1. Since 1998, GRI meetings provide a forum for the world’s leading real estate players to develop
valuable relationships, find new business partners, and strengthen their global networks.
MEXICOGRI
2016
TOMÁS GARCÍA NICOLÍN, Nuevos Proyectos, PEMEX
GUILLERMO SILBERMAN, Vice President, W.P Carey
JORGE AVALOS, CEO, FibraMTY
COLOMBIA
CHILE
PERU GRI
2015
INTERVIEWS WITH
CRISTIAN ARMAS MOREL, Director Ejecutivo, Empresa Armas
JUAN FELIPE YARCE VILLA, Country Manager Colombia, Grupo Lar
ALEJANDRO LUNA, VP Latam, GLL Real Estate Partners GmbH
TOMÁS URIBE, Managing Partner, Jaguar Capital
MAURICIO VARELA, CEO, Empresa Socovesa
ANDRÉS STÖRMANN, Partner, E&S Property Investment
ANTHONY DIBIASE, Principal, CA Ventures International
HERNANDO FORERO, Director, Grupo Pegasus
GABRIEL FLÓREZ, Gerente General, Péntaco
INTERVIEWS WITH
2. INTERVIEW WITH
TOMÁS GARCÍA NICOLÍN, Nuevos Proyectos, PEMEX
WHERE DO YOU SEE MEXICO IN THE REAL
ESTATE INVESTMENT CYCLE?
Mexico is a big country with diverse markets
within it. That being said, there are a lot of good
markets that are in the late stages of recovery or
early stages of expansion. I believe some of the
traditionally better opportunities are starting to
mature, bringing them closer to the later stages of
expansion.
SHOULD INVESTORS CONTINUE TO LOOK AT
MEXICO CITY OR SHOULD THEY START TO
LOOK TO SECONDARY CITIES?
Mexico City is, I believe, the heart of Latin America.
It is geographically constrained by hilly terrain and
historically has been highly regulated in terms
of zoning laws, which has made meeting the
demand for new space very difficult. I believe these
particular characteristics give it an extraordinarily
long expansion stage, particularly in central areas.
Therefore the investor looking for solid streams
of revenue, with lower returns driven by high
property/land values should look into Mexico City.
Long term investors looking for higher returns (and
risk) should definitely look into other expanding
main cities. Where the long term economic growth
projections of Mexico should yield them very
interesting returns, albeit with its inherent volatility.
HOW WILL THE INTRODUCTION OF THE
“MILA” (MERCADO INTEGRADO LATINO
AMERICANO) AND THE BROADER PACIFIC
ALLIANCE AFFECT INVESTORS’ APPETITE FOR
MEXICO?
I believe Mexico's market has been independent
and self-generated to the degree where the
countries fundamentals have become more
sustainable by the internal economy to a degree
where the prospect growth is not affected
significantly by it.
DO YOU SEE MORE INTERNATIONAL
INVESTORS BECOMING MORE ACTIVE? WHAT
DO THEY LOOK FOR IN MEXICO?
I believe we are experiencing an influx of investors
that has been growing over the last few years.
There are fundamental characteristics in the
present Mexican economy that are definitely
attractive to overseas investors looking for high
yields in emerging economies with strong long
term perspectives.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN MEXICO?
Pemex has a very interesting plan regarding their
unproductive non-oil related assets.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2016, AND WHY?
Industrial has an attractive prospectus in oil related
activities as it does in areas where new automotive
activity is present.
Mid and high end residential in Mexico City still
presents an attractive opportunity as does mixed
use in relevant cities outside Mexico City.
MEXICOGRI
2016
3. INTERVIEW WITH
GUILLERMO SILBERMAN, Vice President, W.P Carey
WHERE DO YOU SEE MEXICO IN THE REAL
ESTATE INVESTMENT CYCLE?
Like the US, it could be late innings. Many of
the portfolios have been sold. There is new
construction in all the different sectors. Local
funds have an excess of capital, but one has to
wonder how much lower cap rates can compress.
SHOULD INVESTORS CONTINUE TO LOOK AT
MEXICO CITY OR SHOULD THEY START TO
LOOK TO SECONDARY CITIES?
Outside of logistics, there are strong drivers of
growth outside of Mexico City.
HOW WILL THE INTRODUCTION OF THE
“MILA” (MERCADO INTEGRADO LATINO
AMERICANO) AND THE BROADER PACIFIC
ALLIANCE AFFECT INVESTORS’ APPETITE FOR
MEXICO?
I’m not sure about this one. The main driver of
growth in Mexico has historically been trade with
the US. Maybe this will change with these treaties.
DO YOU SEE MORE INTERNATIONAL
INVESTORS BECOMING MORE ACTIVE? WHAT
DO THEY LOOK FOR IN MEXICO?
Yes, they are looking for yield along with the rest
of the world.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN MEXICO?
Industrial production continues to make more
and more sense in Mexico, so we like that space.
The automotive region in the Bajio specifically
continues to expand. Auto production is cyclical,
but short and long-term; it is a true engine of
growth for the country. Hotels seem to be doing
well, but are also highly cyclical.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2016, AND WHY?
Probably industrial for the above reasons.
MEXICOGRI
2016
4. INTERVIEW WITH
JORGE AVALOS, CEO, FibraMTY
SHOULD INVESTORS CONTINUE TO LOOK AT
MEXICO CITY OR SHOULD THEY START TO
LOOK TO SECONDARY CITIES?
Our core strategy and investment fundamentals
are based on cities that have shown a GDP growth
above our National average. Cities like Monterrey,
Chihuahua, Querétaro, San Luis Potosi have
delivered sound GDP growths between 4% and
7% for the past 12 months. One of the main drivers
of investments in these locations is the automobile
industry which has triggered other real estate
developments such as office space, retail and
housing.
HOW WILL THE INTRODUCTION OF THE
“MILA” (MERCADO INTEGRADO LATINO
AMERICANO) AND THE BROADER PACIFIC
ALLIANCE AFFECT INVESTORS’ APPETITE FOR
MEXICO?
With the addition of the Mexican Stock Exchange
this year, the Andean Exchange is poised to
become the largest exchange and market in
Latin America; trumping Brazil’s Bovespa’s $ 1.23
trillion market cap, 381 issuers and population
of 199.3 million with its $ 1.25 trillion market cap,
971 issuers and 213.3 million population. Intra-
regional trade in South America, Central America
and the Caribbean represents 29% of the GDP,
while in Europe it represents 71% of the EU’s GDP;
the Andean Exchange is designed to increase that
percentage.
Although the integration of stock markets
represents a growth opportunity, it also leads
to higher interdependence, thereby facilitating
the likelihood of a contagion effect in case of a
financial crisis. Thus, the definition of regulatory
and supervisory powers to effectively supervise
market actors, standardize rules and harmonize
cross-border transaction settlement procedures
will be key to MILA’s success.
DO YOU SEE MORE INTERNATIONAL
INVESTORS BECOMING MORE ACTIVE? WHAT
DO THEY LOOK FOR IN MEXICO?
There is an abundant amount of institutional
money seeking out investment opportunities in
developing countries like Mexico. We believe these
investors are concerned about three main issues
when investing:
a) The governance structure of the SPV: They are
seeking for alignment between managers and
stock holders, transparency and no conflict of
interest.
b) Scale: Liquidity is a concern since most of them
have investment periods and some of them simply
like to do arbitrage.
c) Discounted Net Asset Value: The expected
returns have to be at a premium with respect to
their local market returns.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN MEXICO?
Suburban development in secondary cities with
a long time view that integrates housing, office,
retail and schools. There is a lot of planning and
MEXICOGRI
2016
5. money involved in these types of Master Plans
and a hence of responsibility for the developers
and the local authorities to look for environmental
issues, transportation, road systems planning and
density restrictions.
As an example I can mention a project developed
by one of our main Sponsors, Desarrollos Delta,
that has concluded one of the most promising Sub
Urban developments in Monterrey called “Valle
Poniente”.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2016, AND WHY?
Back office: In secondary cities like Monterrey,
Guadalajara, Chihuahua and Queretaro, there is a
need for Engineering Companies (Oil Companies),
Service Companies (Accounting Firms, Banks) and
Call Centres to rent back office spaces designed for
internal purposes and not as a front or corporate
office, at a cheaper cost of occupation.
Industrial logistics: There has been an intensive
growth in the automobile manufacturing industry
in México, creating a need for these and other
companies to invest in the logistics and distribution
business to fulfil the manufacturers’ needs for wear
housing, imports of raw materials and exports of
final goods.
MEXICOGRI
2016
6. INTERVIEW WITH
CRISTIAN ARMAS MOREL, Director Ejecutivo, Empresa Armas
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
In the consolidation step and developing strong
social living politics.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
Chile because the very high Return on
investment and IRR.
Colombia because the very big market, specially
in the Strato 4 and 5.
And Peru in the B and C+ sector.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
I don’t see any relation, the Investors select where
they allocate their money in relation to risk and IRR,
and the Andean Region, specialy Chile, Peru and
Colombia are the very best places to invest.
DO YOU SEE MORE INTERNATIONAL
INVESTORS BECOMING MORE ACTIVE? WHAT
DO THEY LOOK FOR IN COLOMBIA, CHILE,
PERU?
Yes I do, Brazil will, liberate high capital resources
that will go to Chile, Peru and Colombia.
And new resources taking the opportunity of
strong dollar versus local currency of each country.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
I see a lot of opportunities in the media class in
Housing projects and specially in social living in
Chile and Colombia.
COLOMBIA
CHILE
PERU GRI
2015
7. INTERVIEW WITH
JUAN FELIPE YARCE VILLA, Country Manager Colombia, Grupo Lar
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
I don’t know for Peru and Chile, but I think Colombia
continue to be at its peak in the investment cycle,
mainly because of its financial and macroeconomic
stability.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
I would say Colombia, because besides being
stable both political and macroeconomic, the
peace process should bring more attention to the
country.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
Mila has been what everybody expected, but
efforts should continue on that front to open
capital markets for other investors. The alliance we
will have to see what the main benefits are.
DO YOU SEE MORE INTERNATIONAL
INVESTORS BECOMING MORE ACTIVE? WHAT
DO THEY LOOK FOR IN COLOMBIA, CHILE,
PERU?
Yes. They will look mainly for infrastructure
projects.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
Infrastructure and housing.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
Housing and infrastructure. Because government
policies continue to be very friendly for investing
in this sectors.
COLOMBIA
CHILE
PERU GRI
2015
8. INTERVIEW WITH
ALEJANDRO LUNA, VP Latam, GLL Real Estate Partners GmbH
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
Chile has already seen the whole cycle for foreign
investors and is an active and attractive market;
Peru is already starting to move and already has
foreign investors participating in the market and
Colombia for reasons like financing and strata
ownership has been complicated for foreign
investors looking to acquire core assets, we hope
that changes in the short term.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
For investors like GLL any of the three would do
if we find the right asset. We are active in Chile,
Peru and Mexico and looking for opportunities in
Colombia.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
I think it really won’t affect in a big way as MILA’s
intention is to integrate equities and stock markets
in a way that its participants can invest in the other
countries stock exchange in an easy way in their
own currency and with local brokers. Actually for
foreigninvestors,lookingtoinvestinLatinAmerican
stock exchange markets, it presents as an option
that offers better products and opportunities.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY LOOK
FOR IN COLOMBIA, CHILE, AND PERU?
For sure, there are plenty of investors looking to
invest in these markets. The opportunities that
are being looked at really depend on the nature
of the funds and their capacity to assess risk, for
some an opportunity in a “value add” asset may
not be appealing because they might be “core or
core plus” oriented, while for others that may just
be their target.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
In all these countries there are various A+ Assets
under development that will be appealing to
investors in the near future. Every day more, the
competition to acquire the “Best in Class” asset
increases as funds become more available and
asset quality improves.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
The markets should adjust in a way that we see less
strata ownership overall, which ultimately helps to
stabilize and control the market rents, generates
interest from investors and at the same time drives
growth. Dollar denominated rents in any sector
(office, retail or logistics) will always be attractive to
foreign investors since they help to minimize the
risk that usually results from currency exposure.
Markets and countries where tax laws facilitate
investment and don’t punish the investor will also
be very attractive and favoured by domestic and
international investors.
COLOMBIA
CHILE
PERU GRI
2015
9. INTERVIEW WITH
TOMÁS URIBE, Managing Partner, Jaguar Capital
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
Colombia is in a very interesting point of the cycle.
It’s more compelling to invest in the country now
than it was a couple of years ago given the drastic
adjustment of our currency ensuing the drop in oil
prices. The economy is slowing down and will likely
have a couple of years of low growth. However the
fundamentals are still there - young population,
controlled inflation, relatively healthy fiscal balance
and a diversified economy.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA, CHILE, AND PERU?
We have seen several international investors that
are able and willing to take a contrarian view on
EM become recently attracted to our country as
a consequence of the drop of our currency. They
understand that the country has some of the
strongest fundamentals in the region and that real
estate is a long-term bet. They look for institutional
and economic stability and growth potential. In all
these variables Colombia stands out in the region.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
There’s great potential for urban renewal projects.
Both Bogota and Medellín have enacted zoning
regulations to curtail sprawl and incentivize
redevelopment.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
We want to maintain our focus on retail for middle
and low income population and secondary
cities. We believe we have a built a competitive
advantage over recent years for his product and
these market segments.
COLOMBIA
CHILE
PERU GRI
2015
10. INTERVIEW WITH
MAURICIO VARELA, CEO, Empresa Socovesa
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
Chile is having a strong 2015 year in the residential
market. Both prices and volumes are above 2014.
I think this cycle is going to moderate and during
2016 residential demand will soften.
In the office market vacancies are up in Santiago,
the main market for A class buildings. Market
conditions are favourable for companies looking
to find good lease conditions.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
IthinkChilecontinuestoofferfavourableconditions
for international investors in the real estate sector.
Profitability is available for good projects and savvy
investors, and the country provides an adequate
legal and institutional framework to work in.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
These are good news for these three countries.
It won’t affect real estate markets directly, but
reinforces the view that Chile, Peru and Colombia
are on the track of continuing their development
process.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA, CHILE, AND PERU?
In Chile we continue to see interest from
international investors, especially those with a
value view and medium to long term investment
horizon. Investors are attracted by Chile’s stable
economy and legal framework, and love the fact
that returns in the real estate industry are attached
to the unidad de foment (UF), tough are inflation
protected.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
The office market is probably the one that offers
the bigger and more sophisticated projects in
Santiago, Chile. Some of them are A class projects
with international standards, and are going to
provide great value in the medium to long term.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
The residential market in Chile and specifically in
Santiago, is very competitive and provides great
opportunities. As Chile continues to grow during
the upcoming years, the projects dedicated to
attend middle class, urban and modern consumers
are going to find a deep and favourable market.
In this regard, it is interesting to note the infilling
process that Santiago is undergoing. At Empresas
Socovesa we have participated of these processes
trough our companies and projects. More
information can be found at www.infilling.cl
COLOMBIA
CHILE
PERU GRI
2015
11. INTERVIEW WITH
ANDRÉS STÖRMANN, Partner, E&S Property Investment
WHERE DO YOU SEE COLOMBIA IN THE REAL
ESTATE INVESTMENT CYCLE?
TheColombianeconomyreporteda2.8%growthin
thefirstquarterof2015.Weexperiencedexpansions
of the sectors of commerce, construction and
financial services which recorded growth rates
greater than 4%. However, that was not enough
to offset the performance of the mining and
oil industry. We also experienced a lower rate of
exports and of government consumption, while
household consumption and gross fixed capital
formation recorded growth rates of 3.9% and 6%,
respectively.
Despite the deceleration of the Colombian
economy, the country leads the region’s growth
rates, above countries like Mexico, Chile and
Peru. Colombia´s expanding market, its political
incentives and its increasing construction sector
offer excellent opportunities to buy into a market
with an expected long-term growth.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
Peru and Colombia are definitely the two countries
within Latin America with the biggest potential for
investors in 2015/2016.
Despite the strong annual growth of residential
construction in Peru, the demand for this asset class
is still growing and is attracting new national and
foreign investors. The growing purchasing power
of the Peruvian population and the greater access
to loans are factors that favour the dynamism of
the Peruvian housing sector.
In Colombia, we are expecting a growing middle
class of approximately 37% of the population in
2020 and 46% in 2025. The Colombian government
has decided to invest approximately $16.8 Billion
Colombian Pesos in infrastructure and education
through a new incentive to boost productivity
and employment (PIPE 2.0) in order to create up
to 322,000 new jobs. Colombia tops the region for
doing business in 2015 and, according to the World
Bank, it ranks the tenth place worldwide and the
first place in Latin America in terms of investor’s
protection. It remains the benchmark in Latin
America in terms of implemented political reforms
to facilitate business and I think we can transfer
these figures to the real estate sector. In 2016, we
expect growing interest in the residential and
industrial property sector with larger participations
of foreign investors who are looking for profits
from Colombia´s currency depreciation.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
The Pacific Alliance bloc (Mexico, Colombia, Chile
and Peru) will continue to play a major role in
improving economic links with the more advanced
North American countries, through coordinated
macroeconomic policies and pragmatic
diplomatic relations. The “MILA” and the broader
Pacific Alliance are the foundations of the future
transnational projects, which will create added
value to these regions. It gives a positive signal, a
growing independence of Brazil´s market and we
COLOMBIA
CHILE
PERU GRI
2015
12. expect an increasing investors´ appetite especially
for Colombia, Peru and Chile.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA?
Yes, definitely! International investors are becoming
more and more aware of the advantages of
investing in Colombia and the Andean region.
While most common emerging Latin American
countries like Mexico and Brazil are stagnating,
countries like Chile, Peru and Colombia withdrew
the attention towards their investment markets.
Particularly Colombia with its outstanding
US$16,257 Million foreign direct investment in 2014
is one of Latin Americas most promising markets
for international investors.
E&SPI´s clients are mostly interested in industrial
properties, office developments in primary cities
like Bogotá and Medellin, but also in Warehouses.
We also expect a growing demand for residential
developments in secondary cities as well as
for special properties like hospitals. We think
international investors are looking for higher yields,
asset diversification and experienced local market
players with whom they can partner and grow.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
IpersonallylovetheAtlanticcoastofColombiaandI
see plenty of real estate projects worth mentioning
in Cartagena, Santa Marta and Barranquilla.
Projects like the “Cartagena Global Center”, a
combinationof“classA”offices,shoppingcentreand
Marriott Hotel, the project “Puerta de Oro”, which
will provide the country’s largest convention centre
and the mega-project “La Loma” in Barranquilla,
where the new city hall, several business centres
and apartment buildings will accommodate on 96
hectares gross area are projects that contribute to
the increasing prosperity of the region.
In Barranquilla, the Mayor Elsa Noguera has done
a great work throughout the last years. She
managed to change the cities face, investing in
infrastructure projects like “Puente Pumarejo”, the
airport redevelopment and the rehabilitation of
the river “Río Magdalena”. We expect Barranquilla
to gain even more importance in the near-term
and are currently acquiring foreign investors for
real estate projects in this area.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
We are most optimistic about the middle class
residential, industrial and warehouse sectors.
Colombia´s middle class will triple in the next ten
years, its purchasing power has doubled in the last
ten years and despite the growing construction
activities there is still an unmet demand for
residential property.
We also see more and more multinational
companies settling in Colombia. The growing
demand for adequate industrial and storage space
stimulated construction activities in this sector
throughout the last few years and in the context of
“MILA” and the broader Pacific Alliance we expect
this sector to grow even more in 2016.
COLOMBIA
CHILE
PERU GRI
2015
13. INTERVIEW WITH
ANTHONY DIBIASE, Principal, CA Ventures International
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
It depends on the product type. But in general
Colombia and Peru as a whole are still in growth
mode for office and residential. Santiago, Chile is
a bit overbuilt in office. In residential all three are
behind in purpose built residential rental property.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
I believe it will be Colombia over Peru and Chile
simply because of the overall size of the market
and the diversity of population in multiple markets
as compared to Peru which has only Lima and
Chile has only Santiago.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA, CHILE, AND PERU?
I do see more international activity. I believe this
is due to the markets becoming slightly more
evolved and political and economic stability. Also,
the evolution of investment funds from leaders
such as BTG Pactual and others are encouraging
to developers.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
I see rental, services oriented real estate growing.
Including rental which has been historically built
to sell is now being built as a rental property to be
held in a portfolio.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
I like student housing, purpose built rental
apartments and street level retail.
COLOMBIA
CHILE
PERU GRI
2015
14. INTERVIEW WITH
HERNANDO FORERO, Director, Grupo Pegasus
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
Although my perspective is biased towards
Colombia, the market I am active in, it seems that
all three markets appear to be off their peaks. It is
still not clear how far the adjustments will go and
when the markets will reach their troughs; yet,
the adjustments will depend to a large extent on
macro-economic factors that are in turn linked to
commodity prices. A significant correction in dollar
terms has already occurred; yet, corrections in local
currencies are still to materialize. One would expect
real local currency corrections to occur as well over
the next 18 months as a result of a reduction in rent
levels and a potential cap rate expansion. Offices in
Colombia, particularly in Bogota, provide a good
example of a sector in which rents appear to be
falling due to an imbalance between supply and
demand, and as a result a reduction in property
prices is expected.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
Given that the three countries have sound
economies and good medium term growth
prospects, the best opportunities in 2015/2016 will
probablybeofferedbythecountrythatexperiences
the sharpest market correction. On the basis of
the dollar denominated corrections, Colombia
probably offers the best short-term opportunity.
Notwithstanding the above, given that Chile has
the most mature and deep institutional real estate
market of the three; it could offer the largest and
most actionable institutional opportunities.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
Although the MILA is a positive initiative, trading
volumes linked to it are still low and its potential is
yet to be realized. We would need to see greater
cross-border activity by institutional investors in
the four countries for the MILA to have a material
impact on a capital intensive industry like real
estate.
ThePacificAlliance,aninstitution-lightgroupingfor
like-minded countries, does not in itself increases
investor appetite for its members. However, the
Alliance reaffirms the story of why these open-
market oriented democracies are attractive to
investors looking for prudent macro-economic
policies and the rule of law.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA, CHILE, AND PERU?
Although the global emerging market volatility
will in the short-term keep some international
investors away, international players with a long
term view will remain active as they take advantage
of investment opportunities offered by the current
macro context. In the medium-term, international
investor activity will grow as the real estate sector
institutionalizes and more real estate companies or
COLOMBIA
CHILE
PERU GRI
2015
15. funds raise institutional capital in the private and
public markets.
In the short-term, investors will be looking for
attractive entry prices; yet, over the medium and
long term these investors will be primarily looking
for growth. Moreover, they will also want to see
in the vehicles they invest in investor friendly
governance structures, seasoned management
teams with good track records, robust deal
pipelines and scale.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
There are several large mix use projects in
Colombia that are interesting for several reasons.
First, they are mostly built for lease rather than for
sale, a relatively new model in the country. Second,
the different uses will attract a mixed traffic that
will complement and reinforce each other. Third,
they have the necessary scale to attract large
institutional capital. Finally, some of these will
be built under a PPP (Private Public Partnerships)
framework that opens the door for a multitude of
opportunities to work alongside the government
in the development of large scale real estate
projects.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
The sub-sectors in Colombia I am most optimistic
about are Retail and Logistics. The first, given
the remaining low retail penetration in certain
neighbourhoods and cities and the continuous
growth in retail sales despite the slowing economy.
Tenant demand for high quality retail assets in
good locations remains strong.
The second, given the scarcity of high quality
institutional Logistics assets for rent. More so, the
considerable investment in road infrastructure
in the country is likely to create new demand for
Logistics space to serve both international and
inter-city trade.
COLOMBIA
CHILE
PERU GRI
2015
16. INTERVIEW WITH
GABRIEL FLÓREZ, Gerente General, Péntaco
WHERE DO YOU SEE COLOMBIA/ CHILE/ PERU
IN THE REAL ESTATE INVESTMENT CYCLE?
We see that Colombia is near the peak of the cycle
in many sectors. For example within the office and
the industrial sector, the vacancy has increased
dramatically in the main cities.
BETWEEN COLOMBIA, CHILE AND PERU
WHICH COUNTRY WILL PROVIDE THE BEST
OPPORTUNITY FOR INVESTORS IN 2015/2016,
AND WHY?
Given the fact that the Colombian market should
rebalance, there are great opportunities to come
because of distressed situations that come from
the fact that there is a great deal of the Real Estate
that was built for the past years that was sold to
retail clients and not to institutional investors.
The years to come should allow the industry to
professionalize and that is a great opportunity.
HOW WILL THE INTRODUCTION OF THE “MILA”
(MERCADO INTEGRADO LATINO AMERICANO)
AND THE BROADER PACIFIC ALLIANCE AFFECT
INVESTORS’ APPETITE FOR THESE COUNTRIES?
It will increase because of a broader market.
DO YOU SEE MORE INTERNATIONAL INVESTORS
BECOMING MORE ACTIVE? WHAT DO THEY
LOOK FOR IN COLOMBIA, CHILE, AND PERU?
I believe they are looking for returns that given the
Latin America country risk are worth taking. In that
sense they are looking for stable countries with
a regulatory environment that won’t change the
game rules as they see fit.
WHICH NEW OR UPCOMING REAL ESTATE
PROJECTS DO YOU SEE AS THE MOST
INTERESTING IN THESE COUNTRIES?
We are fans of existing assets and we believe that
given the current economy, there is a lot of the
interesting stuff that is going to come from what
we already have or what is getting built right now.
WHICH SUB-SECTOR[S] ARE YOU MOST
OPTIMISTIC ABOUT IN 2015/2016, AND WHY?
I believe sectors like industrial are going to be very
interesting within the next 24 months. With the
economy slowdown and the fact that the majority
of the industrial companies in Colombia still own
their real estate there is going to be an opportunity
for the funds industry to provide capital and for
the companies to monetize part of their assets.
COLOMBIA
CHILE
PERU GRI
2015