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| Countries covered: Peru The global financial crisis and the subsequent contraction in global trade had virtually no impact on Peru's commercial Real Estate sector. At the end of 2009, vacancy rates were running at around 15-20% in Lima and were even higher in Arequipa. However, demand for commercial property, across all subsectors, was still growing strongly. When we interviewed them in early and mid-2010, our in-country sources indicated that the real estate sector was benefiting from the export-led growth of Peru's economy. Peru was also benefiting from the improvement in investors' appetite for emerging markets risk. Investment in the commercial real estate sector is growing. Several new and high-profile projects in Lima will add much needed office space in that city. There is every sign that the new space will be absorbed. The net result is that neither rents nor yields have moved much over the last two years or so. Our sources indicate that rents fell slightly in 2009, and have since moved sideways. They expect that rents will rise by single digit amounts over the course of 2011. Yields appear to have risen slightly over the last two years - apparently as a consequence of slippage in capital values. We think that it is reasonable to look for yields to fall slightly, returning to 2008 levels, over the next four years or so. Key Features Of This Report This is the latest edition of a new series of industry reports published by BMI that seeks to identify the key dynamics of the real estate sectors of 44 countries around the world, some of which are developed and some of which are, in every sense, emerging markets. Once again, the questions that we seek to answer for each country remain as follows: What are the main issues that will matter to actors in and around real estate development in the country concerned, both over the long and the short term? What are the main constraints that they face? What are the key insights that one garners when one compares the real estate sector of the country concerned with its peers in other countries? In Q3 we have introduced a very substantial new improvement to the reports. We have incorporated data and qualitative observations provided to us by commercial real estate agents operating in the countries we survey. As a result we have gained a much clearer picture of the balance between demand and supply in each of three main sub-sectors - office, retail and industrial. We have also introduced a new approach to the forecasting of rental yields, which is discussed in the methodology sector of this report. In Q4, we have incorporated a lot of new data in relation to rents and yields in 2010. We gained this data by way of a new round of interviews with our in-country sources in mid-2010. In some cases, the latest information from our sources has caused us to make significant revisions to our forecasts for 2011-2014. We asked our sources to indicate what growth in rents is likely for 2011. We explain their answers in the Forecast Scenarios. |
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