Thanks to sustainable economic growth in Latin America, the region’s real estate market is rapidly becoming a frontrunner in international real estate investing and, according to Pedro Azcue, the chief executive of Jones Lang LaSalle Latin America, “is on the cusp of capitalizing on its vast potential as a true economic growth engine”. Countries including Brazil, Mexico and Chile have strong commercial markets as well as residential interests, largely due to supply constraints on commercial buildings. Vacancy ratings throughout the region are in decline and it has also experienced stability relative to the rest of the global market. As a result, more developers are eying the area, making bids and driving land prices up.
While Mexico’s economy has taken a beating along with the U.S. economy in the past few years, Mexico City itself is projected to recover more quickly from the economic crisis than the United States and its commercial and office spaces are also expected to gain in desirability and square footage, with the market predicted to increase by about 3 million square feet by 2015.
All this growth and growth potential makes the Latin American market more “landlord-friendly” than its neighbor to the north, and, as a result, investors from around the globe, including in the United States, are leaping into the action. Azcue predicts that political uncertainty in South America could inhibit the growth of some markets, however, citing national elections in 2011 in Argentina as the reason that this country’s real estate market is lagging behind others in the region.