By Robert L. Scheier
Victor Lopez-Beltran is director of Latin America Research for CB Richard Ellis based in Mexico City. Nearshore Americas spoke with Victor recently about real estate, nearshoring trends and the best BPO bargains in the Americas.
What are you seeing in Mexico, and in Latin America, overall?
Lopez-Beltran: In Mexico five or six years ago, Monterrey was a more suitable place for companies to put their BPO or their call centers, because neither Guadalajara nor Mexico City had the labor force to (meet) those needs. Now, it’s everywhere.
Elsewhere, a lot of different countries in Central America are being looked at. We’ve had requests for Honduras, for Costa Rica, and a lot for Panama. Panama is very attractive right now, both for reasons of cost and supply of skilled labor. There have been a few requests for information about South American countries, such as Columbia (where the U.S. just reached a long-stalled trade deal.) Ecuador, on the other hand, is not very business-friendly right now. They just expelled the U.S. Ambassador for the third time in three years.
How about Brazil, and the prospects we hear for its growth?
Lopez-Beltran: Brazil has the same problem India has – it’s a 12-14 hour plane flight from the U.S. Language is an issue as well, because the further you are from the U.S. the less likely it is many people will speak English.
Where are today’s “bargain” areas?
Lopez-Beltran: In central Mexico, the state of Guanajuato has inexpensive labor, great utilities, Web connectivity and lots of manufacturing plants, as well. Both cost-wise and labor-wise, it’s one of the most attractive areas. And, of course, there’s Panama.
How much is security an issue?
Lopez-Beltran: Colombia had a very huge security issue for 20 years, up to seven or eight years ago when they tried to get rid of that image, and were very successful at it. Now, Colombia represents one of the largest investment sites in Latin America.
In Mexico, the maquiladora area, near the U.S. border, has a lot of IT and BPO installations, and that’s one of the areas with the most severe security issues. I haven’t heard, personally, their intent to move out of those areas. But I also haven’t heard they are expanding. Overall in Mexico, security is an issue, but it isn’t stopping decisions on moving or investing, at least from what we know.
Any other tips or trends?
Lopez-Beltran: Clients always ask about the size, location, and price of real estate per square foot or per meter. But when they talk about BPO or call centers, labor indicators are what we’re asked about the most. We even have a research area within the company focused on labor trends – and we’re a real estate firm! Sometimes, by reducing their labor costs, BPO or ITO firms can be more successful at reducing costs than through site or building selection.