Latin Finance - May/June 2010 - 44

peru retail investment

Sustained growth is pegged to the businesses, respectively. “The significant Interbank group, says the climate is so country’s overall expansion and rapidly growth [in malls] will be in provincial good that he had to go back and redo changing economy. GDP is forecast to grow cities, because the economy is growing the numbers for 2010. “We have had to fastest there and because the modern retail by 6% in 2010 and inflation will be around readjust our budget, which was done in sector is starting from zero,” says Arellano. 2.5%. Growth throughout the last decade the final quarter of last year and based has brought poverty to 36% from 54%, “There is still a lot of virgin territory out on conservative estimates because of the according to the finance ministry. The there.” financial crisis. The situation is far better government reports that the working-age Despite the numbers recorded in the than we could have anticipated,” he says. population that is adequately employed past few years, Peru only beats Bolivia Real Plaza had forecast growth at 5% increased to 48% from 38% in 2006. and Paraguay in South America in terms for 2010, but a slight improvement that began in October has increased in velocity. of penetration of shopping malls and Capital Boost Dasso says some of the Another substantial company’s shopping Peru Shopping Mall Projects change is access to centers saw a 15% Brisk activity in main cities credit. Purchases with growth monthly in Company Country of Origin Amount ($m) credit cards jumped sales for January and Parque Arauco-Wiese Group Chile-Peru 134, three shopping centers in Lima from $2.0 billion at February. the end of 2007 to Real Plaza invested Parque Arauco Chile 100, one shopping center in Lima, $3.4 billion last year, $150 million and was one in Arequipa according to the the fastest expanding Graña y Montero Peru 15, one shopping center in Lima banking association mall operator in Peru Brescia Group Peru 30, one shopping center in Lima (Asbanc). This is the last year. It will soon one area that raises add an eighth shopping Malls Peru Chile 140, one shopping center in Lima, one in Piura some concern, with center, in the southern economists such as city of Arequipa, and Plaza Real-Interbank Group Peru 136, two shopping centers in Lima, Pedro Pablo Kuczynski, should complete three one in Arequipa, one in Puno, one in a two-time finance others later this year Ancash minister, warning or early 2011. Dasso Aventura Plaza Peru 160, one shopping center in Lima, that banks need to says the plan is to have one in Arequipa pay closer attention to 14 malls, as well as Torvisco Group Peru 15, one shopping center in Lima credit history before remodel some existing authorizing credit properties, in the Romero Group Peru 26, expanding two shopping centers, one new one in Piura cards. coming three years. And development Other major Ekimed Peru 10, three small shopping centers in of capital markets, investors are Peru’s Ancash, Ica and Piura which has been slow Brescia, Romero and Puerto del Sol Peru 50, one shopping center in Cusco to date, should help Wong groups, as well Source: Accep solidify growth in many as Chile’s Cencosud, sectors, including retail. Parque Arauco, Ripley Economy and finance minister Mercedes and Saga Falabella. These last two, in supermarkets. While the ratio in Chile Araóz said in March that the government addition to individual investment in their is one mall for every 165,000 residents, was looking at a new package of reforms department stores, have a shopping center in Peru it is one to 950,000. Also, 11% to stimulate capital markets. “We need partnership, Mall Peru. Together they are of retail sales in Peru are registered at new instruments for investors. This is investing $100 million this year in a new shopping malls, while in Chile it is 21% shopping center in Lima. They also have and 70% in the US, according to data from something we plan on working on this year,” she adds. joint projects in the north and south of the the ICSC. Calle agrees, saying that stronger country. Besides economic conditions and changing habits, Calle says the accelerating capital markets will allow for investors to put money into shopping centers as Virgin Land factor right now has to do with logistics. long-term assets. “Private pension funds The company, like many others, is focusing “When a mall opens in one city it begins have hundreds of millions of dollars and its efforts on Lima’s sprawling peripheral to influence everything around it, making are only now beginning to enter the real districts, which began as shantytowns it feasible to open similar projects in the estate market. Shopping centers are longand are quickly moving up the economic surrounding area. The entire coast should term investments that offer an important ladder, as well as provincial cities, such as be covered in the next few years and then physical asset, which we believe will be Arequipa and Trujillo, which are growing the push will be in the highlands and attractive for investors,” he adds. LF on the back of mining and agro-export finally the jungle cities,” he says.

44 LatinFinance

May/June 2010

Latin Finance - May/June 2010

Table of Contents for the Digital Edition of Latin Finance - May/June 2010