The next step for Quintana Roo: Economic diversification

Today, we can safely say that tourism activity dominates the economic landscape in Quintana Roo: it has been strengthened over the years with the emergence of destinations that represent an alternative to the cities of Cancun and Playa del Carmen.

Novel destinations such as Tulum, Bacalar and Mahahual have made of Quintana Roo one of the most attractive Mexican states for both national and international tourism. As such, it is not surprising for the tourism sector to have reached extraordinary maturity here, with its sphere of influence exceeding even that of the Mexican Caribbean and reaching almost the entire country, that way allowing for economic diversification, a matter of utmost relevance for the future development of the state.

Building on the success of hotel investments in this state, services, materials and equipment have today reached over to other tourist destinations such as Los Cabos, Huatulco, and as far as the Dominican Republic. The local know-how, developed as a result of these successful operations, has encouraged the export of different goods and services such as food, furniture, industrial equipment for inverse osmosis (desalination equipment), pre-insulated piping, legal & managerial services, cleaning services, audiovisual services, and many other.

Quintana Roo is clearly now the home of a very own economy and manufacturing industry, rapidly expanding over to other destinations.

This growing diversification will benefit from the strategic presence of the Cancun International Airport, directly connected and at the same distance from cities such as Los Angeles and New York, Bogota and Houston, Atlanta and Panama, CDMX and Santo Domingo, Guatemala and Miami, and more. This airport is also a direct entry point for Europe.

On the other hand, a new economic approach is also needed; an approach focused on the corporate side of things that can address not only regional needs, but also national and international needs, including all of Latin America and the Caribbean. Such an approach would open the door to new real estate investment in Quintana Roo that would accommodate its emerging business economy, this way further developing and diversifying other economic hubs, so as not to depend so heavily on tourism and the hospitality industry.

In several ways, there are certain parallels between Cancun and Miami: both cities are located at a peninsular end in the Caribbean, both were conceived from their inceptions as tourist hubs, located in once-inhospitable areas lacking communication channels at the time. Miami is today an important financial axis wherein large companies operate for the US, Mexico, the Caribbean and South America. It is clearly not necessary to reinvent the wheel, it is just a matter of replicating and modelling after success stories.

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Riviera Maya, will it grow upward or outward?

All over the world, it is accepted and expected for large cities to grow vertically. But that is not so much the case in small and mid-sized cities, where development usually happens horizontally. Hence, it is usual that, as the latter expand, different visions will arise regarding the direction that urban growth should take: apartments in tall buildings vs. houses.

The present short piece aims at raising awareness on this matter, as it relates to a destination such as Riviera Maya. Although this destination has a small population and has shown mainly horizontal development in housing, or in the form of low-rise apartment and hotel complexes, today it faces an accelerated population growth and with it the chance to switch to a well-planned vertical growth.

Would a pair of modern and iconic towers be well-received in Puerto Morelos, Playa del Carmen or Tulum? For many, such would be a bad bet, yet for others something natural and necessary. Cancun already has several towers that have had good acceptance among the population; is it because it is considered “an actual city”? Or is it because for years several tall hotel buildings have been built there? Towers are currently under construction in Merida, and even planned communities include land allotted for height housing in their master plans, as they aim at offering a diverse and comprehensive concept.

The current trend all around the world is to build thinking vertically, due to the advantages this represents. Vertical growth is the answer to many practical issues, among them the optimization in the provisioning of commodities such as drinking water, drainage and electricity. It also concentrates populations in smaller radiuses, this in turn resulting in savings in commuting times and fuel, thus reducing pollution levels.

Although there are urban planning criteria that serve as a decision-making basis for designing cities, it is of utmost relevance to take into account the specific characteristics of a given destination, including the tastes and needs of future buyers, which should be considered by the developers over the permits they can get. Underground rivers, the footprint in the jungle, existing ecosystems, wildlife habitat, and natural hazards such as hurricanes are some of the other variables that should be factored in when it comes to vertical development in the region.

Density can be another advantage. By transforming a horizontal project into a five-levels vertical one, on the same land and with the same number of units, its environmental footprint will diminish without a doubt. This will double the space available for green areas and social interaction. Now, if the buildings were even higher, the free construction area would logically increase even more. But, how many levels are optimal? Vertical projects in new large developments (100+ hectares / 247+ acres) carry with them a huge responsibility: to keep balanced the total number of houses, square meters and levels to be built, and most importantly, the environmental footprint generated. This in order to ensure that a high percentage of land is destined to conservation and spaces of social interaction.

Riviera Maya is in perfect time to define the type of growth it will have. The most important factor to consider when it comes to new developments is and will remain to care for the environment, both flora and fauna. Vertical projects can be the answer to the momentous growth in the region, always that balance is maintained between the environmental footprint they generate and the surface allocated to green and conservation areas.

Where will your money produce the most value?

By RAÚL LOPEZ G. – Director at SOC Peninsula – Financial Advisors

Saving is essential if we are to achieve financial ease in the future and meet short- and medium-term goals, be it a trip or big business, projects that always start with good savings. It is also possible to allocate the money to investment funds destined to pay for our children’s universities, or create generational wealth by investing in real estate, where added value and producing cash flow are main characteristics. The question is, if we know that saving can help us and give us the financial ease we aspire to, why do not we save for that purpose?

Saving is a habit that can only be achieved through discipline (setting aside a percentage of our monthly income), planning (being able to foresee the future to a reasonable extent) and responsibility (claiming ownership on the wellbeing of our people). Saving is something we have to learn and practice day by day, identifying family or personal priorities, and knowing what results will all those resources for which we work constantly give us at the end of the day. Some of those resources will be spent exclusively on leisure and that is fine, but do you believe it is only for the here and now that we work? What about the future? What can we do to multiply the part that we save, and then make investing decisions?

Oftentimes we think that we can make the best decisions alone, but nobody is an expert in everything. When it comes to caring for and maximizing money, we must choose a professional, specialized financial advisor to guide us on what is best for us and our lifestyle, taking into account whether we have children or not, and given the case, their ages, so as to plan tuition payments; as well as if we have a house of our own or are looking for it. Did you know that the bank can lend you up to 90% of the value of a property and, if its location is good, you can market it for vacation rentals, so the tenants practically pay the mortgage, while the property grows in added value and generates cash flow? If we seek financial freedom and not having to be stuck in an office all our lives, we must start investing and planning for the future, creating wealth through real estate in high added value areas, such as the Riviera Maya. We must keep in mind that professional advice is vital for our savings to increase and multiply.

Investment advice

If you already decided to invest in real estate, consider the following:

  • Which is the city or area of greatest growth and demand in the country?
  • Approach the experts if you need mortgage credit, so that they not only process the credit but also act as advisors, identifying your financial profile in order to facilitate the credit with the best conditions for you.
  • Hire a real estate professional agency who really knows the market and can get you excellent investment options.

We wrap this up with the following quote by Robert Kiyosaki: “Do today what you want for your tomorrows”.

 

GRUPO CUMBRES, A REAL ESTATE PHENOMENON

Eduardo Martínez, General Director at Grupo Cumbres, talked to us about the impact that the group has had on the modernization of the city of Cancun, mainly through the development of comprehensive concepts, both residential and commercial, able to provide a high-standard, community lifestyle.

 

  1. What is the philosophy of Grupo Cumbres?

Grupo Cumbres is focused on residential/mixed development, with avant-garde, functional and high-quality construction projects, always prioritizing sustainable development in environmental balance. We present comprehensive concepts that meet the needs of people, offering the highest quality of life, security and commitment to the community, generating a framework of coexistence among neighbors that results in added value. That is our philosophy, our passion.

 

  1. What are the factors that make Grupo Cumbres an outstanding company and different from its competitors?

There is a strong commitment on the part of our company’s employees, who feel and know themselves part of a large family; everyone has a sense of belonging and feel great pride in being members of the group, meaning that everybody gives their best and every area makes extraordinary efforts. It’s worth mentioning how fortunate we are to have among the members of our board and technical committee Mr. Moisés El-Mann Arazi – founding member of the company and Fibra Uno – who contributes his innovative vision and ideas, as well as Eduardo Martínez Ferraez – founding member of the company and local businessman – who contributes his inexhaustible dedication and energy. These factors make the company and its collaborators a unit and a nucleus, moving forward in the same direction and always seeking innovation, demanding the best from themselves.

 

  1. More than 10 years after launching Residencial Cumbres to the market, what has been its impact in terms of urban development in the city?

It has certainly been a turning point in the market, setting the pace in the modernization of the city, through an urbanization that follows the highest quality standards.

In these past 10 years, owners have built the house of their dreams in Residencial Cumbres, where more than 1,000 families already live and more than 5,000 people interact daily.

Likewise, we have also created a safe way for families to coexist, achieving interaction and integration between their owners and a pleasant way of living, fostering new experiences every day. Living in Residencial Cumbres is overall an experience!

 

  1. What can you tell us about the Group’s most recent project, Río Residencial? What is it that sets it apart?

Río Residencial is a new project that benefits greatly from our past learning experiences derived from previous residential developments. Hence, it has more amenities, such as a clubhouse, paddle and multipurpose courts, gorgeous fountains and water mirrors, an infinity bicycle path, children’s playgrounds and a picnic area. Thus, it has more leisure and recreation areas for a smaller population, complying with a construction regulation that has been improved and updated according to the requests and tastes of future owners.

 

  1. What are the Group’s future projects?

At Grupo Cumbres we love what we do, so our dedication has led to success in every project. Naturally, we will continue to innovate; we will announce our next project in due course.

 

  1. We are witnessing an accelerated development that is taking place in the south polygon area, in Cancun. Is there a market for all these developments or is there risk of a real estate bubble?

In no way do we think that there is a real estate bubble or a risk of creating one. The other way around, we are certain that Quintana Roo, and naturally Cancun, are blessed with opportunities for everybody. We see the annual growth of the city and the state in double digits. Almost 10,000 new hotel rooms are being built in Cancun and the continental zone of Isla Mujeres, as well as another 10,000 in Riviera Maya, all in all 20,000 keys, which speaks of the great growth in the state. Remember that we are the sixth most visited country in the world, and Quintana Roo alone contributes 25% of the total tourism activity in Mexico.

All of this generates great opportunity for jobs, professional growth and migration of qualified people, who will continue to demand top-quality places and life experiences. Without a doubt, we are one of the best alternatives to satisfy that need.

 

Editorial Letter

W

elcome to the first number of LivingTerra, a publication with the mission of establishing itself as a reliable source of information for investors, both national and foreign, interested in the Mexican Caribbean real estate market.

Undeniably, Quintana Roo has gained solid ground as the main destination for tourists in Mexico, mostly concentrating in Cancun and Riviera Maya, a trend that is expected to continue throughout coming years. This has naturally brought about a significant growth in real estate demand and supply for the area. A very interesting array of options for investment is attracting big corporations seeking to develop hotel and tourist complexes, as well as individuals and families who dream of acquiring property by the sea, either for living, holidays, or rental. What is certain is that this destination has become one the most captivating markets for investment, as it has something to offer for every style, need and budget.

With all of this in mind, our main goal with LivingTerra is to provide an insightful read on the rhythm of the real estate market in the Mexican Caribbean; and so we have brought together the very valuable contributions of various experts in the different areas pertaining real estate, whose rich and specialized knowledge in this destination and its possibilities for urban development will skillfully illustrate the landscape for the benefit of investors, so that they can make well-informed decisions and obtain higher returns.

Without further ado, we welcome you to this number of our magazine, in the hope that in its pages and through the words of our guest experts you will find accurate and timely information, for you to discover that valuable investment you’re after.

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