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  • Emerging Real Estate Digest Writer (Admin)

Weekly Roundup ❘ 8.14.2023

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

 

The left-wing leader plans to spend nearly $200 billion over the next four years on major infrastructure development projects in Brazil. Skeptics point towards the corruption in Lula’s past (i.e., ‘“car wash scandal”) and question whether the motives are to advance Brazil or line the pockets of his supporters. Brazil has surprised to the upside economically.



Washington DC and the finance media are mistakenly applying pressure to build more solar and wind farms. The solution is smart policy around reliable energy sources such as clean coal, oil and gas. Mexico’s PEMEX, government-owned since 1938, has a reputation of mismanaging the nation’s oil and gas reserves.



Colombia has ranked #1 or #2 in foreign searches for Miami real estate for sixteen consecutive months. Colombia’s real estate sector is under pressure which we’ve written about previously. Germany was second, Venezuela third, and Argentina fourth. These searches are one indicator of lack of local confidence in a nation’s future prospects.



The investor remains undisclosed but we know it is a “sovereign fund of the Middle East” making its first Latin America technology company investment. Could it be ADQ in Abu Dhabi? Loft has thus far secured $888 million across eight funding rounds and was launched in 2018. Its last valuation was $2.9 billion in 2021. The application helps people buy and sell residential real estate.


“We are not going to participate in this bloc, in this association. Of course, we celebrate that other countries do. However, for reasons of proximity, geopolitics, we will continue strengthening the alliance with North America and the whole of the Americas.”



Brazil’s onerous and costly operating environment, coupled with small local demand (~140,000 p.a.) for Ford cars/trucks, convinced the automaker to shutter two years ago. It’s cheaper to manufacture vehicles in Mexico and import and pay the high duties associated with Brazil’s protectionist economy. BYD hopes to produce more electric cars for domestic consumption in the region.


 

African nations have more options now and no longer have to jump through Western-nation hoops. They are often required to adopt historically radical social and energy policies in order to secure support from the West. According to Brookings, about 90% of America-Africa trade is the exportation of petroleum products.



The move was necessitated by a weak Cedi and double-digit inflation of 42.5%. Last year Ghana defaulted on most of its loan repayment obligations.


The Kenyan currency has lost over 50% (17% this year so far) of its value against the USD in under 50 months. Much of the nation’s real estate debt is in USD making repayment obligations often unworkable. Inflation rates (7.9% in June) on imported products further diminishes consumer purchasing power.


Download Report. Dead capital refers to properties with lack of proper titles. Nigeria still relies largely on informal and communal titling systems. Nigeria ranks 184th in property registration. On average, 12+ procedures are required to register a title, over 118 days, and costing 27.5% of the property’s value.

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