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Jonathan Malagón González, Minister of Housing (MINVIVIENDA)
Real Estate

Colombia: LATAM’s Focal Point of Investment

4 MIN READ October 23, 2019
Investors and developers agreed that Colombia was definitely a good bet to make when it comes to real estate investment. During the 2019 edition of Colombia GRI, which took place on the 16 and 17 of October at the JW Marriott in Bogota, Colombia, real estate leaders discussed both the opportunities and challenges they have spotted to invest. 

The day kickstarted with a presentation from Jim Worms, Chairman and CEO of Paladin Realty Partners, where he discussed the newest trends driving the Colombian real estate sector, from multifamily for rent to co-working office spaces. When it comes to how to invest in Colombia, the type of capital is primarily equity with early signs of debt financing, but in order to fully develop the sector, Worms believes that future developments will be financed through various capital sources including crowdfunding and REITs. 

Colombia is well known for its hospitality sector and during the day, top hotel chains discussed the future of the country’s tourism sector. In a session moderated by Wendy Chan, Vice-president of JLL- Hotels & Hospitality, Cristiano Goncalves (IHG International Hotels Group), Joanna Ayala Quintana (NH Hotel Group), Pablo Maturana (Hilton), Paul Adan (Marriott International), Valentina Luque (Accor) and Juliana Gómez (ProColombia) gave their perspective of a growing tourism sector, not in Colombia’s megacities, but rather in its booming secondary cities. As emerging cities continue to grow, urban hotels and other new trends will challenge developers.  

Day two had a strong focus on residential development and investment in Colombia, keeping in mind that by 2030, there will be a strong demographic and social change that will transform the demand. Sandra Forero, President of the Colombian Construction Chamber (CAMACOL), presented members with what the Colombian 2030 housing market will look like. By 2030, Colombia will need 3.2 million homes with an average size of 2.5 members per home, but one of the main changes will be that 82 percent of the population will live in an urban area. 

To follow up on CAMACOL’s forecast, the Minister of Housing, Jonathan Malagón González, provided members with insight on Colombia’s housing policies to bridge its hefty housing gap in years to come. Colombia’s macroeconomic factors will remain favorable for investment, including stable inflation rates and its poverty levels will decrease constantly through the consolidation of its middle class through 2030. González gave particular importance to the gap in VIS, or social housing sector which will grow to a 1.6 million home demand by 2030 in Colombia. The government subsidy program, Mi Casa Ya, will help stimulate investment in the VIS segment. 

Bridging Colombia’s housing gap will need teamwork from both the public and private sector. Increasing Colombia’s investment attractiveness will help boost the development of its cities, and it seems like it has been doing a great job. The last session of the day brought together some of the largest investors including Pegasus, Reurbana, IFC, Peninsula, ProColombia, Jamestown and Ameris Capital. Most investors saw Colombia as the most attractive country in Latin America to invest and that international funds were looking for locals to create local funds.  Although each asset type has its particularities, Colombia holds great opportunities for investment and combined with its openness to foreign investment, the country has endless potential for real estate development.

Colombia GRI 2019
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