Chile Commercial Real Estate

$552 Million worth of Commercial Real Estate to hit the market in Chile

Investors in Chile are facing a potential flood of commercial buildings hitting the market as two major real estate investment funds approach liquidation. Toesca SA and Banchile Inversiones are poised to sell off portfolios worth a combined $552 million following shareholder votes. This move has sparked concerns about a downward spiral in Chile’s real estate market, where low prices have prompted fund liquidations, potentially further depressing prices with increased supply.

Augusto Rodriguez from Toesca expressed confidence in the quality of their assets despite the liquidation, anticipating strong interest. Meanwhile, Banchile faces potential liquidation in December pending a new shareholder vote after rejecting a proposed extension. The anticipated forced sales represent a rare test for Chile’s sluggish real estate sector, which has seen minimal activity due to global economic conditions and high interest rates.

The news of liquidations has unsettled the market, affecting other real estate funds like Independencia SA, which had to delay a bond sale amid uncertainty. Some fund managers are diversifying internationally to mitigate local challenges, with Chilean firms increasingly investing in markets like the US, Peru, Mexico, and Spain. Despite these challenges, sectors like e-commerce distribution centers remain resilient, indicating varied impacts across different real estate segments in Chile.

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