Front Elevation: Uruguay’s Eden

Punta del Este has become the Pearl of the Atlantic.

text by: Saxon Henry

April 1, 2008

Until the early 21st century, Punta del Este, Uruguay, was the best-kept secret of the Argentine elite. It was the premier summer destination for the neighboring country’s wealthiest population, but Argentina’s economic meltdown in 2001 brought empty resort hotel rooms, sparsely populated restaurants, and a faltering real estate market to Punta del Este.

What a difference a few years make. The burgeoning city that undulates along the coastline in the southeast corner of Uruguay is experiencing a building frenzy reminiscent of the region’s original boom during the 1980s. The area is commonly known as the Pearl of the Atlantic, but other nicknames—the Argentine Riviera, the St. Tropez of Uruguay, and the Hamptons of Latin America—reflect the holiday season that runs from late December to early February, when celebrities such as Ralph Lauren, Naomi Campbell, Robert Duvall, and Antonio Banderas come to town. The two weeks between December 27 and January 10—the height of the South American summer season—bring dizzying crowds and a frenetic nightlife to the Uruguayan coastline. However, developers and tourism executives are hoping to draw visitors with alluring attractions during the quieter months, when the weather can be windy and rainy.

Unlike St. Tropez and Monaco, "Punta," as its devotees call it, has a relaxed ambience. Some of the upscale restaurants are downright unassuming—tucked away in the woods or nestled into the sand with wooden shutters thrown open to ocean breezes. Also, in contrast to South America’s more recognizable resort destinations, real estate is still relatively affordable in Punta—for now.

With hundreds of thousands of visitors each year and only 10,000 full-time residents, Punta is a second-home developer’s dream. "Non-qualified beachfront land can be bought for as little as $40 per square meter," says Alfredo Etchegaray, an Uruguayan project consultant. "After a four-year process that includes environmental impact studies and several steps for political approval, the property can be sold for more than $1,000 per square meter."

This price continues to spike exponentially as word spreads about the area’s natural beauty and long list of activities. To the north and east—along a craggy coastline interspersed with silken sandy beaches—are the towns of La Barra and José Ignacio, which also have exploded with development in the past several years.

Whereas Punta del Este is seeing an eruption of high- and mid-rise condominiums, the buildings in La Barra and José Ignacio are mid- and low-rises. "The density in José Ignacio is much lower and the scale is more human, peaceful, and elegant," says Jorge Perez, chairman and CEO of the Related Group. "A lot of wealthy people seem to be moving there." To meet this expectation, his development, Laguna Escondida, is slated for completion in 2010 on the rock-strewn shores of José Ignacio.

Great Britain’s literary bad boy, Martin Amis, owns a second home on a picturesque hillside overlooking José Ignacio’s faro, or lighthouse, and Ralph Lauren’s favored South American summer rental is nearby. "I think Punta and the surrounding towns have incredible futures as destination resorts," says Perez. "The only drawback is that the area is relatively far for Americans and Europeans to travel to; but once they are there, the area is second to none."

Unlike many of its neighboring countries, Uruguay is known for its stability. "Punta del Este is one of the safest cities in South America," says Rafael Sánchez de la Puente, a marketing and communications consultant. "The land is cheap and plentiful. It’s an investor’s paradise."

Walter Neri, CEO of PuntaOnline, a website that offers real estate listings and recommendations, has watched the city’s explosive development with awe. "To see Punta grow is very exciting," he says. "We’ve been able to interact with many people from other countries. This internationalization makes our country incredibly unique and desirable."



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