Land Banking Opportunities in Uruguay | Pathfinder International

Monday, December 07, 2009

Rocha has the finest beaches and most pristine coastline in Uruguay

Dear Reader,

Uruguay rarely makes the headlines. There are no natural disasters. The crime rate’s low. It’s safe, stable, and cultured. The infrastructure, from modern airports to roads, is first class.

Uruguay goes quietly and successfully about its business. Last year it made headlines with GDP growth of 8.9%. The country isn’t burdened with debt. Montevideo’s largest shopping mall plans a $100 million expansion, adding to the 200 stores already open.

For many years, the department of Rocha in the east of Uruguay has been a favorite with rich Argentines. East from Punta del Este, it stretches to the border with Brazil. Inland, you’ll find cattle ranches, and sleepy towns, most with populations of less than 1,000. The coast is where the action is. The beaches (the best in Uruguay) here are wide, natural and pristine. The deep-blue water contrasts with powdery golden sands. You won’t find high-rises or all-inclusive resorts…yet.

What you will find are Uruguay’s finest seaside towns. La Paloma fills with tourists in high season, but it’s still a small, friendly beach town. La Pedrera has an up market feel, with large weekend homes beside a sweeping curve of beach. Cabo Polonia is famous for its shifting sand dunes, and bohemian residents.

There’s an abundance of nature reserves and parks in Rocha, many with lagoons ideal for bird watching enthusiasts.

Rocha’s seacoast draws visitors from Uruguay, Argentina and Brazil. Not only are the best beaches in Uruguay here, but also the best land deals in Uruguay are here. If you are interested in land banking or doing a subdivision, this stretch of coast should be on your radar.

Land Costs in Rocha

You can buy beachfront land here for as little as $1 per square meter ($4,050 per acre). Paying $1 per meter, your land will be relatively inaccessible and close to the border with Brazil. Lands close to La Paloma and La Pedrera are more desirable and priced in the region of $4 per meter.

While laws related to subdivision have changed in the past year, the process is still relatively straightforward, transparent and inexpensive. The law requires that you leave 50% of the land free of houses. That’s why developers add in amenities like golf courses, parks, riding ranges and polo fields in subdivisions. You’ll need to figure out how close electricity lines are to your land and what year-round road access is like. Uruguay is abundant with water. Water typically comes from onsite wells.

This stretch of coast is in the sights of a handful of international developers. They have been quietly purchasing large tracts of land. Land values have been slowly increasing but this market hasn’t yet taken off—but I believe it is set to do so. This stretch of coast is the natural extension of Punta del Este.

One planned project is by Argentina’s foremost developer, Eduardo Costantini. Estimated costs for his development run to $350 million. This is the first upscale development in the area, and will raise the development bar in terms of quality and luxury. Included in his project is a bridge over the lagoon at Rocha. A U.S. development group is getting ready to launch a project in this area, too.

My recommendation is to buy close to La Paloma or La Pedrera if you are looking to develop or subdivide. You pay a premium for your land…but let’s face it—paying $4 per meter is still a bargain. The retail market in this area will be much stronger. North American buyers are coming. This area is already extremely attractive to Argentineans.

If you are interested in medium-term land banking, look farther along the coast toward the border with Brazil. This is where you can buy beachfront land for as little as $1 per meter.

Important Land Banking Contacts

If you are looking to land bank or subdivide along this stretch of coast, Juan Federico Fischer ((JavaScript must be enabled to view this email address)) is a guy who can help you out. Juan manages Fischer & Schickendantz’ foreign investment consulting unit, advising both multinationals and individual investors on privatizations, real estate developments, and acquisition of local companies.

In his 13 years as a corporate attorney, Juan has worked in some of Uruguay’s main privatizations (such as Punta del Este Airport, and Montevideo’s port). He advised and is counsel to dozens of multinationals such as Computer Associates, Bechtel Corp., UBS Warburg, Cable & Wireless, HSBC, and Globo of Brazil, and to multilateral institutions such as the World Bank Group.

Today, Juan specializes in real estate developments. He is an advisor to individuals seeking to buy properties and to obtain residency in Uruguay.

For listings of available lands in the Rocha area, contact Faustina Alonso Nicolich: (JavaScript must be enabled to view this email address).

Ronan McMahon