Latin American real estate industry during the coronavirus pandemic vary by subsector. International subsectors, such as manufacturing, as following the recovery trend of the global economy, while domestic subsectors are considered to be more seriously affected. The development and financial results of companies in the real estate sector in Latin America during second-quarter. Real estate oriented to the industrial subsector was resilient, while operations oriented to the commercial subsector confirmed a greater vulnerability during the pandemic.
Effects are expected to be manageable for most rated shopping mall companies in the region, despite significant cash flow reduction expected in 2020. A gradual return to near-normal operations for shopping mall issuers in the region in second-half 2020 and throughout 2021 in our base case assumptions. A regional GDP contraction of 8.2% in 2020 before growth returns next year with an expansion of 4.1%. Liquidity will be a key factor in helping the sector navigate the crisis. Fitch views the sector’s liquidity as adequate, on average, reflected in issuers’ cash positions, well-staggered debt maturity structures and relatively low debt maturities in 2020-2021, significant unused committed lines, and high unencumbered assets.