King of Developers Takes Investment Day by DayWed, 11/01/2017 - 12:52
Q: Why has Grupo Copri decided to invest MX$10 billion in projects through 2020 in Mexico, given the uncertainty in the market?
A: Residential, commercial and office developments are long- term investments. One must make decisions one day at a time, accelerating or slowing down the rhythm of investment depending on demand. We continue to invest and we believe in the success in both the country and the real estate sector. Nobody knows what interest rates or the exchange rate of the peso will be like in the next months or years, or the impact that market volatility will have on demand. These factors will impact the market, but it is the medium to long-term vision that allows us to continue our plans. Year by year, or quarter by quarter, we will make the adjustments necessary to balance out the rise in commodity prices, the US dollar and interest rates. It is difficult to tell how much concrete or steel will cost, we can only predict. If the economy is healthy, some projects can be finished in four to five years, but in a slower economy they could take another two to three years to complete.
Q: What factors did you take into consideration when choosing projects?
A: The sector is aware that there is a residential deficit, especially in areas such as Santa Fe, and that it has become complicated to find good land. Therefore, we will continue to develop well-located residential projects where we have been able to acquire land. There are many cities with big demand for commercial developments. Large urban hubs such as Mexico City have land shortages, increasing the demand for mixed-use spaces that combine housing, commercial and corporate developments. Mexico City also has a surplus of offices spaces for rent. However, there are many investors looking to make medium to long-term investments in office spaces. Of our three office projects, two will offer offices for sale.
Q: Rental housing is growing rapidly in Mexico. How will Grupo Copri adapt to the preferences of future generations?
A: We are not in the rental housing business but we do recognize that it is a growing market. We are considering selling parts of our residential projects to rental housing experts. Millennials are not so different from past generations; it just takes common sense to profile them. People continue to look for nice neighborhoods that are close to their jobs and to their recreational activities. Of course, they demand that technology is well integrated into their day-to-day activities, which is why we are incorporating it into our developments. Companies must always be aware of emerging trends and be prepared to improve the quality of life of consumers.
Q: How has collaboration between the government entities and developers improved?
A: It is crucial that projects are developed in cooperation with government authorities and through the ADI, we have been able to work more closely together. It is extremely important that we as developers understand the problems and demands of both the government and a project’s neighbors. Grupo Copri’s philosophy is to be involved in developments that benefit the neighbors and that are in line with the government’s growth plans. Projects must have a positive impact on the surrounding area and contribute to a better quality of life of its clients. We take advantage of the infrastructure that already exists and contribute to the improvements that are needed. All players must understand this because it is the only way in which we will create a win- win situation for all involved.
Q: What states or cities have the highest investment potential in the next two years?
A: Queretaro without a doubt continues to grow, although there is speculation that it will expand at a slower rate than in past years. Quintana Roo, Playa del Carmen and Cancun are also growing at a rapid pace. Competition is growing stronger and new developers are entering the arena each year, which is why we must continue to create sustainable developments that improve our client’s quality of life. Our next big projects are the Encinar and Sky Offices in Mexico City, Mision del Parque in Queretaro and Lunamar in Playa del Carmen.