REAL ESTATE INVESTMENT ALTERNATIVES LIMA, PERU Real... · 2016. 5. 1. · Luxury Condo Rental Investment Alternatives Miraflores, Lima City Center Option #1 – Malecon de la Marina

REAL ESTATE INVESTMENT ALTERNATIVES

LIMA, PERU

INDEX

1. Executive Summary ………………………………..…………………………. 3

2. About Us …………………………………………………………….……………… 4

3. Economic Indicators of Peru ………………………………………………. 5

4. Luxury Condo Rental Investment Alternatives …………………… 7

5. Luxury Residential Real Estate Development ……………………… 13

6. Land Banking Investment Alternatives ………………………………. 19

7. Mixed Use Subdivision Real Estate Development ……………… 23

8. Contact Information …………………………………………………………. 30

Executive Summary

Peru is a proven emerging market and it boasts solid

Investment alternatives in real estate.

In the following report one will learn about four diversified, yet profitable real estate investment alternatives.

Luxury Residential Rentals

Luxury Residential Development Project

Land Banking Opportunities

Mixed Use Subdivision Development Project

About Us

Palo Alto Inmobiliaria is a leading Peruvian real estate developer and brokerage firm. For 20 years, they have built luxury condominiums in Lima’s most exclusive locations.

The Palo Alto brokerage firm is engaged in real estate transactions in all segments of the industry, such as residential, commercial and industrial; targeted for individual buyers and real estate developers.

We have the expertise to help you enter the Peruvian real estate market in any capacity, from investing in a single property to developing large-scale projects.

Palo Alto Construction – Miraflores, Lima

Palo Alto real estate brokerage – San Isidro, Lima

Economic Indicators of Peru

Latin America is a strategic real estate investment destination. It is rich in natural resources and has a strong

emerging market. None richer than Peru.

Peru boats several of the world’s biggest mining projects and is a world leader in the production of gold,

silver, copper, zinc among others. It also has a large market cap in industries such as agriculture, fisheries,

textiles and energy.

One of the world wonders is located in Peru, Machu Picchu, one of the world’s biggest tourist attraction fuels

a booming tourism industry in Peru.

In the last 20 years, Peru has benefited from political stability and strong economic policies, which have led

to a fast growing middle class. Demand for goods and services has increased demand for residential,

commercial and industrial real estate. As per the Interamerican Development Bank, the Peruvian middle

class has grown fivefold in the last nine years. (1)

Middle Class Growth Percentage of the Population

2005 2014

Source:

1 http://elcomercio.pe/economia/peru/clase-media-peruana-casi-se-quintuplico-ultima-decada-noticia-1811416

http://elcomercio.pe/economia/peru/clase-media-peruana-casi-se-quintuplico-ultima-decada-noticia-1811416

Economic Indicators of Peru

Peru has a housing deficit of 1,800,000 units. Every year 80,000 new units enter the market. The demand

for housing is so drastic due to the poor living standards the majority of the population currently

survives. There is a shortage of commercial and residential real estate in every mayor city of Peru.

The demand has created a booming construction companies in Peru. The largest construction company in

Peru, Graña y Montero, who specializes in massive middle class developments, is currently listed in the

NASDAQ stock exchange in New York, USA.

Construction Boom in Peru

The World Bank forecasts Peru to have the fastest growing GDP growth in the region. (2)

This is thanks to major mining projects that will be in full effect on 2017 and 2018.

Forecasted GDP Growth Percentage

Source:

2 http://datos.bancomundial.org/pais/peru

http://datos.bancomundial.org/pais/peru

Luxury Condo Rental Investment Alternatives

City Center, Lima – Peru


San Isidro, Miraflores, Lima City Center

San Isidro is known as Lima’s most exclusive residential district. San Isidro is home to:

Over 60 world embassies

The financial district where all major banking head offices are located

The business district that features numerous luxury office towers

The three facts are the main driver for a strong rental market in San Isidro.

San Isidro Business District

Miraflores is recognized as Lima’s most exclusive commercial, entertainment and residential district.

Miraflores feature the following:

Several luxury hotels

Highly desirable tourist attractions such as shopping, restaurants and nightlife

The Malecon, a 20km seawall filled with public parks and amazing ocean views

Miraflores has been highly sought after for international rentals due to its high quality of life, security,

ocean views and proximity to San Isidro.

LarcoMar, Miraflores Oceanfront Luxury Shopping Mall


Miraflores, Lima City Center

Option #1 – Malecon de la Marina 588

Historically most luxury condominiums were located in the most exclusive areas of San Isidro. Recently the

Miraflores Malecon has become highly sought-after and it has become a destination for upper echelon

condominiums developments.

Malecon de la Marina 588, is an exclusive luxury condo tower designed by Peru’s most famous

architect, Bernardo Fort Brecia, he runs Latin America’s most successful firm Arquitectonica*.

Constructora Palo Alto** is the builder; they are a boutique developer with a 20-year track record of

providing the highest level of luxury condominiums in San Isidro.

The malecon is sought after because of its amazing ocean views, but also thanks to its numerous public

parks, bike lanes and walkways. There are also sporting facilities such as soccer fields, tennis courts, sports

multiplex and a skate park.

Project completion is scheduled for September 2016. The building will be a new luxury standard for the

malecon. The lobby will be one and a half meters from the street level, will feature vaulted ceilings

and will be complexly finished in marble and granite. The amenities include a heated swimming pool,

fully-equipped gym, events room and a BBQ terrace.

* http://www.arquitectonica.com

**http://www.constructorapaloalto.com

http://www.arquitectonica.com/

http://www.constructorapaloalto.com/

Luxury Condo Rental Investment Alternatives Miraflores, Lima, Peru.

Option #1 Project: Malecón de La Marina 588

Ocean view luxury condominiums Ready: September 2016

Miraflores, Lima, Peru

127m2, 2-bedroom apartment

Average Unit Cost $550,000

Furnished Rental $3,000 per month Number of years for investment return 15.28

Unfurnished rental $2,500 per month Number of years for investment return 18.33


Average Unit Cost $1,000,000



Average cost of furnishing and apartment: $15,000 - $25,000

Av. Malecón de la Marina 588, Miraflores, Lima - Peru


San Isidro, Lima City Center

Option #2 – Jorge Basadre 1216

Historically most luxury condominiums have been located in San Isidro because it is the most prestigious

residential district. It is where all the major banks and large transnational corporations have their head

offices. There are also over 60 world embassies located in the most exclusive areas of San Isidro. There are

also monumental landmarks that provide a high quality of life.

Jorge Basadre 1216, is an exclusive luxury condo tower designed by Peru’s most famous

architect, Bernardo Fort Brecia, he runs Latin America’s most successful firm Arquitectonica*.

Constructora Palo Alto** is the builder; they are a boutique developer with a 20-year track record of

providing the highest level of luxury condominiums in San Isidro.

* http://www.arquitectonica.com ** http://www.constructorapaloalto.com

Project completion was March 2016. The lobby is one and a half meters from the street level and

is completely finished in marble and granite. The amenities include a heated swimming pool,

fully-equipped gym, events room and a BBQ terrace. It is conveniently located in the heart of San Isidro.

http://www.arquitectonica.com/

http://www.constructorapaloalto.com/


City Centre. Lima, Peru.

Option #2 Project: Jorge Basadre 1216

Financial District luxury condominiums Ready: Immediately

San Isidro, Lima, Peru


Average Unit Cost $480,000.00




Average Unit Cost $650,000



Average cost of furnishing and apartment: $15,000 - $25,000

Av. Jorge Basadre 1216, San Isidro, Lima - Peru

Luxury Residential

Real Estate Development

San Isidro, Lima City Center – Peru

Luxury Residential Real Estate Development


San Isidro is recognized as Lima’s most exclusive residential district. San Isidro is home to:

Over 60 world embassies

The financial district where all major banking head offices are located

The business district that features numerous luxury office towers

The three facts are the main driver for a strong rental market in San Isidro.

The Lima Golf Club is Lima’s most exclusive social club. It is surrounded by the most expensive real estate in

San Isidro. Having a view of the golf course is considered not only a luxury but also a secure, stable

investment.

The Olive Tree Forest is a Heritage Park featuring several hundred 500-year old olive trees. It is a major

tourist destination and a highly sought after location not only because of its natural beauty but also because

of its proximity to Conquistadores Av. An exclusive drive that has several boutiques, coffee shops and

restaurants.

The proposed luxury condominium site is closely located to all these San Isidro landmarks.



The proposed Project site boasts 2257m2 in area (68.40m x 39.80m).

The current zoning permits allows for a high-rise 15-story residential tower. There are very few golf course

facing lots available. Potentially in the future one could apply for a zoning change that could see the land

turn into commercial use or also to allow for more floors being permitted. Such move would generate a

significant windfall. This would require the proper lobbying efforts.



Economic feasibility study

Lot Size 2257.53 m2

Non buildable area 35.00%

Buildable area per floor 1467.39 m2

Service area per floor 50 m2

Total Area for Sale per floor 1417.3945 m2

Area for sale rooftop 366.85 m2

No. of floors for sale 14

Maximum building height 15

Total area for sale 19843.52 m2

No. of underground levels 4

Total area underground 9030.12 m2

Avg. Selling Price $ 3,500 /m2

Revenue $ 69,452,331

Aggregate Construction Costs* $ 26,696,703

PROFIT (minus cost of land) $ 42,755,627

*Does not include the cost of the land

Land Banking Investment Alternatives

Asia, Lima South – Peru

Land Banking Investment Opportunity

Asia, Lima South – Peru

There lies an attractive land banking opportunity in the municipality of Asia, located in the south

Lima, Peru’s capital city. Peru has proven to have the fastest growing economy on the LATAM

region thanks to its rich natural resources such as mining (gold, copper, silver, zinc, etc.), oil and

gas, fisheries, agriculture and tourism. Peru has the highest forecasted GDP for 2017 and 2018 in

LATAM, as per the World Bank. (3)

Solid economic policies and political stability over the last 20 years has led the Peruvian middle class

to grow at a fast rate. In the last ten years alone, the middle class has grown from 11.3% to 50.6%

of the population, as per the Interamerican Development Bank. (4)

Industrial space is at a premium in Lima. The Price of industrial use land is the highest in LATAM.

This is due to two factors: 1) A shortage of large space for industrial use due to the nature of the

urban sprawl and 2) Large industry demands thanks to the fast growing economy.

Several future infrastructure projects will positively affect Peru and specifically the south of Lima.

For example the interoceanic highway that will connect the Pacific and Atlantic ocean, new port

terminals for ocean freight and a train connecting the south of Lima to the city center.

Sources:

3 http://datos.bancomundial.org/pais/peru

4 http://elcomercio.pe/economia/peru/clase-media-peruana-casi-se-quintuplico-ultima-decada-noticia-1811416

http://datos.bancomundial.org/pais/peru

http://elcomercio.pe/economia/peru/clase-media-peruana-casi-se-quintuplico-ultima-decada-noticia-1811416

LOT #1 – Km89 Panamerican Hwy, Asia, Lima Peru

Location: Km 89 Panamerican Hwy, Asia, Lima, Peru.

Surrounding area: Beach communities, housing developments, shopping strips nearby.

Potential: Housing complex, shopping center, educational grounds.

Size of the lot: 1.7 hectares.

Price: $3,150,000



Surrounding area: Prime luxury Beach communities, housing developments, large commercial strips

featuring restaurants, bars, cinemas, shopping.

Potential: Housing complex, self-storage, commercial, hotel.


Price: $3,200,000



Surrounding area: 10 minutes from Prime luxury Beach communities, housing developments, large

commercial strips featuring restaurants, bars, cinemas, shopping. Adjacent to the town of Asia.

Potential: Mixed use, industrial, commercial, services and residential.

Size of the lot: 93 hectares.

Price: $121,000,000



Surrounding area: Several Beach communities, housing developments. Walking distance to the

beach. Ocean view thanks to the slope of the land.

Potential: Mixed use, low and midrise, residential and commercial.


Price: $25,000,000

Mixed Use Subdivision,

Residential/Commercial, Real Estate Development

Sarapampa, Lima South, Peru

Mixed Use Subdivision, Residential/Commercial, Real Estate Project

Sarapampa, Asia, Lima South, Peru

Sarapampa is located on the 107km of the Panamerican Hwy, right in front of great Pacific

Ocean beaches. There are several middle class Beach homes communities, which house

roughly 20,000 people during the summer months and 10,000 all year round. It is conveniently

10km away from the Asia Shopping mall which features luxury restaurants, nightlife and

shopping. Due to the slope of this 200,000km lot (20 hectares), all homes have ocean views.

Traditionally this area would be targeted for season beach goers, but the recent trend is that

middle class families are buying property in this area as their primary home due to the recent

increase of industrialization in nearby municipalities such as Lurin (70km north), Chilca (40km

north) and Chincha (100km south). It is also a short two-hour drive from the Lima City Center.

The mixed-use subdivision proposed in this document is located on the second row of

developments in Sarapampa, which is approximately 500m2 away from the beach. This poses

a more affordable option than beachfront properties. This project is targeted to the rising middle

class segment. We are proposing 5-story towers with 100m2 condominiums, 120m2 and 90m2 housing

lots and a large shopping center that would service this development and all the other

communities nearby. It should be noted that currently there is no shopping available in Sarapampa.









Feasibility Study

Contact Information

Alfredo Rolando Grosman

General Manager, Palo Alto Inmobiliaria

Address: Av. Conquistadores 461, San Isidro, Lima - Peru

Cell: +51 989173199

Wechat: PaloAltoPeru

Email: [email protected]

Website: www.paloalto.com.pe

mailto:[email protected]

http://www.paloalto.com.pe/

Documents

REAL ESTATE INVESTMENT ALTERNATIVES LIMA, PERU Real... · 2016. 5. 1. · Luxury Condo Rental Investment Alternatives Miraflores, Lima City Center Option #1 – Malecon de la Marina