The Buenos Aires real estate market has shown great resilience
during the years after Argentina’s economic default in 2002; demand and market
values have recovered relatively rapidly for all major real estate sectors.
Particularly the residential and hotel markets gained momentum
during the recovery period; due to a lack of confidence in the local banking
system, residential investment increased which fueled the development of a
variety of residential condominium buildings, most of them targeted at the high
end market. The tourism industry benefited from the significantly reduced local
prices, making Argentina a more affordable vacation destination for an increased
number of visitors. Rural land values have also experienced growth, primarily
due to the increase of commodity prices at an international level.
Accordingly, the industrial, logistics and transport
industries have also shown growth. The retail market did not grow significantly
in terms of new supply, however, retail rents have well recovered to the extent
that in some cases they exceeded rental rates achieved before the economic
crisis.
Office Market
Lease rates and condominium sales prices have experienced an
incredible recovery during the last years; before the default prime lease rates
averaged at $32 per square meter per month (at a time when the Argentine Peso
was pegged to the US dollar 1:1). After the crash, they dropped to under $12 (US
dollars).
While other goods and services in Argentina continued to
maintain a relatively low peso value, prime lease rates in the waterfront
submarkets (Catalinas, Plaza Roma, Puerto Madero), fuelled by strong demand and
diminishing availability, increased to current levels of $25 to $35 in US
dollars. Class A space in other central locations and along the northern
corridor, now range from $18 to over $25.