News

Key data: Latin American and Caribbean offices

News

Mark Cooper

06 October 2008

– Average GDP growth for Latin America hits 5.6% in 2007 – Demand for office space, and rents, rise steadily

Latin America and the Caribbean are becoming attractive office investment locations, according to Cushman & Wakefield’s latest Latin America Market Beat report. “Although it is true that, measured in terms of economic growth, increasing foreign direct investment and export volumes, growth in the region is not as exuberant as that experienced in Asia, numerous important developments are underway,” the report says.

Average GDP growth for the main economies in Latin America rose by 5.6% in 2007 and should reach 4.5% in 2008. This was the fourth consecutive year of strong growth. Per capita GDP was up 18% compared to 2003 (averaging $5,832), and the average purchasing power increased by 22%.

C&W’s Latin America chief executive, Celina Antunes, says: “Among the economic drivers important to the region are democratic governments and public finance, the emergence of private pension funds and multinational activity, in particular telecommunications.

“Another factor is solid internal policies deployed in the region in recent years. The financial crisis in the US seems not to have affected Latin America and Caribbean countries, which still have substantial currency reserves.”

The market for office space in Latin America is concentrated in Brazil, Mexico, Chile, Colombia, Argentina, Venezuela, Peru, Ecuador, Costa Rica and Uruguay, totalling 32m m² of usable office space, 10.3m m2 of which in class A buildings.

Office space in the main cities in Latin America accounts for 9.1% of the total inventory in the Americas and 4.4% of the world inventory. But demand for office space and rental rates in Latin America have grown steadily.

In 2007, new stock of 400,000m² was delivered in class A buildings, while take-up was 624,000 m2. By the end of 2009, total inventory in class A office buildings should increase by more than 10% and asking rents are expected to go up an average of 8%.

By the end of 2007, the average vacancy rate in class A buildings was just 3.9%, down from 5.9% in 2006. The steepest drops in class A vacancy rates were in Lima, Peru and São Paulo, Brazil, which dropped by 8 and 4.7 percentage points respectively.

Demand has driven up asking rents in class A buildings by 29% in US dollar terms, closing 2007 at $27.76 per m². The largest rises were in Rio de Janeiro and São Paulo, Brazil, and Buenos Aires, Argentina.

– Average GDP growth for Latin America hits 5.6% in 2007 – Demand for office space, and rents, rise steadily Latin America and the Caribbean are becoming attractive office investment locations, according to Cushman & Wakefield’s latest Latin America Market Beat report. “Although it is true that, measured in terms of economic growth, increasing foreign direct investment and export volumes, growth in the region is not as exuberant as that experienced in Asia, numerous important developments are underway,” the report says.Average GDP growth for the main economies in Latin America rose by 5.6% in 2007 and should reach 4.5% in 2008. This was the fourth consecutive year of strong growth. Per capita GDP was up 18% compared to 2003 (averaging $5,832), and the average purchasing power increased by 22%. C&W’s Latin America chief executive, Celina Antunes, says: “Among the economic drivers important to the region are democratic governments and public finance, the emergence of private pension funds and multinational activity, in particular telecommunications. “Another factor is solid internal policies deployed in the region in recent years. The financial crisis in the US seems not to have affected Latin America and Caribbean countries, which still have substantial currency reserves.”The market for office space in Latin America is concentrated in Brazil, Mexico, Chile, Colombia, Argentina, Venezuela, Peru, Ecuador, Costa Rica and Uruguay, totalling 32m m² of usable office space, 10.3m m2 of which in class A buildings. Office space in the main cities in Latin America accounts for 9.1% of the total inventory in the Americas and 4.4% of the world inventory. But demand for office space and rental rates in Latin America have grown steadily. In 2007, new stock of 400,000m² was delivered in class A buildings, while take-up was 624,000 m2. By the end of 2009, total inventory in class A office buildings should increase by more than 10% and asking rents are expected to go up an average of 8%.By the end of 2007, the average vacancy rate in class A buildings was just 3.9%, down from 5.9% in 2006. The steepest drops in class A vacancy rates were in Lima, Peru and São Paulo, Brazil, which dropped by 8 and 4.7 percentage points respectively. Demand has driven up asking rents in class A buildings by 29% in US dollar terms, closing 2007 at $27.76 per m². The largest rises were in Rio de Janeiro and São Paulo, Brazil, and Buenos Aires, Argentina.