Latin American Real Estate Expected To Improve: Fitch
Fitch Ratings has an improving sector outlook for the Latin American real estate sector in 2021. As an economic recovery occurs in 2021, Fitch expects the Latin American real estate sector's general operating environment to improve in 2021. Following the sharp economic contraction driven by the coronavirus pandemic in 2020, Fitch expects real estate issuers to benefit from an expected global and regional economic recovery in 2021. Fitch forecasts a regional GDP contraction of 8.2% in 2020 before growth of 4.1% in 2021. In its 2021 base case scenario, Fitch expects issuers in the industrial subsector to maintain stable revenue and margins in 2021. As this subsector is more connected with the international market, it is more exposed to the risk of a weak global economic recovery in 2021. For issuers in the shopping mall subsector, we expect a revenue recovery in 2021 but still below 2019 levels. Delays in coronavirus containment could extend the recovery beyond 2021. Liquidity is viewed as a key factor to help the sector transition to stabilized operations toward 2021. Fitch views the sector's liquidity as adequate on average, reflected in issuers' cash positions, well-staggered debt maturity structures and relatively low debt maturities in 2021-2022, significant unused committed lines, and high unencumbered assets. The sector also benefits from strong access to bank lending.
Tags : INTERNATIONAL Real Estate GDP revenue economic recovery Latin American Real Estate