By Bea Patel, TLE Property Editor and Director of Shop for an Agent
2015 was an interesting year for real estate in the emerging markets. While there were a number of challenges because of fluctuating oil prices, currency stability and changing investment laws, the New Year may bring new prospects.
But what will the next 12 months hold for developing countries and their real estate markets?
Global real estate platform Lamudi reveals the real estate markets to watch this year.
Mexico City, Mexico
Forecasts from PwC expect that by 2025, Mexico City will be the seventh richest city in the world. With this increased wealth, it’s expected to create more opportunities for the real estate industry in the coming years. While the drop in oil prices and decline of the peso has caused challenges, Mexico’s capital city is experiencing a surge of growth when it comes to real estate. As foreign investment increases and more companies turn their attention to the city, the office market goes from strength to strength. According to Knight Frank, the plan is to deliver 52 million square feet of modern office space within the next three years.
Quezon City, the Philippines
By 2025, Quezon City is expected to have a population of almost four million. According to Lamudi’s onsite data, Metro Manila’s largest city had the most online search traffic between January and June 2015. Search volume for the city grew (on average) 22 per cent per month during the same period. The online real estate platform’s data also reveals the city has the most affordable office space to rent, with an average price of Php503.79 (USD 10.73) per square meter per month.
Kenya has made a name for itself in the start-up and technology sectors. Nairobi has become a hub for global and local corporations looking to enter these booming industries, and take advantage of opportunities East Africa has to offer. As a result, the commercial and residential real estate markets are booming. Industry professionals expect this to continue in 2016. While international entrepreneurs are settling in Kenya’s capital, population growth is set to boost the city’s real estate market in 2016. As more Kenyans enter the job market and disposable income increases, we can expect more money to be spent on housing.
Tourism is booming in Myanmar. At the end of 2015, the Ministry of Hotel and Tourism announced plans to attract 7.5 million tourists to the country by 2020, with a seven-year master plan. As a result, Myanmar’s second city – Mandalay – is improving its infrastructure and welcoming the construction of small, independent and high-end hotels. Housing in the city is much cheaper than in Yangon, but residential and commercial real estate is in short supply. As the number of tourists’ increases, it’s expected to undergo significant development to improve the real estate options available to visitors.
Riyadh, Saudi Arabia
This year will see the construction of a $320 million mall in Riyadh. The project will include office space, retail units, restaurants and a boutique hotel, as well as recreational areas. The Riyadh Walk will cover 137,000 square meters of Saudi Arabia’s capital city and is considered a step forward in upgrading the country’s commercial mixed-use projects. Construction is expected to boost Riyadh’s commercial real estate sector, and lead to the development of more residential, commercial and industrial properties.
Kandy, Sri Lanka
The removal of land lease tax in Sri Lanka is expected to encourage non-nationals to invest in the country’s growth and development outside Colombo. As Sri Lanka’s first ‘Smart City,’ Kandy is to welcome an increased number of international corporations, entrepreneurs and start-ups eager to invest in the city’s growth. The forecast for the property sector over the next 12 months is that it will go from strength to strength. And the continued development of the Colombo-Kandy Expressway is expected to transform the city into a hub of activity, which will likely result in a surge of real estate activity.
In 2015, Morocco ranked eighth in Cushman & Wakefield’s list of top emerging markets in the world. According to the report, the country was in the top 10 with the lowest risk to invest and open a business in real estate. Casablanca, considered the country’s economic capital is experiencing stable rents, increased supply and the development of large-scale commercial and office projects. The city shows potential for both tourism and business, with the amount of office space expected to double in the next four years.