What do Facebook founder Mark Zuckerberg, football icon Diego Maradona, fashion designer Ralph Lauren, and actor Bruce Willis all have in common? Each of them has vacationed at and around Punta del Este, a seaside city in South-eastern Uruguay. Why Punta del Este? Let’s find out.
Punta del Este, a resort city in Uruguay, has experienced tremendous growth over the past few years, becoming a popular destination for wealthy summer-home owners and a place where investors are pouring millions into offices and education services.
As a result, the city is shifting towards becoming a year-round city, and many investors are betting that immigration will accelerate this trend. Punta del Este and the neighboring provincial capital, Maldonado, are home to about 170,000 people, with around 15,000 new residents settling in the area since the pandemic began, according to provincial governor Enrique Antia.
For the past two decades, Uruguay has been a magnet for tourists from neighboring Argentina. Punta del Este has long been a playground for South America’s elite, and wealthy Argentine and Uruguayan homeowners in the area have contributed to the city’s prosperity. The city has plenty of luxury apartments but little modern office space.
As a result, Carlos Lecueder, whose family-owned firm Estudio Luis E. Lecueder manages nine shopping centers and six office towers, is leading a group of investors building a $42 million World Trade Center-branded office tower in the city’s historic peninsula district.
After the pandemic triggered an influx of well-heeled Argentines and Uruguayans seeking the open spaces of a small city that also has many of the services such as hospitals and private schools found in major urban areas like Montevideo and Buenos Aires, the demand for modern office space in Punta del Este has risen.
Free trade zone status from the government, which exempts renters providing services to offshore clients from paying most domestic taxes, also made the office tower project more viable.
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Punta del Este’s potential to attract permanent residents led developer Altius Group to plan a mixed-use real estate project called Atlántico on five acres at the northwest edge of the city where it merges with Maldonado.
According to Atlántico’s CEO Francisco Jorge, the Argentine immigration reinforces that trend. After delays caused by a change of leadership and the pandemic, Altius broke ground on the $130 million project in 2021. Jorge expects to complete the $86 million first phase comprising a shopping center, an 18-floor apartment block, and a 14-story office tower by the end of 2024.
While the city has a demographic tailwind in its favor, Jorge said there are still shortcomings in educational services, especially universities, and health care.
According to Andrea Malaquin, dean of the Catholic University of Uruguay’s Punta del Este campus, higher education could hold the key to helping Punta del Este diversify its economy, just as universities are a key driver of economic development in small and medium-sized US cities.
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Punta del Este and Maldonado already have a cluster of at least four universities and several technical institutes, and Uruguayan students are enrolling in local universities because of the availability of outdoor activities such as surfing.
The Catholic University is spending $3 million to expand the campus to handle about 200 enrollments a year, and Malaquin expects the student body to rise from just over 100 this year to more than 700 by 2025.
Punta del Este is still far from becoming a “university town,” however. Student-friendly public transportation and cycling infrastructure leaves much to be desired, and year-round jobs are scarce, according to Malaquin.
While the government and business chambers have sought to create more steady jobs for an economy that’s still heavily dependent on tourists, with almost 600,000 people visiting Punta del Este in 2019, there are still few companies that offer jobs to the number of people who dream about living in such a place.
The local government is also looking to create more steady jobs for the economy, with a tender being planned to build and operate a free trade zone for services and logistics near the local airport and convention center. US-listed IT giant Globant has also opened an office near the yacht harbor, which may employ thousands of people around the world.
The extraordinary tale of Punta del Este is one of rapid transformation and evolution. A once sleepy beach town is now transforming into a bustling year-round city, thanks to an influx of affluent immigrants and investors. These investments are a testament to the extraordinary tale of Punta del Este. Hence, with the influx of affluent immigrants and investors, the city is well on its way to becoming a cultural and economic hub of South America.
