Where should you invest this 2025? Here are Our Wealth Management Director’s recommendations

It is a pleasure for me to address you. I feel that while the country is going to have to deal with certain challenges, just as any other year, there are solid reasons to be optimistic about the country’s economic prospects for 2025.

We are nothing but opportunity hunters and market creators, that won’t be an exemption for the year that is just starting.?

On a general note, the?OECD?forecasts Colombia’s GDP will grow at 2.8% for 2025, up from 1.8% in 2024.

In contrast, the United States is expected to experience a slowdown, with GDP growth projected to decrease from 2.6% in 2024 to 1.6% in 2025.

Along the same lines, the six largest Latin American economies (Brazil, Mexico, Colombia, Argentina, Chile and Peru) are collectively forecasted to grow by 2.4%, following an average growth of 1.4% in 2024.?

What most analysts feel is going to drive growth is domestic demand as well as investments in infrastructure, manufacturing, machinery and, finally making an appearance after a few years hiding in the shadows, construction and housing.?

2025 will be a Pivotal Year for Colombia’s Politic

2025 presents itself as a pivotal year as it is a pre-election one in Colombia and as such many will be betting on a very strong 2026, starting with a change of line of governance back to center right, as opposed to center left, where we currently stand.

As all pre-election years, legislators will be cautious not to be associated with approval of laws that conduct to unsettling reforms as they also have their own interests to protect in the sense of not losing their seat at Congress. What this generates is zero atmosphere for the? President to impose his agenda and thus much needed juridical predictability.

We already had a taste of this a month ago, when the government’s proposed budget and tax reform were both denied by Congress.??

Tourism in Colombia, and Specially Medellín, is booming like never before

Our beautiful country continues to shine on a very familiar front for all of you: Tourism.?

In 2023 we ranked?7th in the entire world?and?1st in all South America?in tourism growth with an outstanding 35% increment. Figures for 2024 are not officially out yet but everything is pointing to another 15% on top of last year’s amazing jump. To make this even greater, this all adds to now more than twelve years of average growth rates close to 20%, compared to a world average of just 4%.

These are statistics one needs to carefully consider because more than a colorful fad, the idea of discovering Colombia has become a powerful trend that shows no signs of slowing down.??

Having said this and keeping in mind industry dynamics as well as the unfolding financial environment,?this year we will strengthen our unique real estate projects by focusing on both short and mid-term rentals in Medellin.

In addition, thanks to our reputed mortgage loan program, we will scale our efforts to both allocate and offer our clients the possibility of investing in short-term private debt at above market rates and minimal risk.??

Here are some specific thoughts on two of the assets we are recommending in 2025:?

Traditional Assets – Real Estate?

With over 1.6 million visitors per year, Medellin has surpassed Cartagena as the most popular leisure tourism destination in Colombia. More than a decade of 5X growth compared to global average growth rates has created a deficit in the number of beds, and more specifically, quality accommodation.?

Of course, the outstanding demand has also produced a surge in supply in recent years, but most of it has been of poor quality and in misalignment with current zoning laws that do not permit short term rentals just anywhere, something that the city council seriously started to address two years ago and which has resulted in?a reduction of over 31% of all Airbnbs legally registered in Medellin.?

The math is simple, 31% less low quality / unfairly competing accommodations Vs almost 50% more visitors in 2023 and 2024 alone.

No need to be a scientist to understand what that equation implies for those fully compliant hospitality experts like us.

Having 75 properties under management, including 3 hotels and years of experience in the business has allowed us to understand what visitors are really looking for, which is really better quality accommodations that enhance their experience, and not just stand-alone apartments in older/traditional buildings with poor amenities.

For this reason, we will be focusing on developing turnkey projects, that add true value to our guests through comfortable amenities and complementary services.

We already aimed for this?in?The Cut,?a project that will be completed by the end of 2025, and we intend to replicate with our next tourism driven project:?The Gray Zone.?

This brand new real estate opportunity will be a 17-story building featuring 21 two-bedroom short-term rental apartments, 112 one-bedroom suites, retail, gym, and a rooftop pool offering the most stunning views of the city, all while being located in the heart of El Poblado, Medellín’s most touristic neighborhood.

Given the prices and outstanding prospect of appreciation and returns, we expect it to sell out in a matter of weeks. If you would like to participate,?please don’t hesitate to reach out.

Alternative Assets – Private Mortgage Financing?

As a result of the continued decrease in interest rates by the government during the last few months, we will be saying goodbye, and for a long time, to those incredible double-digit figures in money market accounts or mutual investment funds at financial institutions.

Last month, our two most important allies, Alianza Valores and Acciones & Valores, delivered only 4.75% and 5.61%, respectively, in their conservative funds. As the trend in rates points towards continued fall, so will the returns of these assets.?

However, this doesn’t need to mean the end of exposure to financial assets, specially for those of you who seek the convenience of monthly cashflow.??

At GG we currently manage close to 60 billion pesos in private debt products, mostly through short-term (24 to 36 months) mortgage loans, which are very well collateralized and using more than prudent loan-to-value ratios (50% max), making this product a safe asset.

This product has historically produce returns between 10 and 12% per year, which is now double of what financial institutions will be in the capacity to yield.

Feel free to reach out if you’d like to explore this option to secure a steady, monthly, very secure stream of income. We have interesting deals to share with you today.

As we step into this promising new year, let’s seize these opportunities together—secure your spot in our exclusive projects or explore our investment solutions to start building a brighter financial future together.?