Top headlines and news impacting Latin America, Africa and Southeast Asia commercial real estate.
The bankrupt Casino Group has previously rejected offers considered insufficient from Colombian Jaime Gilinski . The Salvadoran company has been around for 63 years and has 6,000 employees and 90 stores. Exito was recently listed in Brazil and America, and this offer is for $1.2 billion representing a 40% premium from those prices. Exito had revenues of $10.6 billion last year and is the largest shopping mall owner in the country. Price seems low, some are expecting more suitors and bids.
Eduardo Elsztain’s main real estate holding vehicle is Cresud, and his 37% stake is worth about $140 million. He says things have gotten so bad that in 40 years the candidates for President are the most pro-market he’s ever seen. Milei is the frontrunner and aims to dollarize and shutter the central bank. His closest competitor is Patricia Bullrich, a star from the market-friendly opposition coalition. Argentina has a massive pipeline of stalled CRE projects.
It has superb geographic attributes and advantages, fertile and arable land, strong economic and cultural ties to Europe, impressive population demographics, and is packed to the gills with the resources the world wants.
From 2018 to 2022 MX$ 9 billion has been invested through Mexican crowdfunding platforms to purchase real estate. Last year, the number of crowdfunding investors for the sector increased 40% to 800k registered investment accounts. Many are Mexican investors looking to own property in America, particularly in Texas. Others excited to own property in Mexico, particularly retail investors convinced about nearshoring’s potential.
Short-term rentals in Mexico City have leapt 17.5% since January from 14,118 to 16,590 listings on Airbnb. Nearly 100% of the new listings were entire homes and apartments. Regulation of the sector is likely given the push back from locals over gentrification caused by digital nomads flocking to the “hot” city.
Oasis Capital Ghana exited its 2017 Legacy Girls College investment, the fund’s first compete exit from the $50.5 Oasis Africa Fund I.
Equites (EQUIJ.J) is a JSE listed logistics-focused property firm and plans to invest more than $7 million over the next 36 months boosting solar capacity to diversity its revenue stream. South Africa is plagued with widespread power delivery issues (i.e., load-shedding) making off-grid power investments more attractive.
The IFC has announced the $35 million debt investment into the $70 million shopping mall project, implying an LTV of 50%. $17.5 million of debt will come from the IFC, the remaining from another debt provider. Inzovu Mall will be a 40,000 m² (i.e., 430k ft²) GLA structure in Kigali close to the convention center and will also contain apartments, offices and a hotel.
Controversial businessman in Zambia, Diego Casilli, has taken control of the first listed real estate company in Zambia. The previous management structure was not optimal and bogged down the ability of management to effectively manage the portfolio. The move will increase fees to Diego’s external management company and access to public capital markets in the country.
Vietnam’s primary advantage is that it borders southern China. It has benefited as an obvious alternative for foreign suppliers wishing to ease out of China, and for Chinese manufacturers to establish ancillary operations. The government is investing to expand its road network with 14 new routes under construction. The railway network is extensive with 277 stations with two routes into China. Its ports are receiving investment and two container ports are ranked in the top 50 in the world. Vietnam is beginning to ship directly to America for the first time putting it in direct competition with Dubai, Hong Kong, Singapore and Shanghai.
Proton, a Malaysian national carmaker owned 49.9% by Chinese partner Geely, is exploring establishing an automobile assembly facility in Thailand. Thailand offers subsidies to manufacturers for each electric car manufactured in the country. Investment quantum and timelines have not been agreed or announced.
The region has a growing number of high-net-worth consumers on the back of solid economic progress. Singapore was selected in March for trunk shows from LVMH, owned by Louis Vuitton and Bulgari. Bangkok recently hosted a Louis Vuitton men’s Autumn/Winter 2022 spin-off show. Saigon, Vietnam’s most populace city, hosted a VIP Gucci Spring/Summer Love Parade collection.
Southeast Asia real estate is popular for Chinese individuals to launder money out of China and avoid scrutiny and enforcement since Xi’s anti-corruption campaign which began in 2012. Typically, the illicit funds are transferred into Singapore bank accounts then invested into the region. There have been high-profile busts of Singaporean bankers massaging away anti-laundering oversights. Chinese casinos in Asia and Africa are also common money laundering real estate conduits.
The Asian Development Bank has lowered the GDP growth forecast from 4.8% to 4.7% for Southeast Asia due to concerns with China’s property market (wait until they realize the industrial sector is also strained in China). Inflation is lower than expected in the region at 3.6%. Thailand’s growth forecast was increased to 3.5% from 3.3% this year, and remains at 3.7% for 2024. Vietnam’s heavy reliance on trade has caused a reduction in forecasted growth from 6.5% to 5.8% this year.