Business Monitor International


Venezuela Real Estate Report

Published 23 July 2014

  • 53 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Venezuela Real Estate Report

BMI View:   The short-term outlook for Venezuela's commercial real estate sector is bleak, as government policy, high inflation, exchange rate issues and lack of investment continue to afflict the sector. However, in the long term there is considerable potential, and should the business environment improve, we would expect Venezuela to become an increasingly attractive destination for real estate investment.

The commercial real estate sector is characterised by extremely low supply, which is offsetting growing caution among potential tenants so that demand remains high for the space that is available. The uncertain business environment, as a result of the government's anti-private business stance, the threat of appropriations and the difficulties in accessing hard currency, mean that investment in commercial real estate in Venezuela has been and will continue to be, limited.

Meanwhile, inflation continues to be high, artificially inflating rental rates and reducing consumers' purchasing power. The government has imposed a cap on commercial rental rates but this will not solve the underlying problem of high inflation and indeed will detract from further investment in the sector.

We expect the government of President Nicolás Maduro to continue its policy course and thus see no improvement to the commercial real estate sector's prospects in the short term. However, in the long term there could well be considerable opportunities. The number of middle class Venezuelans is rising and will create a group keen to spend on Western-style retail, as well as creating a larger market for Venezuelan goods. Meanwhile, the country's petrol wealth could, were the government to be more business-friendly, attract significant investment into the wider economy.

Key BMI Forecasts

  • We see no change in office rental rates in 2014 and 2015, with the highest rents continuing to be in the capital, Caracas, at a minimum of USD20/square metres a month and a maximum of USD66.

  • We...

Table of Contents

BMI Industry View
7
SWOT
8
Political
10
Economic
11
Business Environment
12
Industry Forecast
13
Office
14
Table: Forecast Office Rents, 2014-2015 (USD/sq m/month)
14
Table: Forecast Short-Term Office Net Yields, 2014-2015 (%)
14
Retail
15
Table: Forecast Retail Rents, 2014-2015 (USD/sq m/month)
15
Table: Forecast Short-Term Retail Net Yields, 2014-2015 (%)
16
Table: Forecast Long-Term Retail Net Yields, 2011-2018 (%)
16
Industrial
16
Table: Forecast Industrial Rents, 2014-2015 (USD/sq m/month)
17
Table: Forecast Short-Term Industrial Net Yields, 2014-2015 (%)
17
Table: Forecast Long-Term Industrial Net Yields, 2011-2018 (%)
17
Macroeconomic Forecasts
18
Table: Venezuela - Economic Activity
23
Industry Risk Reward Ratings
24
Latin America - Risk/Reward Ratings
24
Table: Latin America Real Estate Risk/Reward Ratings
24
Venezuela - Risk/Reward Ratings
24
Rewards
24
Risks
25
Market Overview
27
Office
29
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
29
Table: Net Yields, 2012-2014 (%)
30
Table: Terms Of Rental Contract/Lease, 2013
30
Retail
30
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
32
Table: Net Yields, 2012-2014 (%)
32
Table: Terms Of Rental Contract/Lease, H213
33
Industrial
33
Table: Terms Of Rental Contract/Lease, H213
34
Table: Historical Net Yields, 2012-2014 (%)
34
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
35
Competitive Landscape
36
Retail
36
Office
36
Industrial
37
Company Profile
38
Oriente EICI
38
Otepi
40
Tecnoconsult
43
Vepica
45
Demographic Forecast
47
Table: Venezuela's Population By Age Group, 1990-2020 ('000)
48
Table: Venezuela's Population By Age Group, 1990-2020 (% of total)
49
Table: Venezuela's Key Population Ratios, 1990-2020
50
Table: Venezuela's Rural And Urban Population, 1990-2020
50
Methodology
51
Industry Forecast Methodology
51
Sources
52
Risk/Reward Ratings Methodology
52
Table: Real Estate Risk/Reward Ratings Indicators
54
Table: Weighting Of Indicators
55

The Venezuela Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Venezuela Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Venezuela.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Venezuela to test other views - a key input for successful budgeting and strategic business planning in the Venezuelan real estate market.
  • Target business opportunities and risks in Venezuela through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2018 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Rankings

BMI's Real Estate Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc