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  • Emerging Real Estate Digest Writer (Admin)

Weekly Roundup | 9.19.2023

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

 

The $30 billion price tag for the train is 200% higher than the projected budget of 156 billion pesos estimated in 2020. The government is expected to manage the project and has strangely decided that the Mexican military will administer and profit from the train. Earlier this year, AMLO instructed the military to forcefully seize private sections of railroad owned by a Mexican billionaire.



TC Latin American Partners and Real Estate Investment have announced their integration and formation of the new brand, Industrial Gate. The new entity hopes to take advantage of the nearshoring hype which consultants and the finance media are aggressively howling to manifest. Since 2012, TC Latin America Partners has invested $730 million into real estate in Colombia, Peru, Mexico and Chile.


It is estimated that 570,000 acres (i.e., 230,000 hectares) in Colombia are devoted to growing coca, enough to produce 1,700 tons of refined cocaine according a report by the UN Office of Drugs and Crime. Cocaine has overtaken oil to become Colombia’s #1 export. Should international real estate investors invest into countries where governments are beholden to drug cartels?



The broad ranging interview addressed inflation, gender ideology, abortion, Pope Francis’ affinity for authoritarian leaders, architecture, China and more. It has received over 417 million views. Meanwhile the out of control Argentinean govt has blamed the IMF for its internal inflation issues. It has relieved some workers from paying taxes leading up to the elections in an attempt to buy more votes from the working classes. A US court has ordered the Argentinean govt to pay $16.1 billion for its theft of an American oil company, Petersen Energia, in 2012.



Be careful interpreting this one investors. The rapid change is a gain only on paper and represents Chinese manufacturers gaming the system and moving production to Mexico in order to gain USMCA benefits not intended for them. This is likely to be an issue in the next USMCA negotiations meaning long-term industrial investors should be wary before jumping in. Every time a Chinese product is shifted to Mexico to gain USMCA advantages the effect on trilateral trade is amplified given the simultaneous decrease for China and increase for Mexico. Playing with fire.

 

Vector Logistics is South Africa’s leading frozen infrastructure logistics operator. The transaction concluded this month. This is A.P. Moller’s (i.e., MAERSK’s) second investment in South Africa, the first was in 2021 with Reunert to develop a portfolio of renewable energy solutions for industrial customers in Africa. A.P. Moller Capital is a Denmark company with annual revenues exceeding $80 billion, with 100,000 employees operating in 130 countries.


African Infrastructure Investment Managers (“AIIM”) made the investment through what is now its eight fund. The proceeds will be used to purchase more datacenters and increase capacity for the platform in Africa. N+One was founded in 2008 and has two datacenters in Morocco, with plans recently announced for three more in Senegal in the capital of Dakar. It has hinted at a facility in Nigeria.


The gimmick involved in this refinancing was $125 will be used to fund “ocean conservation” efforts. The recent coup in Gabon came after this loan casting further doubt that the proceeds will be spent wisely.


Registering a title takes between six months and two years, entailing around twelve procedures, and costing around 21% of the value of the property. Insiders say titling properties is often an act of faith, and success can depend on who knows who.


Centrum Real Estate received the funding for the $91 million housing project in prestigious Two Rivers. Phase one of the project is sold out, phase two presales have now begun thanks to this funding secured to complete construction. “Affordable housing” has a different meaning in Africa than in America. The DFI’s like to bend the rules here and use the gimmick of calling middle class housing, affordable housing, to help move money given the development mandate.

 

Srettha Thavisin became Thailand’s prime minster last month. He received a Master’s in business from America’s Claremont Graduate School. His career began working as a manager at Procter & Gamble in Thailand before getting into property development with his family’s real estate business. The real estate company he helped build is now publicly listed in Thailand, with a market cap approaching $1 billion.



The 20+ developments vary in real estate type and include well-known firms such as TCC Group, Ritz-Carlton Hotel, Chang Beer, Fraser Property, Magnolia Quality Development Corporation, Charoen Pokphand Group, Japan’s Sumitomo Mitsui Trust Bank, Central Group, and more.


Vietnam wants peace and stability and to focus on continued economic development. Given the long war fought in its borders not so long ago, one can understand its reluctance to pick sides. Vietnam’s primary concern with China is its aggressive maneuvering in the South China Sea which runs along Vietnam’s border. Only America’s navy can keep China at bay. America and China are Vietnam’s two largest trading partners.


Attracted to Vietnam’s factory, logistics and residential segments institutional investors are investing and overlooking some faults. The region is challenged at the moment due to high interest rates and poor risk-reward ratios. Many experts view Vietnam as having the highest real estate potential in the region due in part to its young and growing population. Institutional investors now demand high-teens to twenty percent rates of returns to justify the risks.

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