GE bullish on Mexican, Brazilian real estate
NEW YORK (Reuters) - General Electric Co. (GE.N) is increasing its real estate investments in Mexico and looking to enter the Brazilian property market in a bid to increase its exposure to those growing Latin American economies, a top executive said on Tuesday.
"We see Brazil as maybe the next Mexico," Joseph Parsons, president of North American equity at GE Real Estate said at the Reuters Real Estate Summit in New York. "The country is stabilizing; the government is proactive and business-oriented; it has enormous natural resources; it has a growing middle class; it has a lot of positive dynamics."
Parsons said GE is starting to recruit its Brazilian real estate team, but declined to provide details on the company's investment goals in that country.
Brazil's economy has been on a strong growth path of late, with a government-linked think tank forecasting 4.3 percent gross domestic product growth this year and foreign investment on the rise.
In Mexico, where GE Real Estate has operated for 10 years, the company plans to invest about $400 million in industrial space over the next three months, Parsons said.
"We're seeing more job formation there and more jobs coming to Mexico," Parsons said. "They continue to upgrade their manufacturing capabilities; they continue to invest in education ... You have a growing middle class and more opportunity."
The Mexican government expects GDP to rise about 3.3 percent this year. Businesses face a possible rise in taxes as new President Felipe Calderon seeks to plug budgetary gaps.
In addition, GE is participating in a project to build new retail centers, anchored by grocery stores, in Mexico.
"We're providing what we would call world-class retail stock to a market that's undersupplied," Parsons said. "We're picking our niches and we're participating in the growing middle class."
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