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  • Emerging Real Estate Digest Writer (Admin)

Weekly Roundup | 11.28.2023

Top headlines and news impacting Latin America, Africa and Southeast Asia commercial real estate.

 
Latin America headlines


This year the coffee chain opened its first store in Africa, in Egypt, with the next international expansion taking place in Dubai. The company is focused on entering Turkey and Qatar, and will be soon returning to Mexico.



The Monterrey plant has 5,000 employees today and the expansion will add 900 workers through 2025. The investment will be used to build a new packing building, extending an existing warehouse, car parks and more. The facility is already the largest LEGO manufacturing plant in the world. LEGO is growing market share as rivals Mattel, Hasbro, Funko and Jakks Pacific have all reported double-digit revenue and sales declines so far this year. LEGO entered Mexico in 1994, the same year NAFTA was established.


Lego growth from 2005 to 2021


China had little interest in Mexico until recently when the opportunity presented itself to game the system and push products into America tax-free through the USMCA framework. The maneuver is squarely against the spirit of the agreement and will certainly be on the top of the list of items to address at the next USMCA rework in 2026. In absolute terms, China is a miniscule investor in Mexico compared to America, but it is the most rapidly growing investor. Emerging Real Estate Digest readers had a lively discussion on the matter on LinkedIn.


chinese dfi into mexico trends


Troop (Juan Goyenehce) is the crowdfunding platform and the idea is to invest in American real estate with retail investors in Colombia who would like to own assets generating dollar income. The Rincon family, through its Corner Companies platform, will be the lead investor and will co-invest in the properties primarily in NYC, Miami and San Francisco.



The mega industrial investment manager is based in America, and made the acquisition through its Mexican REIT structure. The property is comprised of 40,800 m² (i.e., 439k ft²) of industrial structures plus land in Monterrey, Nuevo Leon. As of September 30, 2023, Prologis Mexico owned 228 logistics and manufacturing facilities in six industrial markets in Mexico totaling 44.2 million ft² (i.e., 4.1 million m²) of GLA.


 
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The disgraced leader of the disgraced party can’t even get propaganda right these days as demonstrated by a pathetic single water tap inauguration ceremony this week. Under Ramaphosa, power blackouts are a constant, the economy is on life support, and currency now near to collapsing. South Africa today is uninvestable because of its “mis”leaders whose governing philosophy is simply to enrich themselves. Prior to becoming President, Cyril made himself extremely wealthy through using the strong arm of the state to coerce private companies to handover equity shares to him and buddies in exchange for not being mistreated by the government. Only a handful of black South Africans have benefited from the ANC’s wealth and equity stripping tactics.



Bonus: the ANC controlled government recently passed a measure to sever ties with Israel and close its embassy. 248 voted in favor and only 91 against making it not just an EFF sideshow. It later petitioned publicly and forcefully for the ICC to arrest Netanyahu.




Ex-Barclays CEO, Bob Diamond, formed the SPAC-funded Atlas Mara banking group in 2015 to “shake up Africa” but he misjudged the lay of the land and has pulled the reigns on his Africa ambitions. Atlas Mara’s footprint in Africa is now greatly diminished, and shares virtually worthless with insignificant trading volumes traded OTC.



The move to privatize the companies, through IPOs, comes after new regulations were passed cutting back the Kenyan bureaucracy. The last privatization in Kenya was in 2008 when 25% of Safaricom, the major Kenyan telecom, was sold also through an IPO. Kenya is making many good moves these days to position itself in the new world forming.



The government of South Africa (i.e., PetroSA) initiated a tender seeking a partner willing to invest $200 million in the Mossel Bay LNG plant located in the Western Cape. 20 companies responded, but only Russia’s Gazprombank met the technical requirements. PetroSA is a corrupt and inefficient mess, let’s see.


 
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This announcement comes off the heels of Tesla shelving plans to build a similarly sized factory in Mexico. The Prime Minister of Thailand will accompany the senior Tesla team at events as it tours sites this month, a stark contrast to Mexico’s President who threatened Tesla after it decided to invest in the north of Mexico, not the south as AMLO preferred.


global ev production


Indonesia is receiving very little benefit from America decoupling with China because it remains a country mired in corruption, opaque and everchanging regulations, and an entrenched special interest elite who always seem to get their pound of flesh. Even Chinese manufacturers avoid the country when possible. A bright spot is that the country has recently become the world’s largest nickel producer after massive investment, mostly from China to secure the critical mineral for itself. Washington DC is working on a bilateral trade deal with Indonesia, and Musk’s Tesla contemplating nickel investments.


nicel production by country in 2012 and 2022


Future trade agreements will be bilateral in nature given the growing realization that globalization, as has been practiced, is a failed ideology whose time has passed. The failed CPTPP collapsed in 2017 after America withdrew making it clear to all that things have changed. Vietnam will have to make deals between individual nations and is in some ways stuck smack dab in the middle of the growing tensions between America and China. It may be forced to soon pick sides instead of playing the sides off against each other as it has done successfully to this point.


growth in vietnam gdp 1992 - 2022

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