What is the situation of the country’s municipalities for attracting real estate investments, are the data reflected in the ranking launched by the Association of Real Estate Developers of Guatemala (ADIG) and Grupo Innovaterra.
It is considered that these indicators will be a guide for investors interested in entering one of these markets and carrying out projects, but also a guide for municipalities and other State entities about the management or regulations to improve.
In addition, it can become a guide for the formulation of local public policies, when used to promote local dynamics and promote public-private collaboration in municipalities, explained Fernando Marroquín, president of the ADIG and Jean-Roch Lebeau, manager of Grupo Innovaterra .
Although there are already evaluations or measurements such as those carried out by Segeplan such as the Municipal Management Ranking (RGM) and the Fundesa called Local Competitiveness Index (ICL), this is the first Municipal Real Estate Investment Ranking, based on the indicators that are of interest to the real estate sector, it is added.
The main box
The measurement is made up of a general ranking based on 5 axes, and these in turn add up to 40 variables that include different aspects to improve the conditions of each municipality.
In the top 10 of the general ranking there are 6 municipalities from the department of Guatemala or the metropolitan area. The scores are from 0 to 1, with 1 being the maximum score.
The first box is occupied by Guatemala, with 0.75, followed by Mixco with 0.53 as well as Villa Nueva and San Miguel Petapa with 0.51 each, while Santa Catarina Pinula appears in seventh place and Fraijanes in eighth with 0.44 and 0.43.
Regarding municipalities from other departments, they are: in the fifth box Quetzaltenango, with 0.50, followed by Antigua Guatemala with 0.45, as well as Chimaltenango and San Lucas Sacatepéquez with 0.41 each.
“Among the big conclusions is that we have a pool of premium municipalities to invest in” and the majority is in the metropolitan area headed by Guatemala City and neighboring municipalities, but good results are also appearing for municipalities such as Chimaltenango, Antigua Guatemala and some intermediate cities, which have been talked about in the country recently, explains Lebeau.
It exemplifies that three of the 9 intermediate cities enter the top 20 of the general ranking, such as Guatemala and Quezaltenango, while Cobán appears in box 13.
The remaining six are located from position 21 to 55 and are Escuintla (21), Flores (26), Huehuetenango (38), Zacapa (53) and Retalhuleu (54).
The five axes
The positive aspects, but also the gaps, can be observed in the 5 axes: in four of them the first place is for the municipality of Guatemala, but for those that follow it or the national average is low. While only one axis is led by another municipality, in this case Quetzaltenango.
- Territory
On the Territory axis, the capital appears with 0.78 and the national average is 0.44. Complementing the top 10 are Quetzaltenango, Panajachel, Mixco, San Miguel Petapa, Santa María Visitación, Salcajá, San Pedro Sacatepéquez, San Marcos La Laguna and San Pedro La Laguna.
This analyzes accessibility, environment and services. “A well-connected territory, with a favorable environment and adequate services, has the potential to attract investment and stimulate real estate development,” the entities report states.
And according to the data, 154 municipalities are located in the Low category, reflecting that there is limited potential to attract investments due to access and service restrictions.
Here the demographic structure and economic activities are evaluated. A diverse and active population, with levels of formal employment, can influence the demand and supply of real estate properties, generating investment and development opportunities, it is added.
In this the capital obtained 0.80, and the national average is 0.26. They are followed by San Martín Zapotitlán (Retalhuleu), with 0.50, and other municipalities such as Mixco, Villa Nueva, Siquinalá, Tiquisate, San Miguel Petapa, Ayutla (Tecún Umán), La Democracia and Quetzaltenango, with between 0.40 and 0.47.
Among the data it appears that 20 municipalities are in a position classified as High or Very high, with characteristics of a diverse, active population and with high levels of formality, which positions them as attractive for investment, says Lebeau.
However, it states that more than 250 municipalities have low rates of formalized active population and depend mainly on agriculture.
It includes governance, regulations and technical and financial capacity, taking into account that an environment where authorities function efficiently, apply clear regulations and have trained personnel, fosters investor confidence and the creation of successful real estate projects, which which helps with legal certainty.
In the top 10 of this classification, the first place is Quetzaltenango, with a score of 0.84 and the national average is 0.26. Second place goes to Guatemala with 0.79; San Miguel Petapa with 0.78; and are followed by San Andrés (Petén), Salamá, Villa Nueva, Antigua Guatemala, Livingston, Salcajá and Cobán.
For this axis, it is reflected that 130 local governments are in the Very low category. In these cases it was assessed that they lack clear regulations and the necessary technical and financial capacity to attract real estate investments.
While more than 250 municipalities lack reliable cadastral information systems, according to the analysis. The executives explained that this lack makes territorial planning difficult. Meanwhile, only 15 municipalities have managed to satisfactorily articulate their construction regulations with territorial regulations.
Evaluate the size and economic dynamics, including the issue of remittances, explains Marroquín. In this case, it is shown that a robust economic environment, growing and supported by a diversity of activities and remittance flows, can stimulate investment in property and the development of real estate projects.
The municipality of Guatemala comes out with the highest score with 0.77, while the national average is 0.26. Mixco reports 0.51 and is followed by Villa Nueva, San Pablo La Laguna, Chimaltenango, Quetzaltenango, Santa Catarina Pinula Villa Canales, Fraijanes and San Juan Sacatepéquez.
It is important to note that 50 municipalities are in the “high” and “medium-high” category, which have a robust and growing economic environment. These aspects are supported by the diversity of activities they have and the flows of remittances, which make them attractive to invest.
Separately, the Market index includes the analysis of the levels of banking and local demand. “A well-banked market, with active demand and a variety of companies, promotes real estate investment and the development of projects that satisfy local and regional needs,” explained Lebeu and Marroquín.
Here Guatemala also leads, but the score is 0.59, while the average is 0.11. In the top 10, in this category there are 9 municipalities in the department of Guatemala, apart from the capital, and they are San José Pinula, Mixco, Villa Nueva, Chinautla, Fraijanes, San Miguel Petapa, San Pedro Ayampuc and Amatitlán. And of the rest of the country, it only appears in ninth place, Chajul (Quiché).
Among what is detected in this axis is that more than 280 municipalities have very low indicators of banking services in relation to the gross domestic product (GDP) and only 35 are in the High category with a well-banked market, which reflects active demand and segments of the population with the ability to pay.
Other conclusions and observations
In general, another point that should be taken into account is that in the next 20 years, it is expected that about 4 million people will arrive in the main urban centers. Although this aspect reflects a challenge to be addressed, it is also an opportunity for the real estate and economic development of these areas.
The executives report that between 150 to 200 municipalities are in a more complex situation to be attractive from an investment point of view, an aspect that is also very much in line with the social and economic situation they reflect.
The lack of banking implies conditions of informality and that has a great impact on the market axis for the real estate sector, which is very important when observing the ability they may have to pay and the development of real estate products, even for the middle class. low.
Good or bad conditions in a municipality, in the different axes can attract or scare away real estate investments not only in housing but in shopping centers, commerce in general, hotels and tourist centers.
The “surprise municipalities”
Lebeau commented that they also found “surprise municipalities,” which stand out for efficient municipal management and can be considered treasures for visionary investors, but many of these are still “not on the radar” or have not been followed up on. what they do, what they offer and how they have achieved it.
Here, Salcajá́ is one of them, since it leads the municipal management category, with 0.39 on average, but reflects 0.69 in the municipality index, and 0.62 in territory. In the market and economy it still appears a little low.
Escuintla, with 0.37 overall and Salamá́ with 0.38, also have the best scores in the municipality and territory axes. For example, in places like Salamá and others in Baja Verapaz, the support of German cooperation is being reflected to strengthen the technical and financial capacities of their municipalities, he exemplified.
In Escuintla, the level of formalization that employers such as sugar mills can generate in terms of hiring personnel helps.
But in the axis of the territory there are few surprises, they say, since the best positioned include several municipalities in the highlands and the metropolitan area.
Marroquín explains the importance of the axes “because there can be good legal certainty but a bad market, which is not interesting for investors either. The first thing a developer looks for is the market and sniffs it out and immediately afterwards what is the legal certainty of entering that market.”
Register here for the virtual masterclass for digital subscribers “Low investment franchises in Guatemala: Where to start?” this Thursday, March 21 at 6 p.m.
#identify #municipalities #country #conditions #real #estate #investment