Marktbericht Lateinamerika Jul10

Latin America’s economies are growing, with distinct drivers in each country.

Executive Summary

• Latin American economies rebounded in the first half following their poor 2009 performance, with the recovery highlighting the distinct drivers in each country. In the property markets, improved confidence and recovering demand is evident, although transaction activity remains anemic.
  
• Increased demand from abroad has led to steep gains in the manufacturing sector, driving the recovery in Mexico. The gains in production have created a need for more industrial space, although new construction activity remains weak.
  
• Latin America’s retail sector is benefiting from lower unemployment, strong domestic demand, expanding access to consumer credit and the improved buying power of the middle class. Retail developers in Mexico are starting to see more demand among smaller tenants in Mexico for the first time since the onset of the global credit crisis. In Brazil, strong domestic demand is supporting the delivery of new shopping centers.
  
• Mexican and Brazilian homebuilders remain focused on the low-income segment, although a recent expansion in bank credit to housing in Mexico should serve to benefit the mid- to high-income sectors. The rapid expansion in Brazil’s residential market has given way to new merger and acquisition opportunities among local homebuilders.