Recently published research from Business Monitor International, "Argentina Real Estate Report Q1 2014", is now available at Fast Market Research

Boston, MA -- (SBWire) -- 01/06/2014 --Declining construction growth and macroeconomic headwinds, combined with questionable economic measures put in place by the Argentina government, are having a detrimental effect on the country's commercial real estate sector. Construction industry growth will not enter positive territory until at least 2016; however, there are projects in the pipeline that give us hope the sector can recover. Office space is a particular bright spot, especially in Cordoba and Buenos Aires, which is keeping the real estate sector afloat. Overall, however, opportunities for growth are limited and will be continue to be so until the economy picks up.

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Growth in the commercial real estate segment is predicated upon a healthy macroeconomic environment. Argentina's real estate sector has been the victim of sluggish growth in this regard, with real GDP growth set to come in at just 2.9% in 2014. High inflation, which is privately estimated to be at 25%, is also weighing down the economy. Construction industry growth entered negative territory in 2012 and is not expected to post positive results until 2016, although it will be some time before the sector truly recovers from four years of contraction. Additionally, the country has been impacted by the economic policies enacted by the government, particularly the decision to ban the use of US dollars in property transactions. Signs of weakness are beginning to emerge - particularly in the industrial sector - and the impressive growth in the real estate segment previously witnessed looks set to grind to a halt. However, there are bright spots, which come in form of the high-end retail segment and office space in Buenos Aires and Cordoba.

Key Points:

- Our view for a sharp slowdown in the Argentine construction sector played out over 2013, with a contraction of 2.6% anticipated. This decline will grow even more pronounced in 2014, when a further contraction of 2.7% is anticipated.
- Industrial construction is bearing the brunt of this slowdown, with net yields expected to be sluggish until the end of the forecast period. However, there are a few projects in the pipeline, which will provide some growth and stabilising the sector to a degree.
- 2014 will see a marginal improvement, with growth of 2.9%, but we believe over the longer term there are significant downside risks to Argentina's growth picture, as long-building imbalances both in the domestic economy and in the external accounts persist.

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