RIO DE JANEIRO—Latin America continues to see growth in new projects and leasing activity, led by preparation in Brazil for the 2016 Olympic Games, as well as investors drawn to the emerging markets in the rest of South America and the Caribbean.
Hector Klerian, director of JLL Mexico, said at a recent World Economic Forum event that dynamic industry drivers, high levels of new supply and rising absorption will continue to boost the area's appeal.
"Latin America is the 'region of the future' with strong potential for growth and expansion, and the region's 3% to 4% GDP growth rate over the past several years looks strong in comparison with much of the rest of the world," he said. "Colombia, Argentina and Mexico are quickly gaining traction as up-and-coming destinations for those seeking the best returns on investment. There is a stark contrast by market; however, one common thread holds true for all three markets—if you're willing to take a little risk, the opportunities are endless."
In Rio de Janeiro, Houston-based Hines has been hired by Caixa to serve as real estate consultant for the massive two-squaremile Porto Maravilha docklands redevelopment here. The city is getting ready to host a number of global events, including the 2014 FIFA World Cup and the 2016 Olympic Games, and wants to rebuild its vacant dock front with new public and commercial buildings and better infrastructure.
The Urban Development of the Port Area Co. is leading the redevelopment in a public-private partnership. Caixa, Brazil's largest savings and loan bank, is a consultant to the Porto Maravilha REIT, an investment fund set up to finance the work.
Hines will also act as co-investor in private sector developments, including office towers, hotels, retail and residential projects, which will be funded through sales of building rights. The sale of these rights, which, for example, could include office or apartment development on top of an existing building, will go through the REIT to be used for urban renovation of the area. Buyers and owners also receive a tax reduction for new investment. The trust has a current investment of $2 billion.
Another massive project is planned for the Cayman Islands. St. Louis-based Ascension Health Alliance and Bangalore, India-based Narayana Hrudayalaya Hospitals have announced a joint plan to build a $2-billion healthcare development on the largest of the islands. The site is going to be called Health City. Narayana, which runs a complex of health centers in southern India, is led by chairman and managing director Dr. Devi Prasad Shetty, who has been working with Ascension president and CEO Anthony Tersigni for two years to create the project here.
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