In Costa Rica, real estate investment funds are gaining traction.

According to a November 2013 research by consultants Ernst & Young Global Limited, the private equity business is finally returning to real estate markets after a long recession. They also predicted that the real estate private equity sector would increase in 2014. doha property

While private equity real estate funds are a relatively new market in many parts of Latin America, market conditions in the United States in the early 1990s prompted the creation of “opportunity” funds that took advantage of new development tracks and regions, as well as falling property prices, to acquire real estate assets at significant discounts. Private equity real estate emerged as a distinct asset class at the dawn of the twenty-first century and has seen significant expansion since then.

Private equity real estate funds are gaining popularity in Costa Rica. These funds are self-managed mutual fund asset companies that put their money into residential and commercial real estate projects. There are now 185 private equity funds and 22 fund managers listed in Costa Rica.

While traditional private equity funds have high entrance prices, new fund types in Costa Rica are offering cheap entry charges of $1,500 to $10,000, attracting a large number of new and first-time investors. This sort of collective investment gives management businesses more bargaining power and gives investors more real estate investment possibilities.

Investment funds focused on commercial development, such as strip plazas, have seen consistent expansion in San Jose and nearby cities in the Central Valley. This market has performed remarkably well in recent years, but many experts now believe it is reaching its peak due to excessive growth. Experts predict a period of cooling until present supplies are replenished.

Residential development funds are only just becoming increasingly popular among fund managers, as more of them perceive significant possibilities in residential rental markets throughout the Central Valley and beyond.

Costa Rica’s fastest growing region, Alajuela, was recently confirmed. Alajuela is home to Costa Rica’s primary international airport as well as the country’s leading manufacturing and technological sector. Recent FDI for expansion, including a new Chinese industrial complex, has resulted in an explosion of new growth, attracting the interest of investment funds and development businesses.

Even during the current global slump, the entire Occidente (west) region of Alajuela has enjoyed exceptional growth as a result of this regional expansion. Grecia, Naranjo, Palmares, and San Ramon are the main cities in Alajuela Occidente, all of which have experienced sustained commercial and residential expansion. The residential rental market in all of Occidente has been impacted by this boom, with extremely low inventories and extended waiting lists for housing rentals.

Low rental inventories in Alajuela Occidente, as well as many other areas, have piqued the interest of investment fund organizations eager to diversify their portfolios beyond traditional commercial projects to include residential buildings. As Costa Rica’s international status as a destination of choice for business, investment, travel, and lifestyle continues to increase, industry experts believe that an increasing number of these fund companies will enter the residential rental sector.