Crescente: Bovespa President Edemir Pinto & Banco do Brasil CEO Aldemir Bendine at this month's offering.

With the 2014 World Cup and 2016 Olympics on the horizon, there’s no question about all eyes being on our neighbor to the north. With the world poised to descend on Brazil in the coming years, it is interesting to note how Brazil is beginning to look beyond its borders and engage with foreign countries. Right now, for example, the slopes of Bariloche are teeming with well-heeled paulistas and cariocas, and lilting Portuguese accents can be heard around BA’s finest restaurants and gallerias. But the Brazilian Foreign Investment Experiment (BFIE for short) is starting to expand well beyond tourism and into the boardroom with Argentina being the logical first step, says the Latin Business Chronicle. “The country’s corporate sector has embraced globalization,” writes LBC, “and many Brazilian companies have chosen neighboring Argentina for their first foreign venture. To date, over 400 Brazilian companies have done JV’s or outright purchases of Argentine companies in sectors ranging from cement to beverages to auto parts manufacturing. Now many olhos brasileiros are focusing on opportunities in the banking sectors. The analysts and professors interviewed by LBC describe the phenomenon of “follow sourcing” as a logical pattern where Brazilian banks are increasingly following their best corporate clients into Argentina to fund the growth and expansion of their Argentina subsidiaries. University of Palermo professor Rodolfo Rapán puts the importance of Brazil’s FDI in context: “Since 2003, an average of about $4 billion in foreign funds has flowed into Argentina each year, and 40 percent of those funds have come from Brazil.”  (Full article in English)

Regions like San Rafael offer foreign investors a region reminiscent of Sonoma County in the 1970s.

Politicians are a bit like chess players in the way they are constantly plotting their next moves: pushing new agendas, pursuing re-election or seeking higher office. But for one Alaska politician, the next move was as original as it was unexpected. Wasilla City Council member Nancy Hall announced she will step down from her post and move with her husband to run a vineyard in San Rafael, Argentina. Hall and her husband, Gary, traveled to Chile looking for vineyard opportunities in 2009. She returned to work in Alaska but Gary began to focus on Argentina vineyards after visiting their son in Buenos Aires. A few days later Nancy says, “I got this phone call that said, ‘Honey, I bought a vineyard.’“ The couple told the Anchorage Daily News that San Rafael reminds them of California’s Sonoma County in the 1970s before it exploded. Their newly-acquired vineyard, Shadow of the Andes, grows the increasingly-popular Bonarda grapes, but Hall is quick to clarify their role in the overall Argentine wine supply chain: “We grow the grapes, we don’t make the wine.” The couple plans to keep their Wasilla home and divide time between Alaska and Argentina enjoying what the ADN calls “a life of perpetual summer spanning the two hemispheres.” For more information about Argentina vineyards, visit our archives and for a list of vineyards for sale, download the July edition of InvestBA Privada.

Local officials anticipate another record year of residential construction in Maldonado, Uruguay

The Uruguayan coastal state of Maldonado—home to popular beach side destinations like Punta del Este and José Ignacio—is poised for another record year of new residential development, according to state development and tourism officials. In an interview with El País, the Director of City Tourism for Maldonado Horacio Díaz says in January and February, developers submitted approval requests for 170,000 m² of new residential construction. At the current rate, Maldonado forecasts 400,000 m² of new projects will be submitted for approval by year-end 2010. If that forecast is valid, the increase in new construction requests would exceed 2009 by 14.2%. In 2009, developers submitted approval request for 350,000 m² of new construction, of which Maldonado approved 290,000 m² or 83%. Contrary to popular belief, most of the new construction requests in 2009 were for single-family homes (63%) vs. multi-unit dwellings (37%), of which only 10-12% were high-rise condominiums. In the same article, El País points to the report we shared last month regarding the dynamic nature of the Maldonado real estate market vis-a-vis Buenos Aires. Over a recent 12-month period, the ratio of total area: $ sales was almost identical for both Buenos Aires (200,000 km² : US$4.26MM ) and Punta del Este (20,000 km² : US$437MM). For more information about Maldonado real estate opportunities, visit our archives our download the July 2010 edition of InvestBA Privada.

Leyenda Urbana: La Nación debunks the Top 10 Myths about the Puerto Madero neighborhood.

Puerto Madero is a favorite real estate topic on InvestBA for a variety of reasons. Superlatives make for interesting reading, and Puerto Madero (PM) has certainly generated its fair share since incorporation and waterfront transformation commenced in November 1989. La Nación throws a skeptical eye at those superlatives and culls the Top 10 Myths about Puerto Madero. #1.) It’s the youngest neighborhood to be incorporated in BA. False. Parque Chas in December 2005. #2.) It’s the most expensive BA neighborhood per square meter (sqm). Debatable. While PM units sell for an average of $3,800/sqm and some towers fetch $6,000/sqm, the average sales price in Barrio Parque is $4,750/sqm. #3.) Units with river views command higher prices than city views. False. Most owners surveyed return from the office at dark and would rather look at La City than La Plata Oscura. #4.) There are more offices than residential units.  False. While true initially, that trend began to reverse in 2005 and today the number of residential sqm (1.303MM) is practically double the amount of office space (659K). #5.) Foreign buyers own the majority of new high-rise units. False. 70% of the buyers are still Argentines, although that is changing as more Europeans shift funds out of the battered Euro-zone and more Americans discover the quality of life and cost advantages of living in Buenos Aires, Argentina and Uruguay. For the complete Top 10 List in Spanish, visit La Nación or download InvestBA Privada for the English version.

BA-based Torrente Gelato Caffes offer a gourmet opportunity for potential franchisees.

This week’s featured franchise blends old-world quality with modern technology to make some pretty amazing ice cream. Founded over thirty years ago in the BA neighborhood of Villa del Parque, Torrente Gelato Caffe is a gourmet ice cream chain known for its unique, handmade process and decadent flavors like Chocolino, Dulce de Leche con Brownie, Mascarpone con Frutos del Bosque and Tiramisu just to name a few. For the less adventurous, Torrente has four traditional product lines including Classics, Chocolate Classics, Fruit Flavors and Light Ice Cream. In addition to offering catering services for family and corporate events, the Torrente stores serve a variety of quality coffees, teas and cakes. According to Franquicias Argentina, Torrente will inaugurate a new facility this month to boost production and centralize distribution. Initial investment in a Torrente franchise is approximately US$30,000 for a typical cornerside cafe in Argentina. The company offers on-site training, 3-year renewable contracts and exclusive territories for franchisees. For more information about Torrente Gelato Caffes, visit the website, and for general information about franchise opportunities in Argentina and Uruguay, e-mail franchise@investba.com.

Buenos Aires may have 300x more residents, but thousands of them own homes in Punta del Este.

The first round of the Copa del Mundo is over for local favorites Argentina and Uruguay, and both teams are safely through: Uruguay will face South Korea on Saturday, and Argentina will face Mexico on Sunday. Unfortunately, the only way the two teams would face each other would be in the World Cup final which seems highly unlikely. So today Reporte Inmobiliario (RI) offers the next best thing: the Copa del Condo with Argentina’s capital city squaring off against Uruguay’s most popular beach resort. The Argentine journal sizes up Punta del Este in terms of total foreign investment, as well as its similarities and differences with Buenos Aires. The Punta del Estate Real Estate Association says $934 million in transactions took place between March 2009 and February 2010.  The majority of the deals were done in Punta del Este ($437M or 48%) followed by Maldonado ($175M or 19%), the Rural Zone ($128M or 13%), and La Barra ($45M or 5%). Over the same 12-month period, over $4.2 billion in deals were done in Buenos Aires or 4.5x as many as PdE, which shows how dynamic Punta’s market is when you consider BA has 300x the population. Not surprisingly, the summer months (Dec.-Feb.) are the months when most deals are done in Punta del Este. In closing, RI says recent high profile lot acquisitions by U.S. investors will be one of the topics discussed at their July Conference. (Full article in Spanish)

Pura Piel is an Argentina-based hair removal franchise with a unique business and pricing model.

While some words just sound better in Spanish, the smooth-sounding depilación doesn’t ease the pain of the hair removal process for millions of women in Latin America. This month’s featured franchise is tackling that problem head-on with a concept that has proven both popular and profitable in Europe. The founders of Córdoba-based Pura Piel were convinced the stand-alone hair removal salon concept they had seen in Spain would take off in Argentina, so they imported the pulsed light technology and opened their first centro last September. Nine months later they’ve opened six locations and plans for an additional 19 franchises this year. The first BA location just opened in Belgrano and deals are in the works for Mar del Plata, Santa Fe and Mendoza. The Pura Piel pricing model is unique in that it divides the body into 6 different zones and assigns a flat rate of $99 pesos to each zone making it more affordable for Argentines. While 90% of their clients are women, the founders believe they can boost the percentage of male clients to a healthy 30% (at least those that never saw The 40-Year Old Virgin). Pura Piel franchises start around US$25,000 including equipment, marketing and training with an estimated 12-16 month break-even period. For more information about BA franchise opportunities or to promote your Argentina-based franchise, contact us at franchise@investba.com.

U.S. investors are assembling large parcels in beautiful areas of Uruguay like José Ignacio (above) & Garzón.

Today’s headlines in Uruguay tell a familiar story: large, undeveloped parcels changing hands for record prices. The twist these days is who’s doing the buying. For fifteen years, Argentine investors held the record for the most expensive parcel acquisition in Uruguay:  over $9 million for a 10-acre beachfront parcel in Punta del Este in 1990, the current site of Hilton’s Conrad Resort & Casino. Now an American can lay claim to the title of Uruguay’s priciest land deal and, speaking of Punta casinos, it seems he doubled down. The U.S. investor in question just bought a prime, 37-acre parcel in the beach-side oasis of José Ignacio for $15 million, or approximately $400,000 per acre. That deal comes on the heels of the $12 million paid for a similar sized, adjacent parcel in José Ignacio. Now do the math and put it in historical perspective. Almost 75 prime coastal acres for $27 million or $360,000 per acre or roughly 70% less than the Argentines paid for the Conrad parcel 15 years ago. The deals are even sweeter when you realize the smart money in Uruguay is moving north of Punta del Este up the Uruguayan coast and further inland where population densities are lower and exclusivity reigns. After some glowing reviews and photo essays by the Wall Street Journal and New York Times, U.S. investors are now buying in trendy Garzón. The Journal sums up the rural chic attraction of Uruguay’s interior perfectly: “El Garzón has a dirt road, stray dogs and a $48 ravioli.” For more information about Uruguay real estate, download InvestBA Privada or contact us directly.

From ultra-luxury to fractional ownership to upscale boutiques, hotel opportunities abound in BA.

Foreign buyers. Global brands. Mega-deals. Few sectors of the local economy can compete with the luxury hotel business for headlines and superlatives. Coveted parcels are the object of bidding wars, while others are selling for as much as $21 million. Today Cronista gives a sweeping analysis of el sector hotelero in both Argentina and Uruguay while highlighting emerging trends like condo-hotels, green projects and fractional ownership. Brazil may be hosting the World Cup in 2014, but by then Argentina will have a leg up in terms of luxury properties. Alvear will christen—not one—but two new BA hotels, a St. Regis will rise in Puerto Madero, Nordelta will welcome an InterContinental and, as discussed in April, several new luxury boutiques will open in Palermo and Recoleta. Major chains are also capitalizing on the sheer beauty and natural amenities in destinations like Iguazú (Hilton, Loi Suites), Bariloche (Sofitel), Córdoba (NA Concepts), Brandsen (HoJo) and Tandil (Mülen). And while the four and five-star projects generate the most PR, the most active sector in terms of units under construction and fractional units for sale is the Sub-4 (star) sector. Projects like La Defensa, Hollywood Suites and Dazzler San Telmo are prime examples of the type of in-demand condo and fractional opportunities awaiting foreign developers today and foreign travelers tomorrow in Buenos Aires, Montevideo and other regional tourist destinations. For more information on local sector opportunities, download a free copy of our premium newsletter, InvestBA Privada.

With 7-1 odds of winning it all, Argentina's sponsors are hoping for a miracle in South Africa.

Being an Official Sponsor of the Argentine national team has its highs and lows. Just ask The Coca-Cola Company. The Atlanta-based soft drink maker’s corporate logos were visible everywhere at the Estadio Monumental that October night when Martin Palermo scored the miracle goal against Peru in the rain. A Shawshank moment and dream publicity to be sure. Thirty minutes later in the post-game press conference, head coach Diego Maradona sat at the dais—covered with strategically-placed Coke bottles—and cordially invited his media critics to give him oral pleasure. It’s that combination of on and off-the-field unpredictability that raises the stakes for the corporate sponsors going to battle alongside Argentina and the 31 other teams in South Africa. Wharton gives an excellent overview today titled, Why and How Brands Hope to Score at the FIFA World Cup. The hierarchy of World Cup sponsors is explained in detail as are the number of clothing companies vying for team sponsorships “to raise consumption and sales at an exponential rate.” As always, Argentina suits up with Adidas, while Nike is betting the farm on Brazil and eight other teams. Meanwhile U.S. advertisers will probably get more coverage than the U.S. team: Continental Airlines, McDonalds and Budweiser will collectively invest over US$60 million between now an 2014. In the end, Wharton says, those brands that are most successful are the ones that generate “an emotional connection between the sponsored team, the public and the brand.” For our money, it’s hard to top Argentina beer sponsor Quilmes. Talk about emotional bang for your peso. (YouTube Video)