Construction & Real Estate
From The Report: Peru 2016
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Peru’s construction sector is experiencing a slight deceleration, falling from a few years of double-digit growth to more conservative figures in 2014 and 2015, following a reduction in public expenditure. Upcoming elections in 2016 and related government change can be expected to slow the rate of projects being allocated over the short term. However, a significant number of works in the pipeline will ensure activity over the coming years. As authorities gradually improve the environment for public-private partnerships, the infrastructure construction market is set to become easier to manage for Peruvian and foreign firms alike, ensuring the country remains a competitive destination for foreign direct investment. Meanwhile, although economic uncertainty weakened investment in the Real Estate sector for most of 2015, real estate development continues to offer significant opportunities. Housing demand remains high, and growth rates have encouraged the development of office, commercial and industrial real estate projects. This chapter contains an interview with Fernando Castillo, President, ICCGSA.

Articles from this Chapter

Overview

Built to last: Despite the slowdown, the sector has a substantial number of large-scale projects to manage
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The construction sector has both benefitted from and sustained Peru’s macroeconomic growth, as private and public building projects together have allowed the sector to experience repeated years of expansion. Though this rhythm has seen a deceleration recently, the sector continues to be an integral part of the Peruvian economy, and will be part of ongoing efforts to improve housing, develop new urban areas and engage in large-scale infrastructure projects to improve competitiveness. By The Numbers Sector…

Analysis

By design: A new city is set to redefine urban planning and support agricultural development
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While the fall in housing sales and some delays in large-scale infrastructure projects may be slowing construction activity in Peru, the sector is set to be spurred by a new large-scale scheme. In the Lambayeque region of northern Peru, the government is aiming to build a new city and turn it into a development model for other urban areas. The city is linked to the Olmos irrigation project. To increase water availability to the Olmos Valley, engineers are working to redirect the course of water…

Interview

Channeling resources: OBG talks to Fernando Castillo, President, ICCGSA
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Interview:Fernando Castillo What are the most significant challenges Peru faces in reaching its goal of covering 93% of its infrastructure deficit by 2021? FERNANDO CASTILLO: The infrastructure gap has grown to approximately $160bn according to estimates from the University of the Pacific. Although part of this increase is because the new estimates look at a longer time frame, the gap should still be addressed by taking a range of measures over the coming years. First, we need adequate planning…

Overview

Building demand: Housing demand sustains long-term development of residential real estate, while other segments show progress
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Although economic uncertainty weakened investment in the sector for most of 2015, real estate development continues to offer opportunities in Peru. Housing demand remains high, and growth rates have encouraged development of office, commercial and industrial real estate projects. “There is a lot of caution in terms of investment, caused by El Niño and elections in early 2016. These two elements have kept economic expectations down, negatively affecting the sector,” Ángel Ramos Buiza, market…

Analysis

Rent now, own later: A new leasing law should raise the number of homeowners
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Although slower demand affected home sales in Peru in 2014 and 2015, stakeholders are hoping that a recently approved rent-to-lease law will have a positive impact. President Ollanta Humala signed the bill into law in July 2015, and the market is anticipating the new regulation to act on three fronts: encouraging banks to raise the level of mortgage lending, increasing the number of families that can save money for a downpayment and spurring developers to continue construction of new homes as existing…