Construction & Real Estate
From The Report: Mexico 2014
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Mexico’s construction industry had a difficult year in 2013. After growing 4% in 2011 and 1.9% in 2012, the accumulated losses for the sector during the first nine months of 2013 amounted to a 4.5% reduction in construction activity. An acceleration of government spending before the end of the year allowed the sector to finish with a more modest reduction of 2% in construction activity, with the sector accounting for 7.6% of GDP in 2013. The homebuilding sector has been the worst affected. Reeling from a crisis that left some of the country’s largest home builders in bad shape, the real estate sector is finding ways to grow in other segments. Investment coming through new property trusts is pushing the sector to rally around more profitable markets, while demand for office, industrial and commercial space continue to sustain the real estate sector. This chapter includes an interview with Alonso Quintana Kawage, CEO, Empresas ICA.

Articles from this Chapter

Overview

Building for growth: Infrastructure development will help alleviate switch in homes policy
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Despite Mexico’s dynamism and the size of its economy, the country’s construction industry had a difficult year in 2013. After growing 4% in 2011 and 1.9% in 2012, the accumulated losses for the sector during the first nine months of 2013 amounted to a 4.5% reduction in construction activity. An acceleration of government spending before the end of the year allowed the sector to finish with a more modest reduction of 2% in construction activity. The spending also helped establish an encouraging base for growth for 2014. The homebuilding sector has been the worst affected, and is having to adapt to a switch in governmental strategy.…

Analysis

Modernisation drive: New PPP law is likely to attract private investment in infrastructure
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Accompanying reforms in sectors such as energy and telecommunications, the government is rolling out an ambitious infrastructure development effort to support economic growth over the coming decades. President Enrique Peña Nieto announced in mid-2013 plans to channel MXN1.32trn ($102.56bn) to improve roads, airports, railroads and communications infrastructure. The World Economic Forum’s “Global Competitiveness Report 2014” ranked Mexico 66th out of 148 countries for the quality of its infrastructure. The overhaul is expected to revive the construction sector, which was negatively affected by a slump in the housing market and sluggish…

Interview

OBG talks to Alonso Quintana Kawage, CEO, Empresas ICA
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Interview:Alonso Quintana Kawage What do you make of the 2013-18 national infrastructure plan? Can it be carried out efficiently? ALONSO QUINTANA KAWAGE: Without a doubt this is an ambitious plan. Projects with a total value exceeding $300bn imply annual investment of more than 6% of GDP, a figure never before reached in the history of Mexico. By way of comparison, the previous administration spent amply on infrastructure but never exceeded 4.5% of GDP. Implementation of the current plan…

Overview

A new focus: Despite housing challenges, the market has been strengthened by liquidity from investment trusts
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Reeling from a crisis that left some of the country’s largest home builders in bad shape, the real estate sector is finding ways to grow in other segments. Investment coming through new property trusts is pushing the sector to rally around more profitable markets. The increase in the number of international firms has led to the development of the office segment. The same is happening in industrial real estate, as new production units boost demand for office space and commercial and industrial projects. HOUSING PLANS: Mexico’s housing sector is still dealing with the consequences of a skewed housing strategy. Over the past two decades…

Analysis

Home away from home: Constitutional amendment will ease foreign ownership in coastal areas
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The real estate sector is expecting a wave of investment from overseas with the lifting of a law restricting foreign ownership of land within 50 km of the sea. A change in article 27 of the Mexican Constitution is set to ease ownership rules and attract an inflow of foreign buyers. The measure should provide encouragement for the vacation-home market, which has been negatively affected by the financial crisis in the US as well as international concerns about security. The law has been approved in the lower chamber of Congress, but needs to be passed by the Senate. DIRECT OWNERSHIP: Under current regulations foreigners can buy land with…