UNITED STATES - Latin America real estate is still seeing strong capital inflows and interest , according to a quarterly research report done by Pramerica Real Estate Investors.
Much of that activity is happening in Mexico as the country is attracting monies into various property types, suggests Paulo Gomes, vice president of research for Latin America for Pramerica.
"This was really the first country to attract institutional capital to the region and is continuing to do this, for all of the main property types of office, industrial, retail and apartments," said Gomes.
Mexico is said to be drawing many of the same types of tenants you would most likely see in the United States, at the same time as being large enough to accommodate the size of properties and large developments institutional investors are looking for.
Strategy for Mexican real investment investments tends to be either in acquisitions or new development, but many capital sources are looking at new development, according to Pramerica because there is a limited stock of ‘institutional quality’ assets.
Brazil is also said to be gaining its share of institutional capital, continued Pramerica, but the main focus here has been in the residential market as the country needs more housing to cope with its growth. Brazil has seen a significant amount of capital raised for residential development in the past 12 months.
At the same time, Argentina and Chile are beginning to see some interest from institutional investors, mainly through US-based opportunity funds and public REITs, according to Gomes.
"These two countries are much smaller and have been limited by just there sheer size. But this could change in the future as they get bigger and show off more what they have to offer," he added.
Pramerica completed its report at the end of May and gathered information through a variety of sources including local real estate brokers, developers, banks in the countries as well as talking to competitors of Pramerica.