Business Monitor International


Venezuela Real Estate Report

Published 17 October 2014

  • 53 pages
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$1,295.00
Venezuela Real Estate Report

BMI View:     Uncertainty has become an ongoing theme within the Venezuelan real estate sector. Unfavourable government policies, stubbornly high levels of inflation and exchange rate issues have deterred much needed investment in the sector. The country's economy, however, possesses great potential, which we believe will create attractive opportunities for real estate in the long run.

Venezuela's limited construction pipeline has created a market that is extremely low in supply. This in effect has offset the growing caution amongst potential tenants so that demand remains high for what space that is still available. The government's populist policies continue to create a business environment that is inherently anti-private business and this has encouraged domestic and overseas investors to look elsewhere.

Meanwhile, inflation has climbed so high that the central bank has decided to stop reporting regular statistics. This has artificially inflated rental rates and reduced 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 will detract from further investment in the sector.

We anticipate President Nicolás Maduro to continue his government's policy course and therefore expect no improvements in the commercial real estate sector during the short term. Venezuela's economy does, however, hold substantial potential with a rising middle class that is keen to spend on Western-style retail which offers considerable opportunities for this subsector in the long run. Furthermore, the country's oil supply can be utilized as a means to attract greater investment into not only the real estate sector but also 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 likewise see no change in...

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
Table: Forecast Long-Term Office Net Yields, 2011-2018 (%)
15
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
Construction and Infrastructure Forecast Scenario
18
Table: Construction And Infrastructure Industry Data (Venezuela 2012-2017)
18
Table: Construction And Infrastructure Industry Data (Venezuela 2018-2023)
19
Macroeconomic Forecast
26
Table: Economic Activity (Venezuela 2009-2018)
30
Industry Risk Reward Ratings
31
Latin America - Risk/Reward Ratings
31
Table: Latin America Real Estate Risk/Reward Ratings
31
Venezuela - Risk/Reward Ratings
31
Rewards
31
Risks
32
Market Overview
34
Office
36
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
36
Table: Net Yields, 2012-2014 (%)
37
Table: Terms Of Rental Contract/Lease, 2013
37
Retail
37
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
39
Table: Net Yields, 2012-2014 (%)
39
Table: Terms Of Rental Contract/Lease, H213
40
Industrial
40
Table: Terms Of Rental Contract/Lease, H213
41
Table: Historical Net Yields, 2012-2014 (%)
41
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month)
42
Competitive Landscape
43
Retail
43
Office
43
Industrial
44
Company Profile
45
Oriente EICI
45
Otepi
47
Tecnoconsult
50
Vepica
52
Demographic Forecast
54
Table: Venezuela's Population By Age Group, 1990-2020 ('000)
55
Table: Venezuela's Population By Age Group, 1990-2020 (% of total)
56
Table: Venezuela's Key Population Ratios, 1990-2020
57
Table: Venezuela's Rural And Urban Population, 1990-2020
57
Methodology
58
Industry Forecast Methodology
58
Sources
59
Risk/Reward Ratings Methodology
60
Table: Real Estate Risk/Reward Ratings Indicators
61
Table: Weighting Of Indicators
62

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