Boston, MA -- (SBWIRE) -- 07/27/2012 -- The Argentina Real Estate report examines the Commercial Office, Retail, Industrial and Construction segments throughout the country in the context of our deteriorating economic outlook and an uneasy investment landscape for the Latin American nation.
With a focus on the principal cities of Buenos Aires, Cordoba and La Plata, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the government financing restrictions on a market already expected to slow over the year.
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Construction contributes around 5% of Argentina's GDP, a percentage that is set to increase only marginally in future. But the construction segment holds promise, despite 2011's growth figure coming in lower than in 2010. As for the broader real estate market, 2011 witnessed marginal stabilisation of yields and rents, with minimal new developments under way. Our most recent round of in-country interviews, conducted in December 2011, has revealed that political issues and a potential for recession in the economy have constrained any major activity in the office, retail or industrial real estate markets.
Despite Argentina's resilience to global headwinds in 2011, we continue to expect a slowdown in GDP growth in 2012, due to a moderation in private consumption and fixed investment. From our estimate of 7.0% in 2011, we expect that moderating commodity prices and a deterioration in domestic demand will weigh heavily on Argentina's real GDP growth in 2012. The protectionist policies recently implemented by President Cristina Fernandez's administration will have a negative impact on private consumption, fixed investment and export growth, acting as a drag on the economy. As a result, we have revised down our 2012 forecast for Argentina's real GDP growth to 4.0%, from 5.3% previously.
- The government's US dollar purchasing restrictions could affect all the potential opportunities in the market, as players stall their activities to see what the outcome of the government's decision will be.
- We reiterate our view that the Argentine government will continue to implement only temporary fixes to the country's macroeconomic imbalances.
- Construction industry value is forecast to reach US$27.7bn in 2012, with year-on-year growth of 3.3%.
- We have revised down our 2012 forecast for Argentina's real GDP growth to 4.0%, from 5.3% previously.
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