2012 Global Market report - NAI Global

thereof). Slowed real estate activity during Q2 2011 was quite strong overall, with rent
and sale prices increasing by about 8%. For 2012, rental and sale activity should remain
strong in all sectors, especially retail. Numerous retail projects are under construction
and will be available in 2012, with many already significantly pre-leased. In the Lima office
market, demand should remain active and vacancy rates are not expected to drop as
new office product is delivered. Due to the expansion of the city’s core, industrial
development is being pushed further out beyond the residential and commercial areas,
primarily to Huachipa in the East zone, Lurin and Chilca in South Lima; and Ventanilla in
West Lima.
Venezuela. 2011 proved to be a difficult year again for Venezuela as the Chavez
administration’s macro and microeconomic policies continued to chastise the domestic
companies and markets. Additionally, lower oil prices and falling production reduced the
government’s revenues, as the petroleum industry remains the most important and
profitable economic engine. 2012 will continue to be difficult with shortages expected in
many sectors, due to the administration’s nationalization of numerous companies and
its continued threats to strategic industries, such as food processing and agriculture.
Except for activity from political bedfellows such as Iran, China, Libya and Russia, there
is virtually no new foreign investment in Venezuela outside of the petroleum industry, as
the country’s administration and policy environment hamper recovery.
Vacancy rates are still near zero in the office, industrial and retail sectors, and rental rates
are rising sharply due to high inflation rates and artificially low dollar-to-bolivar currency
exchange rates. Landlords determine sale and rental rates based on the US dollar.
Although investors and developers remain extremely cautious due to the lack of
transparency and political risks, there is some new development and investment in real
estate, particularly in retail. Firms operating in Venezuela cannot expatriate their earnings
at a realistic dollar value, and are therefore looking for an alternative way to protect the
value of their capital, which could bode well for commercial property markets.
2012 Global Market Report n www.naiglobal.com
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