Peru Real Estate Report Q4 2011
Business Monitor International, October 2011, Pages: 46
Business Monitor International's Peru Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Peru's Real Estate industry.
The outlook for Peru’s property market is positive, underpinned by strong economic growth and rising domestic consumption combined with low unemployment. The risk to the outlook is the deteriorating global economic growth outlook and a higher aversion to riskier assets by global investors. Peru is export-dependant and therefore will be adversely affected by a double-dip recession or a hard landing in China. However, since Peru has a limited national debt compared to its neighbours and has accumulated fiscal surpluses in recent years, this risk scenario is not our core view.
Key factors include:
- Real GDP growth in Peru is forecast by BMI to be at 6.2% in 2011 and 4.9% in 2012. Economic growth is being largely driven by domestic consumption, business confidence, exports and construction. This backdrop provides strong support for property demand.
- Peru’s office property market is now attaining rental growth across the major cities and at higher levels than 2010. The supply of class A space will increase, possibly increasing vacancy rates. However, new supply should be absorbed considering the strong current demand for office space.
- Domestic industry is beginning to transform raw materials and generate higher value products. This movement to produce more value-added products is leading to increasing total industrial production, which is in turn spurring development of the industrial property market. Total manufacturing output is expected to grow by around 10% over 2011.
- With the surging growth of the economy, consumer spending power has increased, which is driving retail growth, and with it, the retail property sector. Investment in shopping centres has accelerate sharply in the last few years as the malls expand into the outer provinces.
- Peru ranks first in Latin America for improving business regulation, according to a report by the International Finance Corporation and the World Bank, issued in November 2010. Peru has moved up 10 places in the global ranking of 183 economies. However, according to Jones Lang LaSalle’s Global Real Estate Transparency Index 2010, Peru is ranked poorly, at 72nd out of the 81 countries surveyed for real estate transparency in 2010.
- China has made significant trade inroads into Latin America, largely as a result of its appetite for minerals. Among other partnerships in the region, China has become Peru’s second largest trading partner for imports and exports – after the US – as of December 2010. Edward Mc Bride, president of the Chinese-Peruvian Chamber of Commerce (Capechi) indicated in August 2011 that Chinese investment in Peru isUS$1.2bn, but could increase to US$10bn in the next five years, driven by the strengthening of bilateral relations and Chinese investment in predominantly mining investments. This could have a positive flow on implications for the property market.
- The election of Ollanta Humala earlier in 2011 is broadly neutral for Peru’s outlook. He continues to pursue a moderate economic policy.
Executive Summary
SWOT Analysis
- Peru Real Estate/Construction SWOT
- Peru Economic SWOT
- Peru Business Environment SWOT
Real Estate Market Overview
- Real Estate Market Analysis
- Table: Peru’s Real Estate Market – Rental Costs, 2010 And 2011 (m2/month, US$)
- Table: Peru’s Real Estate Market – Net Yields, 2011 And 2012 (%)
- Table: Peru’s Real Estate Market –Terms Of Contract/Lease, Mid-2011
- Table: Peru’s Real Estate Market – Available (m2) And Vacant Space (%)
Industry Forecast Scenario
- Real Estate Outlook
- Table: Peru’s Real Estate Market – Rentals, 2010-2012 (m²/month, US$)
- Table: Peru’s Real Estate Market –Net Yields, 2008-2015 (%)
- Construction Industry Outlook
- Table: Peru Construction And Infrastructure Industry Data, 2007-2015
- Table: Peru Construction And Infrastructure Industry Data, 2012-2020
Macroeconomic Outlook
- Table: Peru – Economic Activity, 2008-2015
- Business Environment
- Peru’s Business Environment
- Table: BMI Business And Operation Risk Ratings
- Table: BMI’s Legal Framework Rating
- Table: Labour Force Quality
- Table: Annual Foreign Direct Investment Into Latin America, 2006-2008
- Table: BMI’s Trade And Investment Ratings
- Table: Peru’s Top Export Destinations, 2003-2009 (US$mn)
Competitive Landscape
- Company Profiles
- Abengoa
- Cemento Andino SA
- Cementos Lima
- Cementos Pacasmayo
- Centros Comerciales del Peru (CCPSA)
- Cosapi
- Graña y Montero (GyM)
- Inversiones Centenario
- Los Portales SA
- Negocios e Inmuebles SA
BMI Methodology
- How We Generate Our Industry Forecasts
- Construction Industry
- Bank Lending
- Sources
- Abengoa
- Cemento Andino SA
- Cementos Lima
- Cementos Pacasmayo-
- Centros Comerciales del Peru (CCPSA)
- Cosapi
- Graña y Montero (GyM)
- Inversiones Centenario
- Los Portales SA
- Negocios e Inmuebles SA,
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