
5
6
7
8
CHART 1: COLOMBIA ANNUAL GDPYEAR-ON-YEAR (%)
Source: Dane, World Bank, Bloomberg
PAGE 2
The economy has
decelerated of late,
in line with softer
terms of trade
TRENDS + VIEWS MAY 2013

3. time low registered in the post-Lehman period), have
given a boost to consumer credit conditions.
Inflation not an issue, but the strength of the peso is
Inflation meanwhile is very subdued, with the last
figures running at approximately 2 percent on a year
over year basis.
Expectations for the next year(s) are anchored at or
below the three percent official target, with consensus
looking for 2.5 percent inflation this year.5
With some
slack evident in the economy, inflation pressures are
subdued. However, economists do expect inflation
to increase somewhat over the remainder of the year
due to the lagged impact of interest rate cuts and fiscal
stimulus in the pipeline.
Indeed, the level of the peso (COP) remains perhaps the
most controversial economic topic in Colombia, even as
the COP has weakened several percent in the last few
months. Since hitting a 52 week high versus the dollar
on January 14th, at 1,759, the COP now hovers near
1,850.6
Banco de la Republica has been intervening in the
currency market on a daily basis, via purchases of USD
30 million in each session. Key officials have jawboned
the currency as well,
and some form of
capital controls
cannot be totally ruled
out if the peso were
to appreciate back
through the 1,700-
1,750 level, although
officials are clear in communicating that they prefer
not to resort to such heterodox policy measures. The
decision to lower the benchmark rate by two hundred
basis points has alleviated pressure on the COP,
and indeed many observers believe that the central
bank’s decision to ease rather aggressively has been
to some extent driven by its intention to weaken the
peso. Most likely, the central bank will forge on with
dollar purchases, which are due to expire this month
and indeed Finance Minister Mauricio Cardenas has
been vocal about the need to continue to accumulate
more USD. This policy approach serves the dual role
of weakening the exchange rate along with building
central bank reserves. Weaker terms of trade and some
disappointment in energy production also have served
to push down the value of the peso.
Pension fund reforms underway
The administration is also evaluating other indirect
means to weaken the COP, with the intent of boosting
PAGE 3
The central bank
is intervening to
weaken the peso,
intending to assist
the export sector
CHART 2: COLOMBIA INFLATIONYEAR-ON-YEAR (%)
0
1
2
3
4
5
6
7
8
9
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Source: Dane, Banco de la Republica
5 Banco de la Republica, May inflation survey.
6 Bloomberg, as of this writing.
Colombia Trip Report – May 2013
TRENDS + VIEWS
CPI
CPI Net of Food
2006 2007 2008 2009 2010 2011 2012 2013E 2014E
0
500
1000
1500
2000
2500
CHART 3: COP/USDYEAREND EXCHANGE RATE
Source: Bloomberg
TRENDS + VIEWS MAY 2013

4. competitiveness especially in the industrial sector. One
mechanismabouttobeimplementedisamandatoryshift
in the asset allocation of the country’s pension funds,
which currently manage in the neighborhood of USD
60 billion.To briefly summarize, the government would
like to lift the lower limit on the amount of capital that
pension funds allocate in non-COP instruments, which
could increase dollar demand by around USD four billion
(over an as yet undetermined time frame).7
According
to those that support this strategy, the idea would 1)
increase diversification of pension funds’ portfolios, as
currently over 90 percent of their assets are invested
locally; 2) prevent overvaluations from surging in local
equities and fixed income. The local equities market
is notably thin, with only four to five stocks that trade
reasonable volume on a daily basis. However, as pension
funds’ assets swell, due to the increased formalization
of the labor market and overall demographics in the
country, pension funds are forced to bid up stocks and
bonds locally for lack of other investment alternatives.
The market capitalization of Ecopetrol, the state oil
company, at one
point exceeded that
of Petrobras, whose
production is several
times more than
Ecopetrol, partially for
this reason; 3) lead to
the aforementioned
increased USD demand in the neighborhood of USD four
billion as pension funds move out of COP denominated
assets into USD paper. Depending on the time frame for
pension funds to carry out this reallocation, a move in
the COP-USD exchange rate could result as this dollar
amount represents a significant degree of USD demand.
There are also plenty of criticisms of this strategy, namely
that authorities would be pushing the local pension
funds into lower yielding USD paper. Some point out
that this strategy essentially utilizes the savings of the
working class in Colombia to subsidize the export sector
via an indirect depreciation of the peso that would result
due to the changes.
Infrastructure in Colombia remains poor
While the government would prefer an exchange
rate above 1,900, it is easy to blame the slowdown in
industrial production squarely on the COP, and minimize
other factors. Local businessmen always emphasize the
poor state of infrastructure in Colombia, an issue the
Santos government is trying to address, although it is
facing many issues in terms of execution. Nonetheless,
Colombia faces geographical obstacles in terms of its
infrastructure build out, namely that the country contains
wide areas of the Andean mountain range and large
swathes of jungle that inhibit connecting the various
urban centers of the country. Geographical obstacles
between cities inhibit infrastructure projects aimed to
connect key cities. Still there is an immense amount
that needs to be done to improve the country’s ports
and roads, which rank poorly in international surveys.8
One of our interlocutors mentioned that it costs more to
ship a good from Bogotá to Cartagena than it does from
Cartagena to NewYork.
7 http://www.bloomberg.com/news/2013-04-15/colombia-draws-pension-funds-into-battle-to-weaken-peso-1-.html
8 According to the most recent Global Competitiveness Report (http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2012-13.pdf), Colombia’s infrastructure ranks 93rd out of 144 countries
surveyed. Quality of roads rated 126th, and ports placed 125th, which places Colombia along many underdeveloped countries in Africa.
Changes to the
pension funds’
investment profile
can help weaken the
currency
PAGE 4
Colombia Trip Report – May 2013
TRENDS + VIEWS
CHART 4: COLOMBIA INDUSTRIAL PRODUCTION
-20
-15
-10
-5
0
5
10
15
Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Source: Dane
Year-on-Year (%)
TRENDS + VIEWS MAY 2013

5. Demand for credit still strong but slowing to more
sustainable level
In conjunction with the economic slowdown, credit
growth in the overall economy has decelerated over
the last year or so, which at first pleased the authorities,
who had expressed concern at rapid growth in leverage
within the consumer segment last year. Notably the
central bank had made mention of this development in
their policy meeting minutes, also referencing the rapid
rise in home prices as a result of credit accessibility.
Overall credit growth is expanding at 15 percent on
a year over year basis versus over 20 percent, a year
ago, while the annual expansion in mortgage credit
outstanding has undergone a similar move, slipping
from 36 percent in early 2012 to 25 percent according to
the most recent data.9
Part of this development is due to the overall credit cycle,
as Colombians took on substantial debts in prior years
and are hence less likely to add to their credit burden
until certain loans are paid off. Still credit to GDP of 38
percent and an outstanding mortgages to GDP ratio of
4 percent are low by regional and global standards as
the financial system still struggles somewhat with the
legacy of the 1990s when the country faced a major
financial crisis. The overall pace of credit growth is
considered by economists to be more sustainable than
the rate seen last year.
The central bank decision to lower the benchmark rate to
3.25 percent should provide a boost to credit growth in
the months ahead. Local economists expect the central
bank to stay on hold for the near-term, and allow the
stimulus already in the pipeline to work its way through
the system. The government also recently announced
a fiscal stimulus package, focused on construction and
investment in infrastructure. The program is intended
to add one percent to GDP growth. Meanwhile, it is
9 Data provided by Econcept and Superfinanciera.
CHART 5: CREDIT GROWTH IN FINANCIAL SYSTEMYEAR-ON-YEAR (%)
CHART 7: MORTGAGES OUTSTANDING AND GROWTH RATE (%)
-40
-20
0
20
40
60
80
Jan-08
Jun-08
N
ov-08
A
pr-09
Sep-09
Feb-10
Jul-10
D
ec-10
M
ay-11
O
ct-11
M
ar-12
A
ug-12
Jan-13
0
50,00
10,000
15,000
20,000
25,000
0
5
10
15
20
25
30
35
40
Jun-08
Sep-08
D
ec-08
M
ar-09
Jun-09
Sep-09
D
ec-09
M
ar-11
Jun-11
Sep-11
D
ec-11
Sep-12
D
ec-12
M
ar-12
M
ar-13
Jun-12
Source: Superfinanciera and Econcept
Source: Superfinanciera and Econcept
Credit Growth
NPL Growth
COP bn Outstanding
Y/Y Growth
PAGE 5
Colombia Trip Report – May 2013
TRENDS + VIEWS
0
10
20
30
40
50
60
Brazil Chile Colombia Mexico Peru United States
CHART 6: MORTGAGES/GDP (%)
Sources: Apoyo Consultoria, Econcept, Chile Ministry of Finance
TRENDS + VIEWS MAY 2013

6. expected by most that the central bank will adopt a
more cautious monetary stance after its aggressive cuts
over the last months.
Politics: Pointing toward 2014 elections
The political backdrop, as always, is particularly
entertaining for those that enjoy a little bit of drama.
President Juan Manuel Santos’ approval ratings
have fallen somewhat in recent months. Recent
public opinion polls place his support at just under 50
percent, compared to
75 percent in the
first months of his
term in 2010.10
His
rivalry with former
President Alvaro
Uribe dominates
chatter locally. Santos
was Uribe’s Minister
of Defense, and likely owes his presidency to Uribe’s
support when he left office. However, since assuming
the Presidency, the two have been odds, namely over
Santos’ conciliatory approach toward Venezuela and
the rebel organization FARC, with which he initiated
peace negotiations several months ago. Uribe prefers a
more bellicose treatment of the FARC and doesn’t trust
the guerrilla group, based on prior failures to come to
agreements at the bargaining table.
The Santos-Uribe split drives political discussion in
the country, and with presidential elections in 2014
approaching, is an important driver as coalitions are
formulated. Whether Santos would seek reelection has
been a big question mark, but most indications suggest
that he will. If the government is able to secure a peace
agreement with the FARC – and Santos had stated that
this hopefully would occur by November – his popularity
would likely increase and provide sufficient momentum
into the elections. The negotiations come against a
backdrop of a weakened FARC, as a good portion of
its leadership has been captured or eliminated. Its
overall membership has dwindled in recent years,
from an estimated 18,000 guerrillas five years ago to
perhaps under 8,000 currently. While the FARC still has
the ability to wreak havoc, especially via attacks on oil
pipelines, its overall capabilities have been minimized,
and it no longer controls the vast swathes of land that it
dominated in the late 1990s and early 2000s.
We should highlight that many locals express skepticism
about this process, which is occurring in Havana,
Cuba. Many believe that any peace agreement will lack
teeth and that this process is more political, aiming to
boost support for the government and the president’s
reelection campaign, rather than bringing a true peace
to the country.The current talks center around a number
of topics, namely agrarian reform, amnesty for certain
members of the FARC, the ability of FARC members to
seek political office, and overall economic policy. Despite
some of the criticism of the talks, namely from the
Uribista camp, should
a peace agreement
be delivered, this
would certainly boost
sentiment toward
Colombia, especially
in the international
investor community;
as we have mentioned, there has been a clear correlation
between foreign capital entering the country and
improvements in the security situation.
Should Santos seek reelection, he would be the
overwhelming favorite, as support for any leftist
candidate is generally marginal while the Uribe camp
10 Econcept: Political Questions and Economic Answers, February 2013 based on polls from ElTiempo, Datexco and W Radio.
PAGE 6
Colombia Trip Report – May 2013
TRENDS + VIEWS
In the next few
months, look
for the field of
candidates for 2014
elections to be
defined
Expect Colombia to
maintain economic
orthodoxy regardless
of whom the next
president is
TRENDS + VIEWS MAY 2013

7. does not boast any popular names. If Santos were to
refrain from presenting himself as a candidate, the
conventional wisdom appears that Housing Minister
German Vargas would be the most likely name to
emerge as a leading candidate. Vargas has gained
substantial support for the current housing program
occurring in the country. Regardless, as the names sort
themselves out in the weeks ahead, we believe there is
minimal risk of a shift away from market friendly policies
in Colombia. Santos of course is a known quantity who
has presided over a good period for Colombia and there
is little support for any radical shift – at the national level
at least – to any figures that might break with the key
pillars of economic policy making.
Real estate market: Shifting dynamics, but demand still
strong
Real estate in Colombia has been hot, in line with
our discussion about the improving economic and
investment backdrop in the country. The overall backdrop
for real estate demand, despite the deceleration in the
economy and vagaries of the Bogotá market, appears
to be relatively robust
due to structural
factors that should
remain favorable
for the foreseeable
future. Colombians
are repatriating
substantial amounts
of capital, as their confidence in the country improves.
Add on investment capital from foreigners entering
the country’s real estate market with Venezuelans that
are looking at Colombia as a safe haven, and one
notes a large ‘bid’ coming to the market – aside from
the favorable demographics trends domestically.
Furthermore, the failure of one of the country’s largest
brokerage firms, Intervalores, has also pushed locals to
further emphasize hard assets.
As credit availability has improved, and interest rates
have fallen, there has even been some worry that
certain sectors of the market have started to become
overpriced, namely for higher-end residences in Bogotá,
which according to our research, in some cases can
approach for $700 per square foot for new properties.
Bogotá, as the center of business, finance and politics
in the country, clearly attracts the most attention, but
it is important to note that the real estate market in
Colombia extends well beyond Bogotá. The country
has five cities with over a million people: Bogotá,
Medellín, Cali, Cartagena and Baranquilla. The free
trade agreement with the United States led over 700
Colombian enterprises to export to the United States for
the first time over the last twelve months. Meanwhile
record levels of foreign direct investment into Colombia
(over $15 billion alone last year) suggest that there is
plenty of promise beyond the residential sector.
Turning to the dynamics in the housing market, there is
a clear government imperative to boost the construction
industry, which impacts one’s analysis of the backdrop.
Earlier this year President Santos initiated a program
to provide 100,000 homes free of charge to the lowest
income Colombians. According to government reports,
the 100,000 homes should all be completed by year-
end, helping to address some of the housing shortage
for the lower economic classes while clearly providing
Santos a political boost. On top of this program, the
government recently announced another initiative to
provide subsidies on another 100,000 homes. The idea
for this venture is that the government will finance
part of the mortgages faced by buyers of homes below
200 million pesos, or slightly above 100,000 dollars.11
Mortgages will be effectively capped at 7 percent as the
11 http://www.minhacienda.gov.co/portal/pls/portal/docs/1/9546602.PDF
Lower rates, capital
from abroad and
government support
are buoying real
estate market
PAGE 7
Colombia Trip Report – May 2013
TRENDS + VIEWS
TRENDS + VIEWS MAY 2013

8. government covers the first 5 percent of payments on
mortgages for the first seven years (of a typical 15 year
mortgage). Banks would then be induced to hold this
rate fixed for the remainder of the life of the mortgage.
Indeed during our visit to Colombia, BBVA announced
its first mortgage below (net) 6%, publicizing a mortgage
rate of 5.9 percent.12
The government hopes that a shot
in the arm to the construction industry, which has been
lagging during this slowdown, will have important
multiplier effects for the economy, while also supplying
subdized housing to the needier economic classes in the
country.
City by city, and segmental commentary
Focusing on market characteristics, it is important
to assess market conditions on a city by city basis.
Obviously Bogotá is the country’s economic and
financial center, but this particular market has a
number of particular characteristics that differentiate
it from the country’s other urban areas. As mentioned
above, the left-leaning mayor of Bogotá has limited
the expansion of the city, preferring urbanization to be
more concentrated in higher rise buildings near the city
center. These decisions mean that zoning rules have
generally prevented the expansion of the city to the
degree developers might have preferred. According to
our interlocutors, the mayor also believes that it would
be difficult to provide public services should the city
extend much further.
The geography of the city also limits the direction of
development as the Andean mountains border the
city’s eastern edge.The net result is that prices for office
rents, homes in higher tier neighborhoods and so on are
more resembling of what might find in major US cities
such as Washington DC or Chicago. It should be noted
that there are some initial signs that this trend might
be shifting and indeed construction licenses for Bogotá
in March were up 29 percent year-on-year according
to the national statistics agency DANE - although a
good percentage of this increase can be attributed to a
doubling in approvals for social housing.
Nonetheless, the limitations on construction in Bogotá
have pushed developers toward the country’s other
major cities, namely Cali, Medellín, Baranquilla and
Cartagena. Unlike other Latin American countries
such as Chile and Argentina, where the capital very
much dominates the country, Colombia has five
cities with over a million people, and seventeen with
over 500,000, speaking to the opportunities beyond
Bogota. In particular, Cali has garnered attention as
the largest metro area close to the Pacific; as Colombia
increases trade with Asia, Cali’s location is proving to be
beneficial. Cities on the Caribbean such as Baranquilla
and Cartagena are apt to benefit from the free trade
agreement with the United States, and indeed exports
from Colombia to the US grew 20 percent in the first
year of the free trade agreement, while non-traditional
Colombian exports rose 18 percent.13
We would expect
over time that the free trade agreement should have
an even greater impact on commerce between the two
countries.
Turning to the dynamics of each market segment, 2012
12 La Republica, “ConTasa de 5.9 percent, BBVA entra a pugna por creditos.” May 17, 2013 edition, page 18.
13 http://www.miamiherald.com/2013/05/15/3399641/us-exports-gain-in-first-year.html
PAGE 8
Colombia Trip Report – May 2013
TRENDS + VIEWS
CHART 8: NATIONAL MONTHLY LABOR INDICATORS (%)
0
2
4
6
8
10
12
14
16
50
52
54
56
58
60
62
64
66
68
Jan-07
A
ug-07
M
ar-08
O
ct-08
M
ay-09
D
ec-09
Jul-10
Feb-11
Sep-11
A
pr-11
N
ov-12
Source: Dane, Banco de la Republica
Unemployment Rate
Global Participation Rate
TRENDS + VIEWS MAY 2013

9. was the best year of absorption on record for offices
space in Bogotá. The vacancy rate for office space
stands at just 5.1 percent, which is the lowest level in
half a decade. Top tier rents according to a study from
Jones Lang LaSalle, are up 14 percent on a year over
year basis, and can run up to $45 per square meter per
month. Current trends suggest that vacancies could fall
further and anecdotal evidence speaks to a major supply
shortage for top tier office space.14
Regarding the home market, sales in 2012 for the three
largest cities, Bogotá, Medellín and Cali, registered
a shade above 85,000 unit sales (both new and used
homes), which was down four percent from the prior
year. However, the average unit sales for the 2004-12
time period was 64,000 for these three locations.15
As mentioned earlier, overall financing for homes is
the cheapest in Colombia on record. Mortgage rates for
the typical home have moved toward single digits and
typically range from 8-12 percent. This is a function of
Banco de la Republica having lowered the benchmark
rate to 3.25 percent, and banks enjoying strong liquidity.
Furthermore the policy rate has fallen two-hundred basis
points in the last months, and yields on government
paper are at record lows (namely TES, which on 10-
year paper, yield under 5 percent).These developments
should be supportive of mortgage demand for the
foreseeable future.
Mortgage availability is improving, although still low by
international standards. In the late 1990s, mortgages to
GDP neared 10 percent, before the banking system and
mortgage market essentially imploded. Mortgages to
GDP fell to under 3 percent by 2005/06, and now stand
at 4 percent of GDP.16
On a year over year basis, total
mortgage credit is growing at 25 percent, although
notably the trend in non-performing loans is worsening
somewhat with NPLs increasing at 15 percent year over
year. Still non-performing loans account for just 2.4
percent of total mortgages as of February 2013.17
Regarding the supply of homes on the market, Medellín
surpassed Bogotá by end of year 2012. If one takes the
three major cities plus the extended areas of Bogotá,
total supply is approximately 40,000 homes versus the
eight year average of 30,000.18
As for the new homes
market, there was a 4.2 percent increase in dwellings
available at year-end 2012 versus the 15.1 percent
increase displayed in 2011, with Bogotá down 2 percent
and Cali off 17 percent. Bogotá is most supplied in the
lower-middle income strata (homes in Colombia get
divided into categories one to six, with six representing
the higher end), while Cali and Medellín display greater
number of homes for sale in the middle income and
upper-middleincomestrata.Forty sixpercentofavailable
homes in Bogotá are accounted for in the lower-middle
income as opposed to 37 percent in Medellín and 42
percent in Cali. While supply has ticked up in the major
cities, still, based on current supply-demand dynamics,
absorption trends should remain favorable.
In terms of pricing, Bogotá unsurprisingly is the most
14 Jones Lang LaSalle, “Bogota, Colombia Office Report,Year-end 2012.”
15 Banco de la Republica. “Analisis de la Cartera y del Mercado de Vivienda en Colombia.” Marzo de 2013.
16 Banco de la Republica report.
17 Econcept.
18 La Galeria Inmobiliara.
PAGE 9
Colombia Trip Report – May 2013
TRENDS + VIEWS
VACANCY
RATE
(%)
CLASS A RENTS
(US$/Sq. Meter/
Month)
CLASS A-B RENTS
(US$/Sq. Meter/
Month)
BOGOTÁ 5.1% 30-45 26-32
MEDELLÍN 3.7% 22-32 14-22
CALI 8.0% 21-26 13-23
TABLE 1: KEY OFFICE MARKET STATISTICS
Source: Jones Lang LaSalle, Cushman and Wakefield, Colliers
TRENDS + VIEWS MAY 2013

10. expensive market in Colombia with an average price
for new homes of 3.3 million pesos per square meter.
At current exchange rates, this comes out to around
$178 per square foot. Prices in Bogotá are up 7.4 percent
year on year in real terms. Medellín prices out at 2.2
million pesos per square meter ($119 per square foot,
up 3 percent year on year) and Cali averages 1.5 million
per square meter ($81 per square foot, an increase of 5
percent year on year). Notably in Bogotá homes in the
upper-middle income stratas 4-5 have seen the largest
hike in average prices; in Medellín it was the highest
strata, which saw the most impressive price increase.
Some other key statistical highlights:
• In 1Q 2013, units sold in Bogotá fell by 14.5 percent on
a year over year basis, and the total value of homes
sold for this period fell by 1.7 percent. Medellín and
Cali also saw declines in units sold, while Cartagena
and Baranquilla enjoyed increases of 7-8 percent.
• In Bogotá, homes above 600 million pesos saw the
most impressive volume of sales.
• As of April 2013, the number of square meters of
residential units on offer was up 2.6 percent for
Bogotá, year over year, 10.2 percent for Medellín,
down 5 percent in Cali, and up over 20 percent in
Baranquilla and Cartagena.
PAGE 10
Colombia Trip Report – May 2013
TRENDS + VIEWS
PRICE PER SQ. METER
(Millions of Pesos)
USDTERMS
(Dollars/Sq. Meter)
BOGOTÁ 3.3 $1,833
MEDELLÍN 2.3 $1,277
CALI 1.5 $833
BOGOTÁ
SURROUNDING
1.6 $888
TABLE 2: KEY RESIDENTIAL MARKET STATISTICS
Source: Banco de la Republica.
Based on price of new homes for sale.
TRENDS + VIEWS MAY 2013