Argentina Real Estate Report Q3 2010

Argentina's economy is in recovery, and is showing embryonic signs of improvement. However, the recovery will be limited by various constraining factors. We are forecasting a relatively sedate 2.2% average growth rate over the coming decade.

The economic downturn hit the real estate market. The low level of private investment spending was especially deleterious. Yet the real estate industry stands to gain from new government funding, including economic stimulus measures.

There has been a recovery in industrial activity, which is expected to increase demand for industrial space. There has also been a recovery in retail sales, which could lead to the construction of additional retail space. The improved economy and expected increasing tourism will increase demand in the residential market.

Residential property is likely to increase in value - in line with the improved economy and an expected increase in tourism (especially with Brazil's hosting of the World Cup in 2014, and then the Olympics in 2016).

Commercial rents in most areas are expected to stabilise or rise. However, a large amount of new commercial space has recently come online, and will continue to do so in the near term.

In-country sources were interviewed in early March 2010.

Key Features Of This Report

This is the latest edition of a new series of industry reports published by BMI that seeks to identify the key dynamics of the real estate sectors of 44 countries around the world, some of which are developed and some of which are, in every sense, emerging markets. Once again, the questions that we seek to answer for each country remain as follows: What are the main issues that will matter to actors in and around real estate development in the country concerned, both over the long and the short term? What are the main constraints that they face? What are the key insights that one garners when one compares the real estate sector of the country concerned with its peers in other countries?

For Q3 we have introduced a very substantial new improvement to the reports. We have incorporated data and qualitative observations provided to us by commercial real estate agents operating in the countries we survey. As a result we have gained a much clearer picture of the balance between demand and supply in each of three main sub-sectors - office, retail and industrial. We have also introduced a new approach to the forecasting of rental yields, which is discussed in the methodology sector of this report.