Chile's economic growth is set to slow in 2014, on the back of declining demand for a key export commodity, copper, in China. Chile will be affected by rising unemployment and falling consumption and investment. However, over the longer term the economy should benefit from a growing export base, with increased investment into manufacturing, as well as the increasing spending power and urbanisation of the population, which should boost demand for commercial real estate as a whole.
In the short term the office sub-sector is set to suffer the effects of oversupply. A significant pipeline of new space in Santiago in the recent past and going into 2015 will create a more tenant-favourable environment, potentially pushing rental rates down. Our in-country sources note that grade B office space has suffered the largest rises in vacancy rates, as firms feel able to upgrade to class A space.
We have an optimistic outlook for Chile's retail sector. Household incomes and consumer spending are set to rise, boosting demand for Western-style modern retail across the country. The retail market in Santiago is saturated, and we are thus seeing a trend of retailers, and developers, moving to take advantage of untapped potential in other areas of the country. Leading Chilean retailers have significant expansion plans in the country, and international retailers, meanwhile, are increasingly seeking to invest in Chile.
The industrial market is the one for which we see the best potential growth, from a lower base than the other two...
The Chile Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Chile Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Chile.Key Benefits
CoverageBMI Industry View
- Benchmark BMI's independent real estate industry forecasts for Chile to test other views - a key input for successful budgeting and strategic business planning in the Chilean real estate market.
- Target business opportunities and risks in Chile through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.Market Overview
Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.Market Analysis
Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.Industry Forecast Scenario
Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:
Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)
Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)
Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)Business Environment Rankings
BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.
The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.Company Profiles
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.
The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
We are optimistic on the outlook for the Chilean commercial real estate market. Although the short-term economic outlook may mean a slowdown in the sector's growth, we see significant opportunities in the longer term, particularly in the retail and industrial sub-sectors and outside the capital city. Growth will be buoyed by rising consumption and investment, while downside risks stem from oversupply in some sub-sectors and notably in Santiago.