Recent Study: Venezuela Real Estate Report Q1 2013

Recently published research from Business Monitor International, "Venezuela Real Estate Report Q1 2013", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 07 February 2013

The Venezuela real estate report examines the country's commercial office, retail, industrial and construction sectors in light of the re-election of President Hugo Chavez.

With a focus on the principal cities of Caracas, Maracay and Valencia, the report covers the rental market performance in terms of rates and yields, examining how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the relatively static supply and demand landscape. In spite of an uptick in construction activity as a direct result of government spending plans pre-election, the long-term outlook for the industry remains unchanged.

However, in spite of several chronic problems inherent to the market - including a lack of investment, public sector dominance and an anticipated slowdown in economic growth - the commercial real estate sector is not a dearth of bad news. Our latest data collection in July 2012 demonstrated that, while the office sector continues to struggle, the landscape for retail and industrial property remains promising.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/529535_venezuela_real_estate_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/529535_venezuela_real_estate_report_q1_2013.aspx?afid=201)

Key Points:

- Venezuela's low-income housing programme is providing a considerable boost to construction sector output, and in light of strong H112 data, we have decided to revise up our short-term real growth forecast. However, following the October 2012 elections, we believe much of the momentum will run dry and, given the high fiscal deficit, government spending may have to be reeled in. Therefore, we remain bearish towards Venezuela's construction sector over the medium term.
- We maintain our forecast for a devaluation of the Venezuelan bolivar in 2013 and now see January as the most probable month for it to occur. While an exchange rate adjustment would be too politically damaging in the run up to the country's December 2012 regional elections, Venezuela's sizeable fiscal deficit and substantial depreciatory pressure on the unit suggest that the government is likely to devalue the currency soon after.
- We believe investor confidence in Venezuela's private sector will remain low following the reelection of Chavez, adding pressures to reinforce political ties with allies such as China, Russia and Iran to secure investment. However, given the uncertainty surrounding Chavez's health and the growing unity among the opposition, we cannot rule out a regime change in the coming years. Even in the event of a new government emerging, it would take years to shift away from Chavez's deep-rooted unorthodox policies that continue to overshadow Venezuela's economic outlook.

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