Dame Dos: BA's Villa Crespo has quickly become the epicenter of outlet shopping in Argentina.

It used to be that Argentines had to travel roughly 4,500 miles to South Florida or Orlando’s International Drive to indulge in deep discount retail therapy, but it seems the outlet concept has caught on fire in one BA neighborhood. Villa Crespo has long been known as a solid, middle-class residential neighborhood, but the 2001 financial crisis left this BA barrio with several abandoned warehouses and residences. Today, according to Clarín, many of those buildings are being bought for upwards of US$500,000 and converted into the BA equivalent of Sawgrass Mills. The phenomenon began five years ago when several large BA clothing stores started opening their first outlets around Gurruchaga and Aguirre. Today there are over 60 outlets in a four-block zone and close to 100 in a 10-block region. The retail pioneers like Hunor Gobos closed their stores on Avenida Florida five years ago, opened the first VC stores and have watched sales and shoppers grow every year since. Clarín says the Boom de los Outlets has really exploded over the last ten months, and the area is teeming with bargain-seeking tourists, especially Brazilians, Chileans and Uruguayans. Daniel Chain of the Buenos Aires Department of Urban Development says prices in Villa Crespo are still lower than Palermo but says they will continue rising, as Villa Crespo will be one of the prime beneficiaries of GCBA’s new infrastructure to control flooding. As for the name of the new retail zone, some refer to it as Palermo Queens, while others call it Villa Crespo Nuevo. Personally, we like the sound of Porteño Mills. (Full article in Spanish)

Investors, government officials and developers of projects like Moca see the potential in Barracas.

You can take the boy out of the barrio, but can you take the barrio out of the barrio? That’s the question posed by Jude Webber in a Financial Times analysis of one of Buenos Aires’ rising stars, Barracas. In addition to being three of the most expensive neighborhoods in the city, Webber says, Belgrano, Palermo and Recoleta have lost much of their neighborhood feel or barrio-ness, as working-class families gave way to new commercial and residential construction over the past decade. During the same period, grittier and more industrial Barracas, saw factory closures and falling property values. Those lower prices, along with urban renewal efforts by the City of Buenos Aires government, are now attracting more porteños and foreign investors. Considering it was home to some of BA’s wealthiest families in the 19th century, there is classic architecture on par with Montevideo’s Ciudad Vieja. The abundance of closed factories is also drawing the interest of residential developers. Projects like The Moca, a massive urban redevelopment of an old factory, highlight the potential that exists in Barracas. As one analyst tells Webber, “Barracas has excellent potential. There are millions of square meters available and the possibility for multimillion reconversions.” One New Yorker who owns a converted B&B sums up the cool Barracas vibe: “This neighborhood is definitely up and coming. But I wouldn’t want to see it change totally. I like it a little dirty and arty.” (Full Story)

Buenos Aires Mayor Mauricio Macri surveys the renovation progress at the Teatro Colón.

Once considered one of the world’s top five opera houses, Buenos Aires’ Teatro Colón has played host to musical legends like Igor Stravinsky, Richard Strauss, Luciano Pavarotti and Arturo Toscanini. But when the curtain fell on Swan Lake in October 2006, many wondered if the aging and badly neglected theatre would ever regain its former glory. Shortly thereafter, the City embarked on an ambitious $100 million renovation project to restore something the Colón once boasted: perfect acoustics. A botched mid-80’s mini-renovation changed that and performances over the ensuing twenty years were marred by thin sound and noticeable reverberations. A team of architects, engineers and renovation experts spent the past three years demolishing and then renovating everything from the stage to the balconies to the freight elevators. Unfortunately peeling an onion of that magnitude began to reveal more serious structural problems, so the planned 2008 re-opening (for the 100th anniversary) was postponed until this year’s Bicentennial celebration in Buenos Aires. Despite doubts and criticism from opposition parties, the Government of the City of Buenos Aires persevered and the Colón is finally ready for her debut on May 24. Actually a dress rehearsal was held last night, according to Clarín, for the hundreds of workers involved with restoring the most important cultural symbol in Argentina. Shortly after 8:00, the conductor took the stage and the sounds of Beethoven’s Ninth Symphony soared through the hall. As for the restoration of the once-perfect acoustics, the conductor’s comment says it all, “We cried like little boys.” (Teatro Colón)

Overdue: The City of Buenos Aires hopes to cap broker commissions on rental contracts.

One of the biggest consumer rip-offs in the Buenos Aires real estate world revolves around broker commissions and deposits for rental properties. While the Internet continues to revolutionize industries and circumvent intermediaries, the dinosaur known scientifically as Porteña Rentus Apartamentata has continued to morph, persevere and garner fat commissions from those seeking rental properties. So if you just heard high heels digging desperately into the perfectly-uneven sidewalks of BA, that was the reaction of thousands of local realtors to a long-overdue proposal that would slash these commissions and make rental properties more accessible. Toward that end, some government officials are proposing a two-prong solution: 1.) Fix the maximum commission that a broker can charge at 3% of the value of the rental contract (down from the frequent 7-10% for a two-year rental) and 2.) Create a Banco Ciudad-managed Guarantee Fund to assist would-be renters who lack the resources to cover the entire security deposit necessary at contract signing.  Opponents quickly—and quite predictably—branded the proposal as “arbitrary” and “inconsiderate.” But judging by the comments below the article, the average porteño isn’t too concerned about hurting local realtor’s feelings. In a city like BA where average salaries don’t keep pace with housing prices and demand, any initiative that makes rental properties more accessible for local workers and their families should be embraced.

“If you can make it there, you can make it anywhere.” New York? No. Try Tokyo. That’s the quote from one Buenos Aires designer who recently joined the ranks of BA fashionistas finding commercial success in the Far East. Divia Zapatos designer Virginia Spagnuolo is just one of the designers interviewed by La Nación in this week’s magazine offering a look at 2010 Fall/Winter collections. And just as the recent social gaming acquisitions highlight the shifting path to venture capital for Argentina companies, La Nación says Argentina designers are pursuing different avenues to success in competitive international markets like Milan, Paris and increasingly Tokyo, Shanghai and Hong Kong. Trade promotion groups like Export.ar play an important role nurturing up-and-coming talent and encouraging their participation in trade fairs like last September’s Tokio Rooms 2009. Marcos Amadeo, the Director of the Buenos Aires Office for Creative Industries says Asian buyers demand original designs, collections with a message and, most of all, exceptional quality. Back in this hemisphere, international events like New York Fashion Week have opened doors for BA designers like Fabián Zitta and Benito Fernandez; Zitta sold three collections in Los Angeles while Fernandez’s designs were chosen and featured in the Sex & The City sequel. More BA designers like Jessica Trosman are upping the ante in the Orient by financing in Asia and opening their own stores; established local players like Onward Kashiyama can facilitate the transition. Kostüme boss Camila Milessi is another beneficiary of the BA-Asia fashion connection. A trip to Japan led to the creation of a new collection, a shoe deal with Pony and a broader perspective: “We realized our clothes, which are pretty unique here, are more mainstream in other parts of the world.” (Full article)

Despite a sluggish start and less new construction, 2009 finished on a positive note in Buenos Aires.

Argentina’s Reporte Inmobiliario just released the 2009 summary for real estate transactions in the City of Buenos Aires and—despite the fact that activity is at the lowest level in a decade—the overall trend for 2009 is positive. According to RI, “Compared to 2008, the total number of real estate transactions in the City of Buenos Aires (75,950) fell 21.84%, while the total area of housing units under construction declined almost 35%. In the Province of Buenos Aires, the decrease in the number of transactions (105,638) was 25%.” As the adjacent bar graph indicates, BA home buyers really pumped the brakes during the first half of 2009 with monthly sales figures falling on average 30% compared to 2008. If that trend had continued, 2009 real estate transactions in the City would have fallen to around 60,000 compared to the actual figure of 75,950. After eight long months, renewed optimism and market activity finally kicked in around September, and the year ended with the first monthly gain in real estate activity vs. 2008. In terms of units under construction, MercoPress reports “New projects totaled 1.7 million square meters (18.3MM sq. ft.), which means a 34.7% fall compared to 2008. Similarly three neighborhoods concentrate the majority of new projects, with one of them (Palermo) absorbing 11% of the total which is 200,918 square meters (2.16MM sq. ft.).” InvestBA believes the upward trajectory of sales activity will continue in the first-half of 2010 given a favorable supply/demand imbalance, the lingering mistrust of local banks and lack of sound investment alternatives. The second-half of 2010 should be less robust given the shifting landscape and growing uncertainty building up to the pivotal 2011 elections. (Full story)

Besides providing relief from the heat, the 3 Playas Porteñas have been a great exercise in public trust.

Even though it’s summertime and thousands of Buenos Aires residents have made their annual exodus to the beaches of Argentina, Uruguay and Brazil, surveys suggest 70% of porteños have neither the time nor the resources for such a vacation. In 2009, the Government of the City of Buenos Aires took a novel approach and decided if residents couldn’t go the beach, the City would bring the beach to them. The “Playas Porteñas” debuted last summer and almost 300,000 residents took advantage of the urban beaches complete with sand, volleyball courts, soccer fields, cooling stations and the signature yellow umbrellas and chairs. The Buenos Aires coastline had popular beaches a century ago, but years of pollution and water contamination have rendered the Río de la Plata unfit for swimming. The 3 Playas Porteñas were such a hit last year, several more were added for the 2010 Season. According to Clarín, the beaches have been a good exercise in public trust: the neighbors, thankful for the opportunity to relax and cool off with their families, took pride in the Playas and kept them clean, orderly and free of vandalism to the umbrellas and chairs. So A.) if you’re in Buenos Aires and B.) you’re burning up, the beaches will be open daily now through February 28. (YouTube video)

Young Argentines working in one of the offices in the new Buenos Aires Tech District.

WiFi connectivity, generous tax breaks, grants to cover the cost of quality certification, preferred lines of credit at local banks, and a government-sponsored training program to groom future talent. It may sound like a Christmas wish list, but it’s an emerging high tech reality in the Parque Patricios neighborhood thanks to the City of Buenos Aires. And according to Cronista, the list of goodies is attracting large multinationals and small start-ups alike. Iron Mountain and Clarín Global have both reserved office space, while India’s Tata Consultancy Services announced a new Global Delivery Center back in September. Cronista says small and medium-sized businesses (in Argentina, PYMEs or Pequeñas y Medianas Empresas) make up the majority of Argentina’s 1,600 tech companies, and 70% of those companies are located in Buenos Aires. Carlos Pirovano, Subsecretary of Investment for the City, says the number of companies working in the Distrito Tecnologico will more than double in 2010 to 50 with over 10,000 employees, so the City is investing in everything from a new fiber optic network to new subway stations to accommodate the growing talent pool. Another important development will be the launch of the Metropolitan Tech Center, an initiative to connect with secondary school students and groom the next generation of IT talent here in BA. (Full Cronista article).

All first graders in BA schools study English today; only 2 schools offered such classes in 2001.

December is usually the time for making resolutions for the year ahead, but the Government of the City of Buenos Aires is looking back and celebrating the many achievements since December 2007 when conservative Mauricio Macri was elected Mayor. “In 2 years, we accomplished more than in the last 10,” declares the city’s microsite, “We’re making up for lost time.” The accomplishments are numerous and organized into eight broad categories including Health (20 new Health Centers, 35 new ambulances), Education & Culture (Broadband connectivity in 98% of schools, record attendance at Buenos Aires festivals), Economic Development (an emerging Technology District, the opening of an Investor Assistance Center for foreign investors), and Security (the new Metropolitan Police force, a state-of-the-art Urban Monitoring Center). Another noteworthy achievement is designed to prepare the next generation of porteños for a more competitive global environment: English as a Second Language is now being taught in all first grade classes in the City; second and third grades will be added in 2010 and 2011, respectively. The website is a shining example of transparency and accountability for a city government that has delivered on many 2007 campaign promises, is working today to improve the quality-of-life in Buenos Aires  and is preparing for Bicentennial celebrations in 2010. Hence, the new website’s tagline: Hicimos, Hacemos, Haremos (We Did It, We Are Doing It, We Will Do It).

India’s largest IT services and outsourcing firm, Tata Consultancy Services, today announced the opening of a new global delivery center in Buenos Aires. The 100,000 square foot facility, which will be Tata’s first SAP Center of Excellence in Latin America, will initially house 250 IT consulting professionals and ultimately 1,400. The announcement was a major first step toward GCBA’s (Government of the City of Buenos Aires) stated goal of transforming the Southern District of BA including the Parque Patricios neighborhood into the Buenos Aires Technology District. GCBA’s goal is the creation of 5,000 jobs in the Tech District by 2010 and 30,000 jobs by 2012. Following the groundbreaking ceremony, Clarin declared the March to the Tech District officially underway (Article) while BA Mayor Mauricio Macri shared the good news on his Facebook page.

For more information on IT expansion opportunities in the Tech District including official contacts and relocation incentives, e-mail me at info@investba.com.