Marktbericht Lateinamerika Apr10

During the first quarter, the positive performance of Latin American economies further confirmed that a regional recovery is well underway.

Executive Summary

• An economic recovery is underway in Latin America, although the pace and pattern varies widely among countries. While activity in property markets is gradually increasing, it will not gain full strength until later this year. Transaction volume is expected to pick up in the second quarter.
  
• Capital markets in Latin America rallied in 1Q10 on positive global economic news and improving investor sentiment. Foreign direct investment in Latin America is expected to increase this year as multinational corporations take advantage of the recovery in the region and expand their local operations.
  
• Buoyed by the improving landscape in local and global economies, industrial companies in the region are gradually resuming expansion plans. For example, auto production is increasing rapidly in both Mexico and Brazil due to growing demand in local and external markets.
  
• Latin America’s retail sector is being enhanced by the stronger employment market, expanding access to consumer credit and the growing buying power of the middle class. Mexico is seeing signs of stabilization in rents and vacancies in more mature markets, although transaction activity remains slow.
  
• New housing supply is increasing in Mexico for the first time since the onset of the credit crisis, reflecting greater confidence among local construction companies. Supply is expanding particularly fast in Brazil, where the government has doubled the size of the Minha Casa Minha Vida housing program.