Uruguay huerta organica

Organic farms like this one in coastal Uruguay are drawing a new crop of foreign visitors.

With spring upon us and the growing season ready for liftoff, agricultural activities in Argentina and Uruguay are becoming more organic and attracting more foreign tourists in the process. According to FreshPlaza.com, Argentina now has the second largest land area dedicated to organic production.

Argentina’s 10 million organic acres are only surpassed by Australia with 30 million; the U.S., China and Brazil all have fewer than 5 million acres under production. Organic fruit accounts for 36% of Argentina’s foreign sales while juices and wines account for 8%, a figure that will rise as more Argentine wineries add organic offerings to their product mix.

When asked why organic makes sense in Argentina, one of the owners of Jean Bousquet in Mendoza told iEco, “Argentina is virgin, it’s organic, there is good drainage, good rainfall. If we go organic, the grape is healthier. We win in terms of quality even though it is more expensive, because obviously it’s easier to treat with pesticides.” The extra effort is paying off, as the Tupungato vineyard’s Malbec Gran Reserva 2008 was chosen Best Argentine Wine at the 2010 International Wine Challenge.

While organic farming is booming on this side of the River Plate, agritourism is on the rise in Uruguay, according to El Observador. Uruguay now has over 100 businesses, farms and estancias dedicated to “turismo rural” which is a real draw for foreign tourists looking for a unique travel experience where they can roll up their sleeves and reconnect with nature.

Alicia Morales, the VP of SUTUR, the Uruguay Rural Tourism Organization, explains the draw of rural tourism in Uruguay: “Uruguay receives a wealth of foreign visitors interested in rural tourism, in the tranquility of our countryside, in the freedom to unwind and above all enjoy the security and hospitality of our estancias.”  (Full Story in Spanish)

Concentración: Buenos Aires Rents Rise 27%

BA Barrio Rental Rates

Like sales prices, average rents are rising throughout Capital Federal and Greater Buenos Aires.

The cost of rental housing in Capital Federal and the Greater Buenos Aires (GBA) area rose an average of 27% in the past year, according to a new market study from Reporte Inmobiliario. The report focused on rental rates for two-room apartments, the most popular unit size in Greater Buenos Aires in terms of both supply and demand.

Clarin’s Pablo Novillo says the rising cost of BA rentals doesn’t stop at the General Paz Highway or the Riachuelo River surrounding Capital. On the contrary, average rents in northern barrios like Martinez and San Isidro are approaching $2,000 pesos per month, while southern barrios like Avellaneda and Quilmes are posting annual increases as high as 44%. GBA average rents range from $1,320 in Ramos Mejía to $1,930 in San Isidro.

Novillo says one of the primary factors behind rising rents is the local trend of concentracion: population gravitation toward more developed areas offering better services, security and Subte stations. Considering those are the barrios with the least number of available rental units, market demand continues to push rents higher.

In terms of unit size, Menos es Mas (Less is More) continues to be the market mantra for developers. “While some municipalities are trying to throw up obstacles (requiring the construction of larger units),” writes Novillo, “it’s logical that developers continue to build small units, because those are the units that rent or sell the quickest.” (Full Story in Spanish)

Argentina Franchise

Foreign franchises will continue expanding in Argentina, while more Argentine franchises go abroad.

C + DQ > I + PU. That’s the formula for franchise growth in Argentina for 2011. Consumption + Demand for Quality will trump Inflation + Political Uncertainty. That’s the tone of today’s iEco analysis of the local outlook for franchises in Argentina.

Andres Mazzeo says that food and clothing franchises will continue to be the Top 2 sectors with the greatest potential, while more Argentine brands will pursue an export model, a trend InvestBA identified last year (Can It Go Both Ways?).

“The franchise sector grew 16% in Argentina in 2010 which exceeded the sector’s historical rate of 14%,” says Lucas Secades, Executive Director of the Argentina Association of Brands & Franchises.” Food franchises account for 38% of the total pie, clothing franchises account for 17%, and nearly 500 franchises operate 25,000 locations throughout Argentina.

While food and clothing still dominate, the experts Mazzeo consulted said there is a large void for service franchises in Argentina. Financial, computer training, real estate, home and commercial cleaning, health & beauty, recycling and tech advisory are just some of the service franchises which either don’t exist in Argentina or have ample room for new entrants with good business models.

And the number of Argentine franchises seeking to export their concept will continue to grow in 2011 following the lead of clothiers like Cheeky, Mimo, Ricky Sarkany and Caro Cuore. Food franchises are the second-most exported including popular brands like Havanna, Freddo, Cafe Martinez and Bonafide.

The last major franchising trends involves powerhouse foreign brands and their continued consolidation (Starbucks now has 26 cafes in less than two years, Subway plans to double its locations in 2011) or long-awaited return: Yum Brands’ KFC and Pizza Hut are coming back and Atlanta-based Wendy’s will apparently do the same. (Full Story in Spanish)

For more information about Argentina franchise opportunities, download the new issue of InvestBA Privada.

Libertador 4444 View

Palermo view from a US$2.5 million penthouse residence on Avenida Libertador in Buenos Aires.

With looming tax hikes, rising real unemployment and falling property values at home, many foreign buyers continue to look to our corner of the Southern Cone for unique real estate properties ranging from condominiums to single-family homes and vineyards to estancias, writes Annabella Quiroga in today’s iEco.

And while there is always an influx of foreign travelers and potential buyers to Buenos Aires, Argentina and Uruguay, high-end brokers have the added challenge of marketing über-lujoso listings that may only be within the reach of a select few. On the sell side of the equation, the listing process is made even more challenging when local sellers refuse to publish their asking price. For example, Quiroga says one of Sotheby’s “most spectacular” listings is a 40,000 square foot, 9-bedroom French mansion called the Club de Campo Abril, but the confidentiality agreement signed between broker and seller keeps the listing price under wraps until qualified buyers can be identified.

The divide between local seller and foreign buyer can also be a product of local sellers believing they can pad their prices for unsuspecting foreign buyers. Think again, says Quiroga, as greater transparency and online access to information helps foreign buyers stay informed with the status quo in Argentina both in terms of real estate prices and the broader macroeconomic situation. (Full story in Spanish)

For more information about real estate opportunities in Argentina and Uruguay, download IncomeBA and the new issue of InvestBA Privada.

 

Bariloche

Mendoza

Uruguay

© 2011 InvestBA.com