20150129_cw_posts_blogLast December, theEconomic Commission for Latin America and the Caribbean (ECLAC) presented its forecasts for 2015 in the World Economic Forum in Davos, Switzerland. According to the group, the declining trend in commodity prices, the low dynamism of global demand and the dollar’s appreciation would be the main reasons for the poor economic performance of the region. The ECLAC study gathers data from 33 countries and, although such unfavorable scenario, pointed out that 2015 tends to be more favorable than 2014 for most of them.

Actually, each country responds in a particular way to macroeconomic rearrangements, as shown by the analysis of the office market in countries attended by Cushman & Wakefield advisory services.

In Brazil, the economic downturn has been promoting the occupation of high quality office buildings, joining companies formerly scattered in the city in a single high-standard space, increasing both synergy between the areas of these companies and individual workforce productivity. As regards industrial buildings, since they consist mainly of logistic distribution centers, whose performance is closely linked to internal consumption, the impact of the slowdown was little noticed. “In the retail sector, a sharp tendency is the outlet, an under explored segment which is attracting national and international investors“, explains Gustavo Garcia, Market Research Manager at C&W South America.

The stable and well balanced economy renders Colombia a market of great interest to multinationals in seek to expand their operations in Latin America. It is expected that a number of companies occupy vacant spaces in old Class A buildings while major companies move to new and more modern ones, delivered in the fourth quarter of 2014.

In Peru, for instance, is expected a increase in the stock of offices with rental and sale prices similar to those on the first and second halves last year. “In Lima, capital, and other cities as Tumbes, Piura, Moquegua, Tacna, among others, we are perceiving an increase in both office and retail — malls and business centers”, says Aissa Lavalle, General Manager at C&W Peru.

This also applies to Chile, which is receiving 120,850 square meters of new offices this year. So, according to Gustavo Valenzuela, Transactions Director at C&W Chile, “the appreciation of foreign currency, the lack of local investors, the reduction of construction costs and the high rental vacancy in the office market could represent an opportunity for foreign real estate investors”.

In Argentina, the vacancy rate is rising, however, some companies are renewing their contracts. “Given the expectations of a better business environment and economic recovery in 2016, it is possible for investments to be taken again in 2015”, explains Raúl Girini, Brokerage Director at C&W Argentina.

Finally, in Mexico, Jose Luis Rubi, Market Research Manager at local C&W, points out caution by investors, however, good opportunities and business can arise throughout the year.

The current scenario and the perception of experts signal that the real estate market in Latin America moves slowly, but with the possibility of a year better than 2014. The market appears favorable to investment in tenancies in the region. Good business will be open over 2015.