MARKET OVERVIEW
REAL ESTATE MARKETS IN A CONTINENT OF GROWTH AND OPPORTUNITY
LATIN AMERICA & THE CARIBBEAN
MAJOR CITIES POPULATION Population (Million) GDP per capita (US$)(000s)
LATIN AMERICA & THE CARIBBEAN CITIES Regional Comparison charts
Prime Offices - Market Trends Clock
Prime Offices Asking Rent (USD/m2/month)
LATIN AMERICA & THE CARIBBEAN CITIES Regional Comparison charts
LATIN AMERICA & THE CARIBBEAN MAJOR CITIES
ASKING RENT VS. INVENTORY
26.00
29.00
31.00
CLASS A OFFICES ASKING RENT (US$/sqm/month)
40.00
CLASS A OFFICES INVENTORY (sqm)
25.00
21.00
3,800,000 3,160,000
23.00
4.950,000
2,400,000
21.00 17.50
1,700,000
1,197,000
139,000 92,090
6,800
8.00
17.00 788,500 196,800
LATIN AMERICA & THE CARIBBEAN
ARGENTINA KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
43,646,358 Buenos Aires 2,780,400 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
2.40 40.5 9.3 Argentine Peso 15
OVERAL VACANCY (%) (CLASS A OFFICES)
AVERAGE RENT (CLASS A OFFICES)
MARKET HIGHLINGHS
The increase in public service tariffs has reduced the disposable income of households, which was already deteriorated by the inflationary context, causing a decrease in internal consumption. Q2’s sharp contraction shows that the recovery in Argentina might turn out to be slower than previously expected despite the emergence of green shoots in some sectors of the economy, particularly in the construction sector. The end of the conflict with the holdouts and improvement in credibility towards the international markets, should facilitate the access to external credit, which would reduce the physical deficit.
LATIN AMERICA & THE CARIBBEAN
BAHAMAS KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
392,718 Nassau 13,878 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
1.2 -0.33 14.8 Bahamian dollar 1.0
BAHAMIAN DOLLAR Million
TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP ( BDmn)
MARKET HIGHLINGHS
The Bahamas is one of the wealthiest Caribbean countries with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 35% of GDP. The rest is attributed to manufacturing and agriculture.
LATIN AMERICA & THE CARIBBEAN
BRAZIL KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
206,440,850 Sao Paulo, Brasilia 8,515,767 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
-3.8 8.48 11.8 Brazilian Real 3.2
NET ABSOPTION /ASKING RENT – CLASS A
(Sq. m./Q)
(R$ /Sq.m./Month)
MARKET HIGHLINGHS
Brazil is currently experiencing one of the worst recessions in its history, with the economy likely to contract by at least 4% in 2016. Amidst economic mismanagement and a ballooning corruption scandal at Petrobras, the state-run oil company, the Brazilian Congress and Senate have voted to impeach Dilma Rousseff. São Paulo Class AA+ CBD average asking rent went down by 2.0%, closing the cycle at R$ 98.6 per sqm, the lowest level since 2012Q4. This fall is firmly related with the lack of information made public by owners.
LATIN AMERICA & THE CARIBBEAN
CAYMAN ISLANDS KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
56,732 George Town 264 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
2.4 -0.8 5.6 Dollar 0.82
VALUE OF PROPERTY TRANSFERS / CI$
NUMBER OF PROPERTY TRANSFERS
MARKET HIGHLINGHS
The total contribution of Travel & Tourism to GDP was KYD899.8mn (28.9% of GDP) in 2015, and is forecast to rise by 1.7% in 2016 Cruise visitors improved in the first quarter of 2016 by 12.5% to reach 612,150. Total cruise passengers per day averaged 6,727 persons. Air arrivals reached 112,778 visitors in the first three months of 2016, down by 2.5% compared to a year ago. The financial services sector, which remains the largest contributor to GDP, has an estimated growth of 1.3%
LATIN AMERICA & THE CARIBBEAN
CHILE KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
18,006,407 Santiago 756,096.3KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
2.1 3.1 6.9 Chilean Peso 650
SANTIAGO CLASS A & CLASS B OFFICE STOCK BY SUBMARKET
MARKET HIGHLINGHS
Santiago’s office market is spread throughout five main submarkets: Santiago Centro, Providencia, Las Condes, Vitacura y Huechuraba. With the recent renewed monetary ease wave in developed countries, the local currency stopped devaluating, leading to a steady inflation and no more interest hikes. Average asking rents for the prime corporate market were quoted in UF 0.49 or US$ 19.28 per square meter in 2016 Q2.
LATIN AMERICA & THE CARIBBEAN
COLOMBIA KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
48,786,100 Bogotรก 1,141,748 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
3.1 7.27 9 Colombian peso 2,920
AVERAGE NET ABSORPTION / AVERAGE ASKING RENT
MARKET HIGHLINGHS
The combined effect of falling exports and US monetary policy tightening has reduced appetite for investments. This has put significant pressure on the current account balance, causing the peso to lose nearly half its value since 2014 and raising the cost of imported products. Colombians voted to reject the peace agreement between the government and the FARC. The result represents a political blow to President Juan Manuel Santos and it will probably undermine his ability to pass the longawaited tax reform bill in Congress, which is designed to offset the shortfall in oil revenues. Inflation peaked at 8.6% YoY in June, the highest figure in recent years .
LATIN AMERICA & THE CARIBBEAN
JAMAICA KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
2,950,210 Kingston 10,991 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
0.9 1.8 13.7 Jamaican dollar 130
JAMAICAN DOLLAR Billion
TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP ( JMDbn )
MARKET HIGHLINGHS
The total contribution of Travel & Tourism to GDP was JMD481.6bn in 2015 (29.3% of GDP) and is expected to grow by 2.4% to JMD493.0bn (29.4% of GDP) in 2016. Travel & Tourism is expected to have attracted capital investment of JMD40.6bn in 2015. This is expected to rise by 4.9% in 2016 The improving economic conditions were welcomed by the IMF, which formally approved the disbursement of about USD 40 million under its Extended Fund Facility. The IMF program has helped produce tangible results for the economy: Jamaica jumped eleven places in the World Economic Forum’s Competitiveness rankings.
LATIN AMERICA & THE CARIBBEAN
MEXICO KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
119,530,753 Mexico City 1,972,550 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
2.5 2.97 4 Mexican peso 19
CLASS A & CLASS A+ INVENTORY (SQM)
MARKET HIGHLINGHS
Indicators on the domestic front remain positive. Employment, real wages, and credit access are all on the rise, and consumer confidence remains resilient. The Mexican peso saw a 14% drop in 2015 and continued to fall throughout the first half of 2016. In response Banxico, the Mexican Central Bank, raised the policy interest rate 50 bp to 3.75% One third of net absorption in all of Latin America for the year happened in Mexico City.
LATIN AMERICA & THE CARIBBEAN
PERU KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
31,151,643 Lima 1,285,216 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
3.3 3.13 6.8 Peruvian Nuevo Sol 3
CLASS A OFFICES - DISTRIBUTION OF THE VACANCY
(Sq. m.) (%)
MARKET HIGHLINGHS
Lima is home to one of the world Ě s most rapidly developing commercial real estate markets. Now approaching 1,725,000 m2 of leasable area, the market has more than doubled since 2012. Demand has been surprisingly strong this year, with approximately 115,000 m2 of net absorption in the first half of 2016. Economically, the country is showing solid figures, most of it based on its natural resources activities: mining and hydrocarbons sectors. We expect Peru GDP growth to come close to 4% this year and the next, due to the big public investments and mining sector growth.
LATIN AMERICA & THE CARIBBEAN
PANAMA KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
3,929,141 Panamá City 74,177.3 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
5.8 1.2 2.5 Balboa B/. 0.99
AVERAGE ASKING RENT& OFFICE CLASS BY SUBMARKET
MARKET HIGHLINGHS
Panama’s economy growth is likely to remain one of the highest in Latin America. It has grew by 6.2 percent in 2014, 5.8 percent in 2015, and for 2016 the forecast is 6.0 percent, rising slightly to 6.1 and 6.2 percent in 2017 and 2018, respectively. Several large infrastructure projects are in process of development, including the second Metro line and the New Tocumen International Airport. Fiscal and Labor incentives remain an important attraction, together activating market confidence, which keeps on attracting multinational companies to Panama.
LATIN AMERICA & THE CARIBBEAN
PUERTO RICO KEY FACTS POPULATION MAJOR CITIES TOTAL AREA
3,474,182 San Juan 9,104 KM2
GDP GROWTH (2015)(%) INFLATION (% p.a) UNEMPLOYMENT RATE (%) CURRENCY CONVERSION RATE (VS USD)
-0.6 -1.4 12.1 Puerto Rico’s dollar 1.0
US DOLLAR Million
TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO GDP ( USDmn )
MARKET HIGHLINGHS
At the macroeconomic level Puerto Rico has been experiencing an economic depression for 10 consecutive years, starting in 2006 after a series of negative cash flows and the expiration of the section 936. At a global scale, Puerto Rico's dependency on oil for transportation and electricity generation, as well as its dependency on food imports and raw materials, makes Puerto Rico volatile and highly reactive to changes in the world economy and climate. Its highly inefficient local government has accrued a public debt equal to 66% of its gross domestic product throughout time.
LATIN AMERICA & THE CARIBBEAN 2016 MARKET OVERVIEW
For more information please contact: Mauro Keller Sarmiento NAI Global +54 (11) 4320-4320 mkellersarmiento@naiglobal.com