Recent Study: Peru Real Estate Report Q4 2013

The Peru Real Estate Report examines the commercial office, retail, industrial and construction segments throughout the country in the context of increased risk across political, economic and security spheres. With a focus on the principal cities of Lima and Arequipa, the report covers rental market performance in terms of rates and yields and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of strong economic growth and rising demand. Our growth outlook for Peru's commercial real estate sector over the next few years remains relatively strong, owing to robust infrastructure and mining sector project pipelines and a growing consumer story. Construction has proved particularly resilient since a dip in activity in mid-2011, but the headline grabbing news for the Peruvian real estate sector is the office sector in Lima, which in Q113 was reported to have one of the lowest vacancy rates in the world.

Full Report Details at
- http://www.fastmr.com/prod/712814_peru_real_estate_report_q4_2013.aspx?afid=303

Key Points:

* We estimate real growth in the construction sector over 2012 reached 12.0% year-on-year; a sharp uptick from 2011's 3.4%. Specifically, investment has been seen in the mining sector, as well as infrastructure and housing projects, lifting industry value across all sub-sectors (specifically infrastructure and residential/non-residential). There is an active pipeline for 2013, particularly in the residential, retail and office segments, with the latter anticipated to double its gross leasable area in Lima alone by 2015.
* Following robust real GDP growth of 6.3% in 2012, we forecast growth in Peru to slow to 5.4% in 2013. Although we believe economic activity will remain relatively strong in H113, we expect that both moderating external demand and the end of several infrastructure stimulus measures will result in a notable deceleration in growth in the latter half of the year, underpinning our below-consensus forecast.

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