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Sergio Mutis Caballero

COLOMBIA - Real Estate & Construction

Build on This

President, Grupo Valor


Sergio Mutis Caballero is a civil engineer and expert in real estate and construction management. He completed his education at Universidad Industrial de Santander in Bucaramanga, the Universidad del Rosario, and the Universidad de los Andes. He served as professor of architecture and urban and regional planning in the Pontificia Universidad Javeriana and the Universidad Externado de Colombia. In 1984, he founded Grupo Empresarial Valor, and was a member of the board of directors of the Bogotá Chamber of Commerce from 2002 to 2010, serving as president for two of these years. Since 2000 he has shared his expertise as part of the Lincoln Institute of Land Policy in Cambridge, US. He regularly contributes to the most prominent newspapers and television channels in Colombia, and has authored several books on his areas of expertise in recent years.

"Real estate opportunities are the order of the day in Colombia."

According to the National Administrative Department of Statistics (DANE), the number of civil works grew by 18.6% and the construction of buildings by 24% in 3Q2013. What underpins this performance?

Construction is definitely the key instrument of economic growth and the government’s social policy, and Colombia builds 280,000 homes a year. President Santos’ government has established a set of economic locomotives, the most productive of which, especially since his second year, has been construction. According to DANE, construction has two branches, namely civil works and infrastructure, and buildings. Put together, these categories account for 7% of GDP. But if you added to that all industrial and services activities related to construction, the number could reach 20%. That is why construction is so important as a political instrument and generator of employment and economic growth. So how do we arrive at the 20% figure? Whenever a bar of steel, a brick, an item of furniture, or a piece of pottery is made in Colombia, it is added to the industrial sector category when calculating GDP. And when a mortgage or insurance policy is provided, or when the wages on a trust are paid, it is added to the financial services subsector. When architects are hired to design a new building and are paid for their services, that value isn’t added to the construction sector category, but to the services subsector. But were you to take everything related to construction and real estate from the services, industrial, and commercial sector categories and add them to the construction activities category, you could easily reach 18% or 20% of GDP. That is why this sector is so important, not least as a massive generator of employment.

The pace of construction in the Caribbean continues to grow. What are your perspectives on the revalorization of the Colombian Caribbean? What other regions do you think it would be interesting to invest in?

Real estate opportunities are the order of the day in Colombia. Booming entrepreneurial activity exists in each region, with important real estate developers, promoters, and construction companies claiming their share. That said, until 2012, half of the country’s building activity, in terms of the value of real estate sales, was concentrated in Bogotá. Yet as a result of uncertainty surrounding the urban norms developed by the former Mayor of Bogotá, Gustavo Petro, developers with their core activity in Bogotá started looking for opportunities elsewhere, and found them. There has been a great opportunity in the development of malls, housing, and hotels in other cities of social and economic importance. That is the opportunity many construction companies and real estate developers have bought into to sustain their growth. This opportunity, in the specific case of the Colombian Caribbean, shows how Barranquilla—one of the cities with land available at reasonable prices and with good returns—has grown significantly. Cities like Cartagena also continue to develop immensely. In Barranquilla, new hospitals are being built, including a private clinic that supports retirees, foreigners, and the region at large. Santa Marta is also catching the eye of tourism and second-home investors. It has always been a popular destination for family vacations because of its climate and strategic location, but in past years it has been the star of real estate valorization in Colombia.

“Real estate opportunities are the order of the day in Colombia.”

What have been the group’s milestones?

Valor was founded in 1984 as Constructora Valor Limitada and later became Grupo Valor, and today we have a series of companies. Our real estate services company Estrategias Comerciales y Mercadeo SA is specialized in commercializing projects in blueprint. It has over 20 sales offices in Bogotá and showrooms that sell some of the best projects in the Caribbean directly from the capital. Another company is our investment bank, which has a private capital fund that lends financial services and draws in resources to leverage the capital markets for real estate development. As ordered by the Superintendence, we created another company to manage the fund and structure its projects, namely Sergio Mutis Caballero Asociados SAS. We have a company that works with public construction and social interest housing, called Tecnoconstrucciones SAS. And there is another project promoter constructing exclusively for the higher education community. Valor is a construction company that, over close to 30 years, has developed more than 100 residential complexes, participating as a partner and project manager. We began in Bogotá working on middle-class projects, mainly in neighborhoods like Cedritos and Chico, but subsequently developed projects in other cities. We began growing in Bogotá in that specific area; nonetheless, we have built hotels and commercial establishments, and have serviced contracts in all areas of construction. Chiefly, however, we have focused on building middle-class homes. Today, Valor’s principle activity is focused in Bogotá, and this complements our activities in Barranquilla, Cartagena, Santa Marta, Bucaramanga, Cali, Buga, and in a number of cities in Cundinamarca. Valor’s main characteristic is that it is fully attuned to the real estate market; its knowledge is comprehensive, and it is also linked to Estrategias Comerciales y Mercadeo SA, which enables it to perfectly gauge the market and act accordingly.

What new projects are you planning for Estrategias Comerciales y Mercadeo and for your investment banking division?

For Estrategias Comerciales y Mercadeo, we plan to expand a showroom we have built for rural housing in central Colombia. We have also recently struck an alliance with a chain of hotels to commercialize suites and fiduciary rights, which will have an important impact both nationally and internationally. Additionally, we want to maintain our leadership position in the commercialization of blueprint projects. Today, the value of the property commercialized by Estrategias Comerciales y de Mercadeo in Bogotá surpasses Ps300 trillion in sales. The prime projects of the country’s foremost construction companies on the Caribbean coast are participating in this showroom alliance between Estrategias Comerciales y Mercadeo SA and a leading real estate company on the coast. Meanwhile, the investment bank is structuring a series of infrastructure and housing projects, some for third parties and others for our own use. It has a number of important projects in Barranca and in Buga, which are medium-sized cities. These are not the respective capitals of their provinces, but nonetheless present sound opportunities for entrepreneurial activity that generate employment and provide more housing for the Colombian people.

© The Business Year – June 2014



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