Chile Real Estate Report Q4 2013
Published by Business Monitor International
on Jul 25, 2013
, 57 pages
PDF - Download Now with 3 Quarterly Updates format - Download Now
Chile has long been one of the jewels in the South American crown in terms of a dynamic economy, abundance of resources and consistent growth. These strong fundamentals and a resilient leasing market make Chile a strong and dependable performer in the commercial real estate sector. Lead indicators suggest that construction and pipeline growth is expected to continue at a strong rate.. However, given the growth rates in 2012, base effects will likely result in a lower growth figure over 2013, as we anticipate that the rental market will remain flat across all sub-sectors.
With a focus on the principal cities of Santiago and Valdivia, the report covers the office, retail, industrial and construction segments, examining how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the dynamic supply and demand landscape. In spite of new supply, absorption rates are generally holding up across the board, with record amounts of office space set to come online over 2013-14. In fact, an anticipated broader slowdown in pipeline activity in the medium term spells good news for the leasing market - particularly in the office and retail sub sectors - as new supply decreases and demand remains relatively buoyant, the competition for prime space in prime locations may well boost rental rates in the medium term.
Nevertheless, abundant demand and supply is the general trend across all commercial real estate subsectors, and as a result the commercial real estate market is expected to continue to blossom. The country's status as Latin America's most prosperous region has helped it retain stability and caused it to become a target destination for people looking to enter into a more predictable market than the eurozone in particular. However, even in Chile - where growth over the past two years has been strong in the office, retail and industrial sub-sectors - current global economic woes may yet take their toll. Rental growth is likely to be much slower in 2013, or to come to a halt altogether according to our in country sources. This is unsurprising in the face of a cautious market for international investment, and it is still a testament to the country's stability that no contraction is expected.