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NEW YORK CITY-Latin America is the next frontier in international real estate according to panelists at yesterday’s NAI Global 2007 Latin America Forecast Event here in New York. While Mexico has been on the forefront of minds for some time now, speakers named Chile, Brazil, Venezuela and Argentina as countries to watch.

Mexico, where real estate has typically been driven by ‘gringos,’ as Gary Swedback, with NAI Mexico, says, is now beginning to see significant investment from Mexicans. He says ‘deep integration’ is now the buzz word as more and more companies announce they are pulling out of the United States and moving factories and distribution sites to Mexico. Companies in the automotive, aerospace and home appliance industries are the major forces; for example Whirlpool closed down operations in the Midwest and moved to Mexico where labor is cheaper and the cost of operation is less.

But it is not only American firms looking for a better deal, Sweedback said in 2007 NAI will complete development of two facilities, one for an Indian firm and the other for a Chinese firm. The creation of the North American Inland Port Network that directly links Mexican industrial sites to major US cities has further aided the industrial growth of the county. The NAIPN links the United States to Asia in a route that when fully realized could be quicker than getting through the congestion at the Ports of Los Angeles and Long Beach.

ProLogis has recently begun to focus more attention on Mexico’s potential. Silvano Solis, a senior vice president with ProLogis, says the company will complete at least 3.5 million sf of new development in 2007.

And while Mexico is ProLogis’s only Latin American focus at this time, other companies are beginning to tap South America’s resources. Sabrina Crow, CEO of Latin America Media Management, says the continuing strength of the economies of Latin American countries as well as the large supply of natural resources like metals, oil and minerals will drive real estate to the area. As an example from 2004 to 2008 the amount of cargo coming into Latin America grew 50%, according to Crow. This increase has led to larger more prominent port cities and increased interest from abroad.

Speakers at the event discussed the changing political world in Latin America but unanimously agreed that whether the various governments swing left or right the economies are going to continue to strengthen. Still, they stressed the importance of knowing local government, traditions and ways of doing business before launching into the Latin American real estate market.

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