Peru’s shopping mall industry is expected to experience positive growth and low vacancy rates throughout 2014 and 2015, Fitch Ratings has said.
In a report released Thursday, the rating agency views as solid long-term fundamentals for the retail sector in the Andean nation due to the country’s strong economic growth.
“Peru's favorable economic environment has led to an increase in disposable income, which in turn has supported continued growth in retail sales and an increasing need for leasable area,” Fitch said.
According to the agency’s study titled “Peruvian Shopping Mall Industry Dashboard”, the market dynamics should continue attracting investments, which between 2010 and 2013 was estimated at US$ 1.4 billion.
Furthermore, Fitch noted that interest in the sector remains high as capex (amount of capital expenditure) in new shopping malls is anticipated to be around US$ 500 million in 2014.
The sector's healthy occupancy rates reflect an underpenetrated industry while the number of shopping malls in Peru has double since 2010 due to investments, fortmilltimes.com reported.
Nevertheless, the Andean nation’s mall industry maintains low penetration rates with vacancy rates raging from 3 percent to 4 percent between 2011 and 2014 due to a limited supply of leasable area.
The top five main players made up approximately 60 percent of Peru's total GLA. The sector concentration of a few players, most of them leading retailers, is not expected to change in the short to medium term.
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Published: 7/4/2014