The rating agency said it expects the real estate sector to continue growing in the region thanks to stable demand, mergers and acquisitions, and expansion projects.

The real estate sector will remain strong in Latin America in 2025, Fitch Ratings said on Tuesday, saying it expects Mexico to benefit from nearshoring even though it faces headwinds from policies at home and in the United States.

The rating agency said it expects the sector to continue growing in the region thanks to stable demand, mergers and acquisitions, and expansion projects.

"Fitch Ratings expects Latin American real estate fundamentals to remain strong in several countries. While the industrial real estate sector in Mexico is expected to benefit from nearshoring over the medium term, growth could moderate as players react to policy developments in Mexico and the US," it said.

Fitch expects particularly strong performance in Mexico and Brazil, the region's two largest economies.

"Retail stores and shopping centers in key markets such as Mexico and Brazil are expected to maintain solid operating metrics, with rent increases at or above inflation, high revenue collections and stable occupancy rates," he noted.

Meanwhile, the expansion will be more moderate in Argentina and Chile.

"In Chile, growth is likely to be modest, reflecting a gradual recovery in private consumption as the labour market improves. In Argentina, growth is expected to remain moderate, although an improvement in consumption could offer advantages to shopping centre operators," he said.

Fitch noted that the sector's leverage remains "manageable", with "adequate" liquidity profiles, few short-term debt maturities and "significant" unencumbered assets.