Colombia’s situation has improved dramatically in the last ten years. The nation’s economy has remained stable, which has attracted a growing number of multinational companies, investors and institutional funds. The peace process has also improved internal security and stability, although challenges remain.
Local government has strengthened investment in key economic sectors, including infrastructure. As a result, more engineering companies are opening in Colombia, attracted by government contracts to build new highways. Other investment has focused on mining, education, technology and housing.
In addition, the government has signed several free trade agreements with countries such as South Korea, Israel and the United States, and has formed alliances with the European Union and the Pacific Alliance. These agreements will streamline business environment, and attract more multinational companies to the growing Colombian market.
KEY ECONOMIC STATISTICS, 2016
Five years ago, the office market in Bogotá and Columbia’s other large cities – Medellin, Barranquilla and Cali – had little new inventory. Companies interested in new office space and business expansion were limited to a few options. While Bogotá’s zoning plan accelerated the construction of several buildings in the main business district, these were delivered during a period of economic weakness, creating some over supply.
As a result, Bogotá’s office market has slowly shifted from the landlords’ favor to the tenants’. Institutional funds that bought office buildings expecting high returns are now competing with each other and offering tenant incentives, which has never occurred before in the market. This phenomenon has started to spread to other property types, including industrial and retail, that are also coping with excess supply.
Nonetheless, Colombia’s office market still holds appeal for landlords as well as tenants. Prices remain soft but are beginning to stabilize. The nation’s economy and business environment remain on the right track. There are still problems to solve, but the government and the people are feeling the positive winds of change.