The Real Deal Miami

Latin American investors see 2016 as the year to buy: report

U.S. apartments and condos were strong draws for Latin American investors

May 02, 2016 01:30PM

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Earth (Credit: NASA)

Earth (Credit: NASA)

It might be tumultuous times for many Latin American countries, but a new survey shows real estate investors there are sensing opportunity.

The survey, sent out by brokerage CBRE, found that 81 percent of Latin American investors who responded plan on buying more properties than what they sell during 2016.

That percentage is even higher than the respondents’ counterparts in North America, about 65 percent of which planned on being net-buyers this year.

One of the main motivations for this buy-side shift was the expectation that property values are going to rise. Roughly 38 percent cited returns on investment as their main motivation, followed by 29 percent who wanted steady rental incomes from their acquisitions.

Another 30 percent was spread evenly between diversifying assets, hedging against inflation and seeking attractive yields compared to other assets.

As for where these investors want to spend their cash, 29 percent of respondents said Brazil was the best place to be. Chile wasn’t far behind with 23 percent, with Mexico trailing at 13 percent and Argentina showing a measly 6 percent. Colombia and Peru tied, with 3 percent of respondents saying said those countries were the best places to invest.

Offices were the biggest draw as 35 percent of investors surveyed said those properties were the best asset to purchase. Retail was the second-most attractive asset type at 26 percent, followed by industrial at 16 percent, hotels at 13 percent and multifamily with 10 percent.

While Latin American investors typically favor buying within South America, the U.S. is a close second, according to the survey. Roughly 23 percent of respondents said the U.S. was the most attractive region for real estate investment this year — with New York City and Florida cited as particularly appealing locales.

Their choice of properties in the U.S. was a fairly even spread, according to the survey: Latin Americans seem confident in the U.S. multifamily market as 28 percent said those properties were the most attractive investment option this year. Offices weren’t far behind with 24 percent, followed by industrial at 23 percent and retail at 17 percent. Hotels, however, seem to be viewed as risky options: only 3 percent of respondents favored leisure properties above the others for investment. — Sean Stewart-Muniz