During my recent survey of India, I visited Chennai. The city is located on India’s east coast and has growing automotive, industrial, and technology sectors. Behind the strength of this, the city government has invested in its infrastructure to alleviate traffic, reduce commuting times, and increase available housing units, including many expatriate-focused housing complexes along the attractive coastline.
Driving down the four-lane highway from Bangalore’s airport to the city centre, our progress slowed. The road ahead narrowed to two lanes due to bridges that the government has found prohibitively expensive to wide. Arriving after a full day of travel, my trip suddenly became that much longer as we trudged through traffic on the way to my hotel. I could see why assignees desire to live near their offices.
The Bandra Kurla Complex in Mumbai, referred to by many as BKC, has continued to develop and is fast becoming the new business and residential heart of Mumbai. Originally intended to serve as an alternate business district to help decongest south Mumbai, commercial office stock has increased at phenomenal rates in the past five years. BKC now houses India’s Stock Exchange and the Indian headquarters of many large multinational companies.
On my most recent trip, I visited Baku, Azerbaijan. The political and economic heart of this oil-wealthy nation, Baku had seen a large exodus of expatriates starting in 2014 due to falling oil prices. These departures and an overall weak economy brought rents down significantly. Over the last two years, rents have started to recover, and the sources I met with indicated moderate price increases in certain areas. While oil prices have rebounded slightly, the primary driver of rising rents is a decrease in the supply of long-term rentals. ]
Mumbai has long been known as a city with high levels of air pollution from the choking congestion and horrendous traffic conditions. During my recent survey, I confirmed that this reputation has yet to change! The construction of the elevated lines of the Mumbai Metro project continues to aggravate traffic problems along SV Road in the expat areas of Bandra, Santa Cruz, and Khar. Additionally, rush-hour gridlock in Bandra Kurla Complex (BKC) is being impacted by the work on the BKC Metro station project where there will be a new Metro Line 3 and 2B interchange.
Santa Cruz is considered one of the world’s fastest growing cities due to the ongoing migration of Bolivians from the rural regions to the country’s economic powerhouse. During my recent survey, I learned much about this developing city.
Rents increased in Neuquen due to higher demand and low vacancy rates. Real estate agents have clients on waiting lists for apartments, and rentals are not listed for long before being rented. Construction projects are underway for new apartment buildings, which should help increase the number of 2-3-bedroom apartments. However, with growing expatriate demand, rents may increase over the next 6-12 months.
Construction of new apartments and houses over the last four years has created a large rental supply in Santa Cruz. Lower demand for these rentals has resulted in dropping rents. Vacancy rates are high at all but the most popular apartment buildings. Construction continues, with more 2-3-bedroom apartments planned to enter the rental market in the next 6-18 months. However, sources believe rents have likely reached their lowest point.
On August 11th, Argentina held primary elections ahead of the general election scheduled for October 27th. Center-left candidate Alberto Fernandez and running mate former President Cristina Fernandez de Kirchner defeated center-right President Mauricio Macri. This result created uncertainty about the future of Argentina’s economic policy. Many investors pulled their money out of Argentina, and ratings agencies such as Fitch and Standard & Poor’s downgraded their credit rating. The peso experienced rapid and significant devaluation against the dollar, losing roughly 20% of its value in a matter of days. In an effort to stabilize the peso, Macri re-instituted currency controls that had been eliminated in 2015.
During the August survey of Harare, our visit found the Zimbabwean economy in a state of transition. This June, after a decade of using a mix of approaches but primarily relying on the U.S. dollar for transactions, the Reserve Bank of Zimbabwe announced that a new Zimbabwean dollar (ZWL), also known as the Zimdollar, was the only acceptable form of payment.