Published on and written by Cyril Jarnias
Giant logistics port on the Pacific, strong emerging economy, e‑commerce boom, tourism growth, and a new urban middle class: the equation is currently favorable for commercial real estate in Peru. Offices, warehouses, logistics centers, retail spaces, industrial parks, or mixed-use assets: the entire segment is in an expansion phase attracting increasing local and international capital.
This development is based on strong economic fundamentals, targeted tax incentives, modern investment vehicles, and a pipeline of strategic infrastructure. However, it comes with real risks: political instability, administrative complexity, land tenure informality, as well as vulnerability to seismic and climate risks.
Therefore, rather than a simple real estate “El Dorado,” the Peruvian market resembles a complex playing field, where the best opportunities are seized with a highly selective approach, thorough due diligence, and a good understanding of local dynamics.
A Commercial Real Estate Market in Full Expansion
Peruvian real estate is emerging from several rollercoaster years: rapid boom between 2010 and 2014, adjustment phase until 2018, pandemic shock, then vigorous recovery starting in 2023. The sector ended 2024 with a spectacular 30% growth, according to the Confederation of Real Estate Developers (ex‑ASEI), driven by better supply-demand alignment, more favorable financing conditions, and the recovery of formal employment.
Construction, which represents about 5.4% of GDP, is expected to generate over 50,000 additional direct and indirect jobs in the coming years.
Rental yields confirm the segment’s appeal. Nationally, gross rents are around 5.9 to 6% on average, but commercial assets perform significantly better: retail spaces offer gross yields between 8.2 and 9%, for estimated net yields between 6 and 7.5%, a high performance on a Latin American scale.
A simple comparative glance shows the profitability differential between residential and commercial:
| Segment | Estimated Gross Yield | Estimated Net Yield |
|---|---|---|
| Standard Apartment (2 rooms) | 6.5 – 7.5 % | 4.5 – 5.5 % |
| Lima Premium Apartments | 5 – 7 % | 3.5 – 5 % |
| Commercial Real Estate (offices, retail) | 8.2 – 9 % | 6 – 7.5 % |
| Mixed-use Assets (residential + retail) | 7 – 8 % | 5.5 – 6.5 % |
This yield premium, combined with appreciation prospects of 5 to 9% per year in the most dynamic areas, explains why institutional capital is starting to structure around specialized platforms, like Fibra Prime, the country’s first FIBRA (Peruvian REIT).
An Emerging Economy with Clearly Identified Drivers
Commercial real estate cannot be analyzed without looking at macroeconomic fundamentals. The country boasts a GDP of around $250 to 268 billion, controlled inflation around 3.2%, and a BBB+ credit rating with stable outlook from Standard & Poor’s. The currency, the Peruvian sol, has experienced episodes of volatility but within a generally prudent monetary framework.
Over 76% of the population lives in urban areas, meaning about 27 million city dwellers out of a total of 33.7 to 34 million inhabitants. Lima, a metropolis of some 11.3 million people, concentrates one-third of the population and the majority of tertiary, industrial, and logistics activity.
The diversification of the economy, beyond mining, toward agro-export, tourism, manufacturing, and services, generates demand for specialized infrastructure. This includes cold storage warehouses for blueberry and grape exports (whose combined value exceeds $3 billion), logistics hubs for e‑commerce, modern offices for financial and tech services, and shopping centers to meet the needs of an expanding middle class.
Tourism, growing at 7 to 9% per year, is another key driver: over 2.1 million international tourists visited the country between January and August 2024, nearly a million visitors accessed Machu Picchu in 2023, and cities like Cusco, Arequipa, or Iquitos are seeing a proliferation of hotel, retail, and service projects. Commercial real estate follows this wave, with needs for hotel, restaurant, distribution, and leisure spaces.
Lima, Center of Gravity and Market Laboratory
Lima remains the main nerve center for commercial real estate. This is where the majority of Class A and A+ offices, large shopping centers, modern logistics parks, and institutional investors are concentrated.
Offices and Business Districts
The office market has experienced several cycles. After a long period of near-zero vacancy (around 1%), the arrival of many new projects caused a rise in vacancy rates and downward pressure on rents. Today, the market is rebalancing, with opportunities for investors able to position themselves on well-located quality assets.
In the most sought-after areas like San Isidro or Miraflores, cap rates for A/A+ class office buildings range between 8 and 9.5%, an attractive level for “prime” locations in a regional capital.
Rents illustrate the internal hierarchy of the Lima market:
| Office Zone (Lima) | Average Monthly Rent (USD/m²) | Market Profile |
|---|---|---|
| West San Isidro | ≈ 17.5 | Historic business district, strong corporate demand |
| Magdalena | ≈ 14.4 | More affordable, developing area |
| Lima Average (Class A) | ≈ 15.9 (historical data) | Reference level for prime and quasi-prime |
Beyond isolated buildings, integrated urban projects are emerging, like the Master Plan for the Las Begonias financial district in San Isidro: 73 hectares reimagined to create a more sustainable and accessible district with offices, retail, public spaces, and soft mobility. Led by Urbanova Inmobiliaria and the Sasaki agency, this type of redevelopment highlights a new generation of “core” assets that combine strategic location, mixed-use, and an ESG approach.
Retail and Shopping Centers
The Peruvian retail market has long been dominated by large shopping centers in Lima and major regional cities, built by groups like Parque Arauco or Real Plaza. Appetite for this type of asset remains, but the segment is diversifying: high street in certain neighborhoods, convenience formats, strip centers in expanding areas.
Street retail rents in Lima reflect this diversity:
| Retail Location (Lima) | High-End Rent (USD/m²/month) | Comment |
|---|---|---|
| La Victoria (prime corridor) | Up to 80 | One of the most expensive retail high streets in the country |
| Lima Average (high street) | ≈ 27 | Reference level |
| Ventanilla (Callao) | ≈ 16 | More accessible level on the periphery |
For investors, storefront retail in high-traffic areas (Miraflores, Barranco, certain corridors in San Isidro or La Victoria) or spaces within well-anchored shopping centers offer high yields (7 to 9% gross) with demand driven by domestic consumption and tourism.
Logistics and Warehouses: The Current “Sweet Spot”
If one segment stands out today, it’s logistics and warehouses. The logistics market is considered under-equipped: only about 15% of the warehouse stock meets Class A standards. Lima and Callao concentrate nearly 55% of the country’s logistics activity, two-thirds of container traffic, and the majority of modern warehouses.
Several factors fuel structural demand.
– E‑commerce explosion, with estimated annual growth of over 40% and penetration reaching nearly 28% of the urban population;
– Growth of agro‑exports (blueberries, grapes, avocados…) driving demand for cold chain;
– Massive infrastructure program: modernization of Callao port, development of the automated mega-port of Chancay by COSCO ($3.4 billion), new terminal at Jorge Chávez International Airport, road and rail corridors.
The average rent for Class A logistics centers in Lima was around $5.55/m²/month.
The example of Parque Logístico Callao, developed by Logistic Properties of the Americas (LPA), illustrates the segment’s potential: a park of over one million square feet, located a few hundred meters from Lima’s new airport, benefiting from EDGE and LEED Gold certifications, with 100% occupancy in the first phase, over 85% pre‑leasing on spaces under construction, and dollar-indexed leases signed with consumer goods and pharmaceutical giants. The project is expected to support some 1,000 permanent jobs and generate significant economic impact at the scale of the Callao region.
In a market where demand for “last-mile” in Lima is structural and where logistics corridors connecting mining, agricultural, and port areas are strengthening (Port of Chancay, bio‑oceanic corridor, modernized mineral ports), well-placed logistics parks along the Pan‑American Highway or near port and airport hubs constitute one of the most promising asset classes.
Beyond Lima: Rise of Intermediate Cities
While Lima still dominates the landscape, some of the best opportunities are now found in so-called intermediate cities. The decentralization of real estate investment is a recurring theme, fueled by growth in domestic tourism, new infrastructure projects, and the search for higher yields with lower entry tickets.
Markets to watch:
Overview of Peru’s main cities and regions with attractive investment prospects, based on their economic dynamism and growth potential.
Second-largest city, industrial and logistics hub of the south (copper, quinoa, agricultural exports). Estimated commercial rental yields between 6 and 8% with annual appreciation of 5 to 7%.
Region driven by agribusiness and road and port investments. Asset values 20 to 40% lower than Lima, with faster rent and price growth.
Supported by agro‑export, commerce, and proximity to booming tourist beaches.
The combination of international tourism and a quality accommodation deficit creates fertile ground for hotel, tourist retail, and office projects.
Boosted by domestic tourism and upcoming infrastructure projects.
For an investor, these secondary markets combine three advantages: lower cost per square meter, still limited developer competition, and accelerated appreciation potential when infrastructure (roads, ports, airports, metro) materializes.
A Legal and Tax Environment Relatively Favorable to Investors
Legally, the country sends a clear signal: foreign investors benefit, in most cases, from the same property rights as nationals. The Constitution guarantees protection against expropriation, non‑discrimination, and free repatriation of capital and profits. The only significant restrictions concern the acquisition of properties located within 50 km of international borders, subject to authorization for national security reasons.
The state has also established instruments to secure the investment environment, such as Legal Stability Agreements, which can guarantee for ten years the stability of the tax regime applicable to an investment exceeding certain thresholds, as well as the freedom to transfer capital and dividends.
Commercial Real Estate Taxation
The tax framework is dense, but several parameters are decisive for an investor:
Main taxes and fees applicable to real estate transactions and holding for residents and non‑residents.
Corporate tax is 29.5%. Non‑residents are taxed at 30% on gross rental income.
Sale by a non‑resident: taxation at 30%. For resident individuals: taxation at 5%.
Commercial leases are subject to an 18% VAT (IGV).
Transfer tax (Alcabala): 3% on value > 10 UIT. Notary and registration fees (SUNARP): ~0.7 to 1.5%.
Municipal property tax (Impuesto Predial): progressive, from 0.2% to 1% of the cadastral value.
These costs mean buyer-side transaction fees typically represent between 4 and 6.5% of the purchase price. To this are added agency commissions (often 3 to 5%, borne by the seller) and legal fees (1 to 2% recommended for a foreign investor).
FIBRA and FIRBI: Game‑Changing Vehicles
One of the most important developments for commercial real estate investment is the rise of collective vehicles like FIRBI (real estate income investment funds) and FIBRA (real estate income securitization trust, the local equivalent of REITs). These structures, regulated and supervised by the securities regulator SMV, allow pooling portfolios of assets (offices, logistics, retail, hotels, industrial) and open commercial real estate to individual and institutional investors, both local and foreign.
Law 31650 extends until December 31, 2026 a preferential tax regime for individual investors in certain vehicles (FIBRA/FIRBI). It includes a reduced tax rate of 5% on distributed income and a deferral of taxation on capital gains and transfer tax upon contribution of a property, these taxes only being due upon the sale of the asset by the fund or the transfer of shares.
The entry of IFC, the investment arm of the World Bank, with a commitment of up to $40 million in Fibra Prime, is a strong signal: it validates the FIBRA structure as an investment product and helps develop the depth and transparency of the real estate capital market. Fibra Prime’s portfolio, approximately $200 million, is currently diversified between offices (62%), logistics (26%), and retail (12%), with an expansion strategy targeting Class A offices and industrial warehouse conversions.
For an investor who does not wish to manage an asset directly, these vehicles offer indirect access to commercial real estate, with better liquidity, framed governance, and optimized taxation.
Financing: Credit More Accessible, but Foreigners Often Stay in Cash
Access to credit has improved in recent years, thanks to rising formal incomes and a relative drop in interest rates. The average bank interest rate was around 7.44% in mid‑2025. The mortgage market continued to grow at a double‑digit pace in the past, even during economic slowdowns, with relatively contained default rates.
This is the percentage of foreign investors who still purchase real estate in cash, due to difficulties accessing local financing.
This predominance of cash has a direct impact on net yields: debt leverage, which could increase return on equity, is limited for foreigners. Conversely, the absence of debt reduces financial risk, a point not to be underestimated in a sometimes volatile political and macroeconomic environment.
Structural Trends: E‑commerce, Digitalization, and Sustainability
Peruvian commercial real estate is being transformed by three major trends: the rise of e‑commerce, accelerated digital adoption, and the increasing consideration of ESG criteria in asset design and management.
E‑commerce and Logistics Revolution
The soaring growth of online sales (approximately 42% per year) has a direct impact on demand for warehouses, urban distribution hubs, and cross‑docking spaces near major highways like the Pan‑American. The courier‑express‑parcel (CEP) segment is expected to show growth of over 6% per year for the 2026‑2031 period, while cold storage space is also growing steadily (CAGR around 5.6%).
Major international logistics companies and local operators are strengthening their presence, increasing demand for quality space. Strategic logistics parks, especially near the ports of Callao and Chancay, as well as Jorge Chávez airport terminal, are particularly sought after.
Digitization of Operations
The adoption of digital solutions – real‑time tracking platforms, warehouse management systems (WMS), IoT for energy control, portfolio management software – is progressing rapidly. It is estimated that the use of advanced technologies has increased by about 45% among leading logistics players.
In real estate itself, the rise of home automation (“smart home devices” market projected at over $1.2 billion by 2032) and the use of virtual tours are changing how buildings are designed, marketed, and operated. Professional tenants are increasingly sensitive to connectivity, integration of smart solutions, and digital space management tools.
The Green Shift: EDGE, LEED, and High‑Efficiency Buildings
Sustainability is becoming a true strategic pillar for real estate investors in Peru. The country has committed to reducing its greenhouse gas emissions by 20% compared to its 2030 scenario, or even 30% with international support. In this context, the real estate portfolio – a major consumer of energy and water – is called upon to evolve.
The Peruvian Green Building Council lists over 200 projects certified or registered under environmental standards.
On the institutional investor side, the IFC is supporting Fibra Prime through its GRIP (Greening Real Estate Investment Portfolios) program to align the portfolio with decarbonization goals and deploy EDGE certification on about ten properties. International experience shows that green buildings lease faster, at slightly higher rents, and have lower vacancy rates. In the long run, a discount can therefore be expected for “brown” assets, reinforcing the interest in targeting certified or easily convertible buildings from the outset.
Yields, Valuation, and Performance Scenarios
To evaluate opportunities, it is useful to combine rental yields and appreciation prospects. In the Peruvian commercial segment, several orders of magnitude emerge:
Overview of typical yields for different segments of the commercial and industrial real estate market in Peru’s main areas.
Typical gross yields of 7 to 9%, net of 5.5 to 7.5% after expenses, taxes, and management.
Cap rates of 8 to 10% for well‑established Class A assets in Lima and Callao. Lower leasing risk in top parks (vacancy rate < 7%).
Gross yields of 7 to 8% for assets combining residential and ground‑floor retail, for example in Miraflores or San Isidro neighborhoods.
Regarding capital gains, five‑year projections place annual appreciation at:
| Market / Segment | Estimated Annual Appreciation |
|---|---|
| Premium Districts of Lima | 5 – 7 % |
| Developing Districts in Lima | 7 – 9 % |
| Arequipa | 5 – 7 % |
| Cusco & Sacred Valley | 6 – 8 % |
| Northern Beaches (Máncora, Punta Sal) | 8 – 10 % |
Combining a net yield of 6 to 7% and an appreciation of 5 to 8%, the best commercial assets can achieve annualized total returns in double digits, provided of course risks are well managed (vacancy, currency, taxes, construction, tenant quality).
Obstacles and Risks: A Market to Approach Without Naivety
The picture would not be complete without a clear‑eyed inventory of the risks. The real estate market remains largely lightly regulated, with a high degree of informality. The absence of a fully integrated cadastre, the sometimes insufficient quality of land registries, and the complexity of titling procedures create a real risk of disputes, title usurpation, or late claims. Available data mentions, for example, a rise of over 22% in cases of sellers providing misleading information on properties offered.
The country is marked by chronic political instability, with a succession of governments, recurring social conflicts (especially in mining areas), and a high level of corruption (rank 101/180 according to Transparency International). These factors can lead to project delays, occasional blockages of transport corridors (e.g., Southern Mining Corridor), and unpredictable changes in taxation.
In addition to this:
– Seismic and climate vulnerability (El Niño) of the Pacific coast;
– Volatility of the sol against the dollar, which affects the real value of rents for a foreign investor;
– Difficulty for foreigners to access credit;
– The sometimes extreme slowness of justice and local administration (building permits, operating licenses).
These risks do not eliminate the opportunities, but they impose a rigorous methodology: thorough due diligence (title verification with SUNARP, urban compliance, tax status, absence of liens or disputes), use of reputable bilingual real estate lawyers, careful selection of local partners (developers, managers, brokers), geographic and asset type diversification, use of adapted structures (SAC, FIBRA, FIRBI) to optimize governance and taxation.
Which Segments to Prioritize Today?
By cross‑referencing market data, yields, public policies, and long‑term trends, several segments stand out for the commercial real estate investor in Peru.
Class A Logistics and Industrial
With a still limited modern stock, demand driven by e‑commerce, agro‑export, and new ports, and attractive cap rates, logistics parks are becoming a cornerstone of many investors’ portfolios. Hubs around Callao, the future Port of Chancay, mining corridors, and major road axes offer potential for sustained rent and value growth.
Prime Offices in Consolidated Districts
San Isidro, Miraflores, or parts of Barranco and Surco remain choice locations for Class A offices, particularly in mixed‑use complexes offering retail, services, and green spaces. The key here is selectivity: favor well‑designed, certified buildings close to public transport axes (expanding metro and BRT networks) and capable of adapting to new work habits (flexible spaces, divisible areas, optimal connectivity).
Retail in High‑Traffic Nodes
Well‑located street‑front retail in the main commercial corridors of Lima and large regional cities continues to offer high yields, especially in areas of high pedestrian and tourist density. The rise of domestic consumption and domestic tourism in cities like Arequipa, Trujillo, or Cusco supports the creation or renovation of shopping galleries and retail parks.
Hospitality and Tourism‑Oriented Assets in Key Hubs
Without being a purely commercial segment in the strictest sense, hospitality and leisure complexes in Cusco, Arequipa, Iquitos, Paracas, or the northern coast offer opportunities for co‑investments or equity participation via dedicated vehicles, fueled by sustained growth in tourist flows and a qualitative deficit in offerings in certain niches (high‑end eco‑lodges, integrated resorts, convention centers).
Investment Platforms (FIBRA, FIRBI, Specialized Funds)
Finally, for many investors – notably international institutional or family offices – the most effective route is to enter the market via existing FIBRAs, FIRBIs, or real estate funds, benefiting from local teams, sourcing and management capabilities, and an optimized tax framework. The example of Fibra Prime, supported by the IFC, suggests that new platforms could emerge around specific themes: green logistics, neighborhood retail, sustainable offices, hospitality, etc.
Conclusion: A Promising Market for Disciplined Investors
Investment opportunities in Peruvian commercial real estate are real, significant, and multiple: yields above the regional average, attractive appreciation prospects, undersupply in key segments (modern logistics, certified offices, retail in secondary cities), a legal framework generally favorable to foreigners, sophisticated investment vehicles backed by international institutions.
At the same time, the market remains marked by a series of weaknesses – political, institutional, land tenure, environmental – which require a prudent and professional approach. Successful investors will likely be those who know how to:
To succeed in real estate investment, focus on strategic locations directly linked to major infrastructure projects. Prioritize assets or portfolios that incorporate sustainability criteria, a factor becoming essential for long‑term value. Rely on top‑tier local partners and advice to navigate the markets. Finally, accept a degree of administrative complexity and volatility, in exchange for a yield premium and growth potential.
From this perspective, commercial real estate in Peru is not a simple exotic diversification, but a potentially structuring component of a Latin American strategy, provided it is approached as a demanding emerging market: rich in opportunities, but reserved for well‑prepared investors.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
