Rodrigo Abbud

(LONDON, ENGLAND) -- The hottest turf in the world today for commercial real estate investment is in Latin America.  The coolest sites are in the U.S., Mexico and Canada.

That's the fourth quarter 2009 assessment from the Royal Institution of Chartered Surveyors in London.

Here is what the RICS data highlight:

• Commercial property transactions rose across the globe in 2009.

• Brazil, Venezuela, Argentina, Peru and Chile are the most upbeat market sites.

• Canada, Mexico and the U.S. show the least positive outlooks.

• Tenant demand in Brazil is still high even after a record low vacancy rate in 2008.

• Investors like Brazil's low interest rates and relatively high yields

• Deal level in 2009 in Brazil was lower due to lack of supply, rather than shortage of capital.

• Fractional ownership, rather than purchase of an entire building, is the preferred mode in many Latin American markets.

• Stabilized rents in Mexico in the second quarter will see increased demand for industrial and retail properties.

• Sellers in the U.S. are still unwilling to lower prices to current market values.

• Weak job creation in the U.S. is hampering new commercial development.

"Vacancy has increased to 6.6 percent after reaching 5.5 percent in 2008," says RICS member Rodrigo Abbud of Equity Capital in Sao Paulo.

"Investors are always seeking good opportunities in Brazil. This market was developed on a condominium format, with fractional ownership, which makes it difficult to buy entire buildings.

'For 2010, the market has started hot. Tenants and investors are looking at projects under construction."

Further north, there may be glimmers of recovery.

Oscar J. Franck

"Mexico will see rents stabilized by the end of Q2 as demand for industrial and retail space increases triggered by the recovery," says RICS member Oscar J. Franck, managing director, IRR de Mexico.

"Mexico's economy is tied to the economic behavior of its northern neighbor. It would not be a surprise to find rents and yearly increases going back to previous levels by early 2011."

In the United States, property professionals are showing caution and patience, according to RICS member Stephen T. Crosson, of Crosson-Dannis Inc. in Dallas.

"The market for all types of commercial property remains in a state of uncertainty, due in large part to unwillingness of sellers to mark to market," Crosson says.

Stephen T. Crosson

"Banks continue to demonstrate a preference to restructure rather than to pursue default remedies and fundamental demand drivers, such as job creation, remain weak. Significant improvement is unlikely until the market clears."

"Our membership anticipates hot spots and Brazil and its neighbors are inspiring attention," says  Matt Bruck, managing director, RICS Americas.

"Our RICS Latin America Working Group is expanding activities in the region in anticipation of growing need for standards, guidance and trained professionals."

Matt Bruck

The Royal Institution of Chartered Surveyors),  headquartered  in London, is the leading organization of its kind in the world for more than 100,000 professionals in property, land, construction and related environmental issues.

RICS Americas, based in New York and covering North, Central and South America and the Caribbean, has more than 2,200 members in commercial and residential development, construction and project management, brokerage, planning and finance, valuation and fine arts appraisal.

---

Click Here To See Prior News Posts By This Contributor »