Boston, MA -- (ReleaseWire) -- 06/13/2014 -- Argentina's commercial real estate sector is undoubtedly affected by the wider macroeconomic environment, notably the country's high inflation rate and the poor business environment, which discourages inbound investment. However, the retail sub-sector is a bright spot in the real estate landscape, with continued good demand for high quality space.
We are forecasting GDP growth of 2.2% in 2014, a slowdown from 2013 and indicative of the economy's ongoing struggles. We also forecast that inflation will remain high in 2014 and 2015, creating instability both in the economy and in society, as well as pushing rental rates up.
Retail rental rates remain strong in all three cities that we cover, the capital, Buenos Aires; nearby La Plata; and C?rdoba in central Argentina. Rates remain high and growing, particularly for high-end retail space. However, we do highlight the impact of inflation on this.
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In the office sub-sector, we are less optimistic than previously, as a number of new developments will increase supply in a sub-sector that already suffers from fairly high vacancy rates.
We are least optimistic for the industrial sub-sector, which has the lower rental rates of all three cities that we survey. The sector is affected not only by the lack of inbound investment but also Argentina's lack of competitiveness abroad.
- According to the Buenos Aires Notary College, closures of real estate sales in Buenos Aires city rose by 16% in February 2014.
- The Belgrano office building in Buenos Aires was due to open in Q114.
Key BMI Forecasts
- Office rental rates are forecast to rise by 5-10% in Buenos Aires in 2015, and by 10% in C?rdoba, although inflation will account for some of this rise.
- In 2015, the largest retail rental rate increase, of 10%, is forecast for La Plata, while we see smaller rises, of 5%, although from higher base points, in Buenos Aires and C?rdoba.
- We are forecasting poor growth in industrial real estate rental rates in...
The Argentina Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Argentina Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Argentina.
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