Peru, the venue for this year’s RECon Latin America & Caribbean, will see the construction and/or expansion of 19 retail centers between now and 2021, making Peru one of the most active countries for development in Latin America. Some $917 million will be spent on those projects in the South American country of 33 million people.
The 700 people attending this conference are witnessing a more prosperous country than those who attended the last such ICSC event in Peru, eight years ago. The Peruvian economy is now 31 percent bigger and has lifted some 3 million residents out of poverty. The country's retail sector now represents 10.7 percent of GDP and accounts for 25.8 percent of jobs, noted José Antonio Contreras, president of the 2019 RECon Latin America & Caribbean planning committee and the general manager of Open Plaza, a leading neighborhood center operator in Peru.
“The economic pickup has increased the income and spending of Peruvians, which consequently has improved their quality of life,” said Contreras.
Open Plaza Angamos, in Lima
The country has seen strong macroeconomics and rising investment, production and exports, he noted, despite some regional political turmoil over the past year. Inflation and spending, meanwhile, are both under control, he said.
Peru's GDP grew by 3.99 percent last year, far above the 1 percent average growth across the region, and slightly higher than the 3.6 percent global average, according to World Bank statistics. The International Monetary Fund is projecting that the Peruvian economy will expand by 2.6 percent this year, fueled in part by ambitious infrastructure projects like a new metro line in Lima and some major mining projects. Next year looks like it could be even brighter, with anticipated growth somewhere around 3.6 percent.
This rosy scenario bodes well for the retail real estate industry, which now boasts 85 centers — 13 more than there were in 2015, according to Asociación de Centros Comerciales del Perú, the country's mall trade group. And there is room for plenty more: Peru has 2.7 shopping centers per 1 million inhabitants, versus Chile's 8.0, Colombia's 5.1 and Uruguay's 4.1.
Other indicators of the health of the Peruvian industry include a mall vacancy rate of 4.6 percent and a rising number of monthly mall visitors — up from 55 million in 2015 to 71 million this year.
The Larcomar center, in the Miraflores district of Lima
Peru is one of five Latin American markets in this year's Global Retail Development Index, published by A.T. Kearney, which ranks 30 developing countries based on retail investment potential. Peru is in 13th place, and Colombia is 10th. Brazil, Guatemala and Paraguay made this year's ranking too. (The top three markets are China, India and Malaysia.)
“Over 50 percent of global retail sales are taking place in emerging markets, though the growth has slowed down,” said Gerardo Rocho, a partner at A.T. Kearney Mexico. “Retail sales of developing countries went up, from $2.7 trillion in 2004 to $9.1 trillion this year.”
Lima's Real Plaza Salaverry attracts 1.5 million visitors a month
RECon Latin America & Caribbean kicked off on Wednesday with visits to four Lima retail centers, including Jockey Plaza, one of Latin America’s top-performing malls in terms of sales per square foot. Also included in the tour was the 5-year old Real Plaza Salaverry, which receives 1.5 million visitors every month. This Lima center, a property of Real Plaza, Peru's largest retail landlord (with 20 centers in its portfolio), will be adding 10 stores next year as well as a food marketplace and a children's entertainment area. In Lima's north, the 600-shop Plaza Norte, Peru's biggest mall, will build a 1,600-space parking facility next year to supplement the existing 3,000 parking spaces. That 10-year-old mall, which Corporación Wong owns, reports some 4 million visitors per month. Its retail offer is complemented by government services, a 600-seat Roman Catholic chapel and an adjacent building that houses Lima's main bus terminal. The landlord also plans to add a hotel at the site. The fourth mall visited is Mall Aventura Santa Anita, which has a 10,000-square-meter park and an amphitheater.
By María Bird Picó
Contributor, Shopping Centers Today