Buenos Aires, Lima, and Santiago.
Bogotá, Buenos Aires, Lima, and Santiago, according to a new Jones Lang LaSalle hotel investment survey, emerge as key strategic markets for Latin America in 2011. buy and sell qatar
FocusOn: Strategic Spots for South American Hotel Investment, a Jones Lang LaSalle Hotels proprietary research study, identifies four of the most promising South American hotel investment destinations. The list was created based on the market's solid demand fundamentals and the potential for investment-grade branded supply. Although Brazil, by far the largest economy and most populated country in South America, provides the most diverse range of growth opportunities, a number of cities in other countries, including those outside of Brazil, have good demand fundamentals and a favorable investment climate, resulting in real estate opportunities.
"Bogotá, Colombia; Buenos Aires, Argentina; Lima, Peru; and Santiago, Chile are four of the main markets," said Ricardo Mader, executive vice president of Jones Lang LaSalle Hotels in So Paulo. "Through 2015, real GDP in these countries is expected to rise at a compound annual growth rate of 4% or more, far above growth rate expectations for most mature markets."
Because of the country's relatively sophisticated capital markets, Santiago has become a preferred destination for hotel investment. Santiago has often served as a test market for foreign brands entering South America. As a result, of the four cities in the study, it has the most international-grade, four- and five-star hotel rooms.
Santiago's demand will continue to support opportunities for the construction of new hotels in the long run due to the country's stability and growth prospects."
The most sought-after areas for hotel construction are currently Las Condes and El Bosque. Since the city's luxury segment is well-served, the main opportunities in Santiago are to build both limited service and upscale hotels, or to make strategic acquisitions and conversions to gain a foothold "Mader said.
After So Paulo, Buenos Aires is the second largest metropolitan area in South America. "Despite substantial performance declines in 2009, visitation patterns and economic fundamentals are rebounding, and investors continue to pursue investments in Buenos Aires on a selective basis," said Clay Dickinson, executive vice president of Jones Lang LaSalle Hotels.
There are 14 hotels in the city with institutional-grade, four- and five-star accommodations, totaling approximately 3,200 rooms. "With the opening of approximately five new hotels, this hotel segment is projected to expand to 3,800 rooms by 2014," Dickinson said. The limited initial base of rooms would help prevent an oversupply from developing in this production pipeline. "The continued appeal of Buenos Aires as South America's preeminent tourist destination is expected to yield respectable operating results for current and new hotel supply," Dickinson said.
The demand for hotels in Bogotá, Colombia's main gateway and distribution center for tourism within the region, is increasing. Colombia is on the verge of regaining its footing. According to Cotelco, RevPAR at Bogotá hotels increased by 4% year-to-date in July 2010 compared to the same time the previous year.
Owing to the country's previous political turmoil, unlike So Paulo and Santiago, Bogotá has not seen a large amount of hotel development in the last 15 years. "With the arrival of some new hotels, this has now changed. Furthermore, between now and 2012, the stock of institutional-grade, four- and five-star hotels is projected to increase by 37%, presenting a plethora of investment opportunities, including possible conversions and management contracts "Dickinson said.
Lima has seen less international hotel growth than Buenos Aires and Santiago, and the industry also lacks the breadth of international hotel brands found in those cities. "Only three institutional-grade four- and five-star hotels are scheduled to open in the region of nearly nine million people over the next three years. Since the city is not experiencing a surge in new supply, growth in operating fundamentals is expected to be maintained over the medium term "Liliana Ribeiro, vice president of Jones Lang LaSalle Hotels in So Paulo, shared her thoughts.
There are still market opportunities for the construction of new hotels across all categories in Lima, as the city's economy continues to expand. "There is almost no presence of premium branded select service hotels in Lima, and this remains an investment opportunity," Ribeiro said.
Domestic and foreign hotel investors should keep Bogotá, Buenos Aires, Lima, and Santiago on their radars as economic and demographic developments in the cities continue to improve, resulting in a variety of exciting hotel investment opportunities.