Marktbericht Lateinamerika Jul09

As with any crisis, the global economic slowdown has unveiled new opportunities for some market participants.

Executive Summary

The global financial crisis continues to dampen growth in Latin America. While certain sectors are starting to recover, unemployment is still on the rise. The added impact of the H1N1 “swine flu” outbreak worsened the situation for some countries, albeit temporarily.
Soft global and domestic demand has left some manufacturers no choice but to decrease production and cut jobs. In an attempt to keep vacancies in check, some industrial landlords are reducing rents.
Central banks in the region have slashed interest rates to record lows, and governments have introduced stimulus measures to boost consumer sentiment and economic performance. Stock indices in the region rallied as investors turned their focus to the month-on-month improvements that begin to surface.
Commercial real estate fundamentals are suffering. Rents in the office sector are under pressure from additional space and lower demand. Depressed retail sales have discouraged contract renewals and prompted tenants to demand lower rents. However, retail sales and consumer confidence are showing signs of improvement.
Large housing development companies continue to shift their focus to low-income housing, as the sector remains at the center of government stimulus efforts designed to facilitate access to mortgage financing. Limited access to credit has led to consolidation among homebuilders.