New Business market report from Business Monitor International: "Venezuela Real Estate Report Q2 2014"
Boston, MA -- (SBWIRE) -- 04/29/2014 -- Venezuela's commercial real estate sector is set for continued turbulence over 2014. Several opposing factors, including the devaluation of the bolivar, a lack of new supply of commercial real estate, external macroeconomic headwinds and a deteriorating political environment will affect the sector. Office rental rates in the capital, Caracas, rose 80% year-on-year (y-o-y) in the first half of 2013 to USD150 per square metre (sq m) per month. The increase has been attributed to the devaluation of the Venezuelan bolivar, which has made the country's office rental market the most expensive in Latin America. Many businesses are now reported to be keen to purchase their offices, or are considering alternative locations. Comparative space elsewhere in Latin America cost between USD20 and USD35 per sq m, according to Jones Lang LaSalle.
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The bolivar's depreciation, in conjunction with the government's H113 introduction of a dual exchange rate system, will have a tangible effect on the commercial real estate sector by curtailing business activity. There is some uncertainty in the market as a whole as to what effect the currency depreciation will have on rental levels, as landlords could choose to raise rents in bolivar terms in order to offset the loss in value relative to the dollar.
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