Latin American Opportunities

ARGENTINA

While there is very little speculative office development in Buenos Aires, a lot of office space is planned in the Puerto Madero area in conjunction with the redevelopment of the old port. As the economy improves, projects that have been held back will come online. Hines Interests L.P. is looking at office and industrial space in Buenos Aires and carefully watching the economy before committing. Tishman Speyer Properies Inc. is under way with a major Class A office building in Puerto Madero.

Alejandro Badino, president of Colliers International in Argentina, said that although the country is still feeling the impact of Brazil's currency crisis, office space is improving steadily. In Puerto Madero's CBD during the last year, banks have been developing the financial area. In many cities, the antique ports are being recycled and recovering their value.

Along with Gonzalez, the biggest developer in Puerto Madero, Colliers is developing four docks in the Buenos Aires port. A Hilton hotel, museum and six new office buildings are planned as part of the redevelopment. Recovery is expected to continue through the first quarter of 2000 as investor confidence increases, according to Liza Him, regional director for CB Richard Ellis Inc.



CHILE

Citibank just built its own 250,000-square-foot headquarters in Santiago, which is a typical occurrence in Chile. Distrust of local developers has led companies generally to build the space they need themselves. But Henry McDonald, director of marketing at Reichmann International, said that is starting to change.

Improvements in Chile's tight real estate market are expected in the next few months, regardless of the presidential election outcome, since all candidates plan to continue with sound monetary and fiscal policies. Investor confidence is high, although short-term growth rates will not near the 7 percent posted prior to 1998. The office market has maintained stable lease and vacancy rates.

According to CB Richard Ellis, increased inquiries into the office market and lower levels of construction should have a positive impact in 2000, and the office oversupply created in Santiago in 1999 by investors and pension funds not advised sufficiently by real estate experts will slowly be absorbed.



PERU

While the office market for most of Latin America remained stable throughout 1999 with minimal variations, Lima, a very small and new market, was an exception. Peru's economy was strong, but the office market suffered from low rental rates and a doubled vacancy due to an oversupply of space. According to Him, this year brings greater potential for economic stability, and the excess space is expected to be absorbed quickly.