© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
December 7, 2012 6:33 pm
Mexico City may be the oldest capital in the Americas but the city’s most vibrant real estate region – the master-planned colonia of Santa Fe – is one of its newest. Defined by skyscraper-lined avenues and dotted on its sides by neat and secure subdivisions, Santa Fe resembles Dubai in scale, with the density and relative order of the suburban US.
“Santa Fe was designed like an American city – safe, clean with lively urban centres, good restaurants and the city’s best shopping,” says Francisco Andragnes, chief executive and co-founder of Metro Buildings, which is developing one of Santa Fe’s first full-service rental properties. “The people who live there are mostly white-collar, professional types working for the financial services, banks, telecom companies and the other corporate tenants who call Santa Fe home.”
Perched about 20 miles from Mexico City’s core, and well beyond the upmarket Polanco district and hotel and office-lined Paseo de la Reforma, Santa Fe initially gained notoriety in the late 1980s after a series of powerful earthquakes drove upper- and middle-class homeowners away from the capital’s historic centre.
It was the arrival in 1988 of the Ibero-American University, however, that propelled Santa Fe to city-wide prominence. Established in 1943, Ibero’s original campus was destroyed during a 7.9 tremor in 1979. Almost a decade later, a 48-acre complex was built in Santa Fe, and the Santa Fe Shopping Mall (Latin America’s third largest) followed, along with a clutch of “Class-A” commercial office towers and new-build apartment blocks.
“Ibero took a big risk relocating to Santa Fe,” says architect Fernando Romero, who designed the 35-floor residential tower Panorama Santa Fe and the Museo Soumaya, the new private museum of telecoms billionaire Carlos Slim. “But once the students arrived, restaurants and other businesses were needed to serve them, which were followed by corporations.”
While growth was stunted during Mexico’s 1994 “peso crisis”, numerous national and multinational groups – from Hewlett-Packard and Honda to Kraft and Coca-Cola – eventually settled in Santa Fe as Mexico’s economy expanded in the half decade after the North American Free Trade Agreement in 1994. Today, more than 25 per cent of Mexico City’s choicest office space is located in Santa Fe, according to Colliers International, and the district has in turn attracted a range of high-quality private schools, hospitals, hotels and apartment towers.
“We’re talking about an area that can easily have 100,000 people working there each day,” says Victor Lachica of Cushman & Wakefield Mexico. “Santa Fe’s housing and lifestyle amenities have also reached a critical mass,” he adds. And despite a double-murder at the Santa Fe Mall in January, the area, Lachica says, “is one of Mexico City’s most secure”.
Santa Fe’s housing ranges from modernist, Miami-styled apartment towers to some of Mexico’s most expensive villa estates, such as the Bosques de Santa Fe development. Almost all of Santa Fe’s properties are less than a decade old and – despite US-style amenities such as gyms and concierges – are priced roughly 20 per cent less than comparable real estate in more central locations such as Polanco, according to Lachica.
Nonetheless, the private villas and large apartments at Bosques de Santa Fe are priced between $1m and $5m, with a three-bedroom, three-bathroom apartment with golf course views listed by Coldwell Banker Astivia for $1.6m. The similarly-styled Cumbres de Santa Fe development has apartments and private homes from $500,000 to $900,000; residences at Mision Catala are priced from roughly $365,000 to just over $1m; while more modest apartments at City Santa Fe are priced between $285,000 and $387,000.
“The larger residences [within the district] are older and start in the 200 sq m range,” says Gustavo Lomelin of Lomelin Real Estate. “The smaller units came later to satisfy the housing needs of people working in Santa Fe.” People such as publicity and PR executive Ana Bravo, who moved into Santa Fe from the southern neighbourhood of Pedregal 10 months ago. “Before, I had a 90-minute commute each way,” she says. “Now my office is exactly four minutes from home.”
Perhaps the biggest challenges facing Santa Fe as it continues to integrate into greater Mexico City are isolation and inaccessibility. Mexico City’s Metro, for instance, does not serve Santa Fe, which is connected to the rest of the city by a mere handful of major roads, such as the Mexico City-Toluca highway. A series of infrastructure upgrades by Mexico City mayor Marcelo Ebrard – such as the new 1.9km Autopista Urbana Poniente – will increase access to Santa Fe over the next two years. Until then, however, “it can take upwards of two hours to reach Santa Fe if travelling from the city centre”, says Andragnes.
Nonetheless, for both developers such as Andragnes and Mexico’s emerging middle class, Santa Fe’s relative remoteness is less a curse, and more a competitive edge. As drug-related violence continues to plague most big Mexican cities, Santa Fe’s integrated layout and well-guarded buildings offer safety and predictability for an educated, affluent population willing to pay for them.
Santa Fe’s distinctive population and design also make it a logical testing ground for new forms of real estate development such as the “serviced” rental apartments being built by Andragnes’ group. Ubiquitous in more mature markets, upmarket rental projects are still relatively rare in Mexico City, where children may remain with their families until marriage.
“We will target young, professional clients looking to rent before they buy,” says Andragnes. Much like Santa Fe itself, “we are not creating anything new or revolutionary but merely adapting existing models for the Mexican market”.
• Despite last January’s double-murder, Santa Fe is one of the safest neighbourhoods in Mexico City
• Set more than 7,200ft above sea level and surrounded by mountains, Mexico City is subtropical with rain mostly falling in summer
• Foreigners in Mexico may own 100 per cent of property outright if it is outside the restricted zones
• Buyers pay between 3 to 5 per cent of purchase price for closing costs, which includes a 2 per cent acquisitions tax and notary fees of between 0.75 and 2 per cent
• Foreigners must obtain a buyers permit from Mexico’s foreign relations office
What you can buy for ...
$500,000 A 188 sq m apartment in the Tres Cumbras towers in the Cumbras de Santa Fe development
$1m A three-bedroom apartment with 450 sq m of living space in the Mision Catala development
Please don't cut articles from FT.com and redistribute by email or post to the web.