The real estate sector in Uruguay offers high profitability, legal stability and clear market rules. For this reason, foreign investors (especially Argentines) continue to expand their investment portfolio.
Matías Medina, vice president of the Uruguayan Real Estate Chamber (CIU) and director of Macari, highlighted that today there are many foreign investors who already have properties in Uruguay, so the main objective of real estate agents is based on “their continuing to invest in Uruguay and not betting on another country to diversify their investment”, since here “profitability is maintained”.
In this context, he explained that there are different profiles of foreign investors. Regarding those who generally invest in Uruguay and who already have some property, he said that what they are looking for are apartments in a construction site or projects where the construction process has just begun, in order to achieve the best possible profitability.
Mauricio La Buonora, director at La Buonora Desarrollos, said that foreign investors are the first to invest in apartments in the area to find the best price. Along these lines, he said that they have just closed nearly US$ 10 million of foreign investments in the new buildings of Cala del Yatch in the Carrasco area.
He also pointed out that these types of investments are made by foreigners because “there is always demand for rentals” here, although if this is not the case, they can also resell them years later, in which “they earn a significant difference”, since today properties in the red “come in at a very good initial price”.
On the other hand, in relation to investors who come to invest in the country for the first time, Medina stressed that they make their investment when there are only three or four months left for the work to be finished or when the final product is finished. In that case, he said that many investors want to see other buildings created by the same construction and development company to verify “the quality of the finishes.”
Along these lines, he stressed that there is also the profile of investors who buy a property because they are attracted by “the construction quality of old buildings” in which they must allocate the investment for its refurbishment, in order to make it “optimal for renting or reselling”, although in the process changes must be made such as the plastic coating of floors, general painting and a new sanitary and electrical installation, for example.
In these cases, Medina said that investors try to lower the price of the property during the negotiation to amortize these types of expenses that they know they will have to face in the future, since "the tenant today is increasingly demanding and wants to move in with the apartment in very good condition, otherwise, they will not rent it."
For his part, Fabián Kopel, director of Kopel Sánchez, indicated that years ago investors (beyond the Argentines) came from Chile and even Peru, since before there was more excitement in the region due to the high supply of the Uruguayan market. “We feel that this has decreased,” he said.
However, he stressed that there is once again a "moderate flow of Argentines" as they seek to invest with the aim of settling in Uruguay later, although there are still no "large waves" of investment from them "as there have been in other times."
In this sense, he said that the “(Javier) Milei effect” comes into play, since on the one hand there is a group of investors who think that “there is a new era for investing in Argentina”, although there is still a handful of Argentines who will continue to bet on the Uruguayan market despite the fact that today theirs “is much closer to the purchase values that can be had in Uruguay”. Likewise, Kopel affirmed that here they have “much more solid” returns and legal security than in their country, added to the fact that there the cost value of the square meter has doubled and Argentines “perceive it as very high”.
In addition to searching the market for a “reasonable return,” these investors are looking for “comprehensive management,” according to Kopel. That is, real estate agencies take care of “renting the property and managing the property” in the future.
Medina, for his part, said that Argentines value “our economic, political and social stability,” which is why they give the country “a vote of confidence,” and that they count on future governments to maintain their appetite for attracting foreign investment without generating “a radical change.”
Meanwhile, La Buonora said that the local market offers “security and guarantees,” and that today “it is very solid and has been growing for many years.”
Regarding the areas where they are looking to invest, Medina said that they are divided into two sectors. One of them is where the promoted housing stands out. In this case, neighborhoods such as Cordón, La Unión, La Blanqueada, Centro, Tres Cruces and part of Ciudad Vieja take the awards, according to the vice president of the CIU. In turn, he assured that the Bella Vista neighborhood is one of the “surprises” of housing promoted so far in 2024, since “it is renting very well and quickly.”
Kopel also said that investment in promoted housing “allows flexibility and prevents risk” since they have “a 100% occupancy rate in terms of rentals,” making it a market that “is very solid.”
Medina said that 70% of investors are looking to spend up to US$150.000, while the remaining 30% are looking for units to rent for a certain period of time and then occupy themselves.
Source: The Between Rivers
