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Outlook for real estate markets in Latin America bright and positive, new report suggests

The region is leading global economic growth in a V-shaped recovery, according to consultants Jones Lang LaSalle.
Pedro Azcue, chief executive of Jones Lang LaSalle Latin America, told a real estate conference in Chicago the region is on the cusp of capitalizing on its vast potential as a true economic growth engine.
‘Quick adaptability to the United States led recession has allowed the region as a whole to remain remarkably resilient during the economic downturn and to confirm bright prospects for the years to come,’ he said.
The company’s Latin America Market Perspective report says that in the last year there has been a seeming groundswell of interest among global investors covering various asset opportunities. The region’s large economies, including Brazil, Mexico, and Chile, among others, are continuing to ignite growth for Latin America.
The report points out that Brazil is in an enviable position with a strong high end office market due to supply constraints. The market has picked up pace along with rising tides in the global economy.
It says that Brazil is showing continuous forward momentum on all fronts including: foreign and capital investment.  São Paulo is leading Brazil with a well rounded economy and solid economic drivers are translating into consistent tenant demand for high quality office space. During the second quarter of 2010 the São Paulo market gained momentum, and vacancy rates trended downward as demand resumed for high end office and industrial space.
‘São Paulo’s strong demand conditions led to a decline in vacancy ratings and the city has exhibited relative stability over the last 18 to 24 months. The city’s low vacancy rate has attracted new development and the strong demand for land is driving prices up,’ said André Rosa, Senior vice president of Jones Lang LaSalle’s Brazilian Capital Market team.
Although Mexico was hit hard in the 2009 recession due to very close linkages to the US, Mexico City withstood the economic crisis with remarkable strength and its office market is projected to increase to nearly 13 million square feet in the next five years.
The report also points out that Chile continues to garner attention from investors around the world as it is noted for its standing as one of the most stable and transparent markets within Latin America. Santiago’s prime office market continued to exhibit strength despite the major earthquake in February.
Approximately 1.4 million square feet of new Class A and AB space will be delivered to the market in 2010 with much of this new inventory in the city’s fastest growing submarket, Las Condes.
Buenos Aires in Argentina has also seen a steady supply of newly constructed office space enter the market. But with national elections approaching in 2011, the continual political uncertainty is clouding Argentina’s economic outlook, according to Clay Dickinson, executive vice president of Jones Lang LaSalle Hotels.
On a whole, Latin America is well positioned for a decade of growth to come, it concludes. ‘Latin America’s office markets continue to brighten for investors, as a shift occurs from tenant to landlord favourable markets. Economic growth, rising standards of hiring and discovery of Latin America’s tourism assets all bode well,’ it says.