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Should We Be Looking At The Latin American Property Market?
by MARK BENSON on AUGUST 18, 2013 Should we be looking at the Latin American property market? For many years the Latin American economy was seen as something of a basket case with the likes of Brazil, Argentina and an array of other economies struggling to survive. Indeed just prior to the turn-of-the-century Brazil was on the verge of collapse and required an IMF emergency loan to survive although incidentally this loan was repaid early as the Brazilian economy bounced quicker than many had expected. There is therefore an interesting opportunity in Latin America where property is now in great demand especially amongst the growing middle classes. If you take a look at Latin America through clear glasses with no stigma and no predetermined views, the economy in the region is exceptionally strong compared to the likes of Europe, the Far East and North America. Indeed while economic growth was recently downgraded slightly by HSBC it is still far and away above that expected in other areas of the world. So, should we be looking towards Latin America for property investment? The growing middle classes It is interesting to see that countries such as Brazil and Mexico tend to grab the lion’s share of the economic headlines relating to Latin America. While there is no doubt these two particular economies are very influential it is worth noting that Costa Rica, for one, is attracting more than its fair share of interest with a recent $10 million partnership announced to develop a range of middle income residential units. Quote from PropertyForum.com : “Can a foreigner own property in Costa Rica? The answer to the question is Yes. Anybody can own property in Costa Rica. You have the same right as a Costa Rican!” The investment by Paladin Realty Partners is just one of many in the region which have caught the eye of international investors. Indeed this particular investor now has exposure to 3 similar joint ventures to build in excess of 1700 housing units. These particular developments are focused upon the growing middle class of Costa Rica and the fact they now have more disposable income than ever before due to ongoing economic growth. Long-term economic growth Historically inflation has eaten away at much of the long-term economic growth we have seen in Latin America although inflation is now under control, the vast majority of economies are far outperforming their North American, European Far East and counterparts and the financial situation is more stable than it ever has been. If we also take a look at the political arena we will see that while there have been instances of unrest, most notably in Brazil over the last few weeks, on the whole the political situation across Latin America has improved. While it will be foolish to suggest that the political arena could not suddenly become more volatile the fact is that with overseas investment at record levels, unemployment falling and more disposable income for many in the region, there would be no benefit in rocking the economic boat. Conclusion Very often we tend to focus upon North America, Europe and the Far East with regards to long-term property investments when in fact the situation in Latin America certainly demands some attention. The region we see today is very different to that of 20 years ago and while often seen as something of a “financial basket case” in years gone by, we are now in a whole new era. You will still need to be selective about the countries, the areas and the type of properties you consider, many experts believe that this region of the world is set for sustained economic growth for some time to come. Continue reading
Biofuels Could Lead To Billions in New Capital Investments
Research firm finds new capital investments in biofuels could tally nearly $70 billion over next ten years Published: Jul 23, 2013 Though biofuels appear to be expanding more slowly than originally projected, they will soon grab a stronger foothold in global infrastructure, and may translate into $69 billion worth of new capital investments, says energy research firm Navigant. According to their latest research, the firm says even in the wake of slowing overall biofuels growth and a renewed interested in fossil fuel sources, the next wave in advanced biofuels is nearing commercialization and is expected to advance significantly. Projected revenue from biofuels production, Navigant says, could reach $7.6 billion by 2023. “Conventional ethanol, derived from corn starch, coarse grains, and sugarcane, is expected to remain the largest segment of biofuels over the next 10 years despite facing increased scrutiny as a viable long-term alternative to fossil-based liquid fuels,” says Mackinnon Lawrence, principal research analyst with Navigant Research. Research firm finds new capital investments in biofuels could tally nearly $70 billion over next ten years “The fastest growing segment in the industry, though, will be advanced biofuels such as advanced ethanol, biobutanol, and green diesel, which are moving beyond the pilot and demonstration scale at a handful of projects across the globe,” Lawrence adds. But supply and demand policies will play a critical role in the development of the biofuels market, Navigant points out. Specifically, the firm says targeted production is expected to surpass both obligatory and voluntary blending policies by 2019, assuming actual production will keep pace with current supply targets. “This imbalance is expected to have a significant impact on ethanol and biodiesel blending policies at the country level,” the research says. But Navigant also projects that policy makers could capitalize on greater supply and expand existing blending mandates to encourage greater integration of biofuels into the domestic fuel mix. Though 2019 is more than five years off, some analysts project the “blend wall” – or the point at which more biofuels are made than can be legally blended into fossil fuels – will arrive as soon as next year in the United States. In a February commentary, University of Illinois economists Scott Irwin and Darrel Good explained that in the U.S., policies such as the Renewable Fuels Standard will mandate that a certain amount of biofuels is produced, but the consumption has to increase to necessitate more investment and expansion in the industry. “It seems unlikely that E85 consumption could increase from around 100 million gallons today to a total of 5 billion gallons in 2015. This far exceeds the current E85 fueling infrastructure (around 600 million gallons per year),” the economists wrote, noting that “we are also skeptical that E15 consumption could increase anywhere near the needed 5 billion gallons by 2015 due to a variety of limitations.” Despite the uncertainty surrounding biofuels policy and the potential of the industry to grow, however, Good and Irwin note that EPA has the authority to publish an advanced ethanol mandate – similar to what Navigant’s research expects – thereby expanding existing biofuels policy and continuing with the RFS for the next several years. Continue reading
UK Seeks “Best” Biofuel
Posted on August 12, 2013 by Joanna Schroeder According to an article in The Guardian , the United Kingdom (UK) is willing to pay for the best biofuels. The UK government is hosting a competition to come up with the most viable demonstration plants for biofuels made from waste organic materials, such as wood waste or straw. Many groups, especially environmental groups, have begun to lobby in favor of “better biofuels” or ones they consider to be both better for the environment or for society. Within this context, groups are opposed to first generation biofuels – or those that can be used for “food-” aka the food versus fuel debate. In light of this trend, focus has shifted to biofuels made from other feedstocks, especially waste materials – things that would end up in landfills. Attempts to manufacture biofuels from waste have been going on since the late 1960s; however, until now, research has been limited to the lab have have not met with great success. Yet growing concerns about the environment has brought more attention to the transportation sector and a resurgence in waste-to-energy technology has evolved. Today, the industry is beginning to see some success at demonstration level . In the UK, Ministers believe that research has now reached a stage where advanced biofuels are commercially possible. The department for transport said indications from the biofuels industry have demonstrated there are potential projects with a modicum of interest. The Ministers believe there will be several “high quality” bids for the 25m on offer, which must be matched by private sector investment. Norman Baker, the Liberal Democrat transport minister, told the Guardian, “It’s hugely important that we decarbonise transport. We have been up hill and down dale on biofuels in the past few years. What we need to do is distinguish between good biofuels and bad biofuels, and this competition will produce good biofuels.” The first step of the prize will involve a feasibility study detailing the design of the competition and the criteria that needs to be met by any bidder. This stage is expected to take four or five months, after which bids will be accepted. A winner could be announced within a year, but the process could take longer depending on the bids received. The prize will accept a bid for a project using any methodology or feedstock as long as they can be proved to produce carbon savings over conventional fuels and come from feedstocks that are environmentally sustainable. Continue reading
