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| Feature |
Southern Exposure
Michelle Seaton
01/01/2008
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The Next Big Market
Investors hoping to get in early should know that land is going
fast. In fact, in Mexico, Panama and Costa Rica, the best tracts may already be
spoken for. Aggressive investors in turn have swung their attention to new
frontiers in Latin America, with varying degrees of success.
In Mexico, Panama and Costa Rica, the best tracts of land may already be spoken for. |
Rubén Rochi, the minister of tourism for El Salvador, has hired
Global Strategic Partnerships, a public relations firm in Austin, Texas, to help
the country promote its interests. Specifically, Rochi hopes to coax
luxury-resort developers and hoteliers, as well as real estate developers, to
bring some of their money to the impoverished nation. He believes El Salvador is
the next great destination for the wealthy Americans and Canadians looking for
unspoiled beaches along with inexpensive labor. El Salvador’s message: Costa
Rica is expensive these days; we’re cheap. Give us a try.
The trouble is that many middle-aged tourists remember the
horrible civil war that devastated El Salvador throughout the 1980s; fighting
ended in 1993. In the conflict, 70,000 people died or disappeared, and much of
the country’s infrastructure was destroyed. Rebuilding efforts suffered major
setbacks when natural disasters hit: Two earthquakes—a 7.7 and a 6.6—struck in
2001, and, in October 2005, a volcano erupted and a tropical storm caused floods
and landslides.
Some developers have passed El Salvador and headed right into
South America. The Related Group has one project in Argentina, two in Uruguay
and one in Colombia. "We’re trying to grow the South American division rapidly,"
says the Related Group’s CEO, Jorge Perez, who plans to build 6,000 units on the
continent.
The jewel of this South American division will be a planned
resort community in Cartagena, Colombia. Perez calls it the most beautiful
historic city in the Americas. Cobblestone streets that are centuries old are
inside the walled city. The Related Group owns land just outside the walls—right
on the beach, where Perez plans to build a five-star hotel, condos and a casino.
Perez knows that Americans won’t go to Colombia for vacations. He does not
concern himself with that market. Instead, he looks beyond North America and
across the Atlantic into Europe, where another group of wealthy tourists is
looking for resort housing on a tropical beach. That, he says, is the next big
market.
Michelle Seaton is a senior correspondent for Worth.
Additional Information
 Local Roadblocks
 Getting Clear Title to
Land
 Security and Gated Communities
In the future, there may be
unpleasantness associated with being the foreigners who come in and buy up the
beach, developer Hal Wright says. "In Costa Rica the government knows that
tourism is going to be the source of improving the balance of payments. Still,
there’s a certain amount of resentment."
Punta Mita is a gated community in Mexico, a nation
where an estimated 40 percent of the population lives in poverty. Razor-wire
fences define boundaries where land owned by the Mexican development company
DINE meets community land. Every subcommunity of homes has its own security
fence, with posted guards who question everyone intending to pass. These
security precautions exist in part to keep tourists from wandering among the
private villas, but also to limit access to guests and their possessions by the
thousands of workers who clean rooms or sweep walkways for a few dollars a day.
Although anti-American sentiment in Mexico and most other Latin American countries is much weaker than in Venezuela, a large number of
unemployed or underemployed people working for wealthy tourists is a political
tinderbox that could ignite at any time.
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