The "Clustering Effect" and what it means to investors like us

Hey guys, Mikkel here, 

At the time of writing this, I’m not behind my desk in Panama, taking my kids to karate class or halfway through a long-haul flight over to Eastern Europe. 

I’m here, on the ground in Paraguay, hosting what has become the biggest Exploration & Investment tour I have ever put together and led. 

…we’ve got 50 people here with us.

Fifty. 

Think about that for a second.

Fifty. 

This isn’t me standing in the center of a hotel conference room telling people why they should invest in Paraguay, either… 

…it’s 8 days of action.

It’s 8 days of early mornings and late nights.

It’s 8 days where business and adventure intertwine effortlessly.

Site tours. 

Meetings with lawyers and bankers.

Group dinners in amazing restaurants, eating some of the best meat money can buy.

…and this time around, it’s not just myself and Susan here - I’ve brought two Expat Money staff members with us to make sure that everyone on the trip with me is well taken care of. 

Again… fifty.

That’s fifty freedom-minded, adventurous, action-taking individuals who didn’t just read about Paraguay’s rise; they flew halfway across the world to see it and experience it firsthand for themselves.  

That’s fifty people who decided that waiting until “later” wasn’t a strategy and that the time to investigate, learn, and act is now. 

That’s fifty people who share your morals, values and concerns, all working hard to ensure the future of themselves and their families is not left to fate. 

This isn’t a bunch of Hawaiian shirt-wearing tourists snapping photos of the skyline in between having meals inside the most touristy districts either…  

These are serious people from around the world, sitting down with lawyers, bankers, and developers, shaking hands, asking the hard questions, and getting answers that you can not find online.

It’s families looking for security.

It’s investors looking for yield.

It’s entrepreneurs looking for a new jurisdiction that respects their work, rather than penalizing it.

I’ve run a lot of tours over the years, but when you have fifty serious people, many of them in their 40s, 50s, and beyond, coming to a country most of them had barely even heard of two or three years ago… you realize just how serious people are about planning their futures. 

…you realize just how quickly Paraguay has gone from an afterthought, or in many cases a “non thought”, to the number one jurisdiction contender for people planning their futures.

…and before I move on, I want to mention that we didn’t promote this tour the way we usually do. 

We didn’t spend weeks or months filling seats. 

Yet here we are with more people than ever, boots on the ground, seeing with their own eyes why Paraguay is a country you cannot afford to ignore if you’re serious about a Plan-B.

This is no small feat, and I am thankful to each and every one of you who entrusted me to lead you through Paraguay.

If you’re reading this now and you’re on the tour with me, tell me what you think about the newsletter the next time we chat.

Ok, let’s get into it… 

The Clustering Effect - What It Is and Why It Matters

The “clustering effect” is the way projects stack, reinforce, and accelerate each other until what was once “just a piece of land with a couple of buildings” becomes an ecosystem.

One new tower goes up, and suddenly a café opens to serve the residents. 

Another developer sees the momentum and breaks ground on their own project. 

Then a pharmacy.

Then a grocery store. 

Before long, the area that was once just empty land becomes a fully livable, cohesive ecosystem.

Lenders begin loosening up because they can see the velocity in the area, and as a result, more businesses and shops open and bring even more life into the area.  

Tenants no longer have to be “convinced” to live or work there - instead, they’re lining up to do so because that’s where they can live, work, play and shop all without having to get in the car. 

New cafes, gyms, clinics, and co-working spaces arrive…  not because a government planner demanded it, but because the market itself is pulling them in.

…and once that “clustering effect” reaches a tipping point, values don’t just rise… they multiply. 

Early investors into zones that experience the “clustering effect” find themselves holding assets in the middle of what is no longer a fringe zone, but rather in the new “up-and-coming district” where the action is.

When what starts out as the purchase of a small residential unit in a condo building that most see as “randomly located”, becomes surrounded by growth, the value appreciation that happens is closer to triple digits than it is to two. 

… and that’s what’s happening in the 8th Kilometre right now…

Allow me to explain.

The Clustering Effect & The 8th Kilometre

Not long ago, the 8th kilometre of Ciudad del Este was a blank canvas.

Bumpy dirt roads. 

No modern condos.

No high-rise office buildings.

No government offices. 

It was the kind of place most developers ignored for many years because it was too far outside the traditional development sites.

Too early to attract capital, too “risky” by conventional standards.

That is, until Fernando showed up. 

Until Fernando came along, nobody cared about the 8th Kilometre. 

Developers, locals, business leaders… they were all focused elsewhere. 

To them, the 8th kilometre might as well have been a jungle outpost.

Fernando didn’t see it that way. 

He understood that cities expand. 

That growth needs space. 

So while everyone else was content to keep fighting over the same plots of land in the same parts of town, Fernando started building where the long-term upside was
obvious… to him at least. 

The first few years weren’t easy. 

It was just him, putting capital at risk, breaking ground where others saw nothing. 

But he kept going, and then something big happened (as they tend to do when you’re moving with purpose and conviction). 

The Supreme Court of Justice announced that they were building a major facility inside the 8th kilometre. 

That was the moment the tide started to shift. 

It wasn’t just Fernando developing within the 8th kilometre anymore. 

The biggest employer in the country, the government itself, was anchoring itself in the very same area.

This not only meant a massive inflow of people into the district every single day… people who will need new places to live, let’s not forget. 

It meant that the area has achieved its high-level validation.

The 8th kilometre has now entered the territory of “clustering effect” and investors are already reaping the rewards. 

Values are continually rising, and the cost to rent here is steadily going up, too.

With the “clustering effect”, even just the announcement of more adjacent developments pushes values upward… and that is happening here almost monthly.

It’s no longer just about any one building; it’s about what more buildings, more business and more residents mean to the entire district as a whole.  

Various types of commercial and residential projects are emerging here, feeding off each other, compounding demand, and creating an ecosystem where momentum is building rapidly.

The convenience of having everything one needs to walk to and from all their daily obligations is a relatively new concept in Paraguay, but in a development site like the 8th kilometre, this is what begins to happen… and it already is.

Students at the nearby University can live in a residential building like the Soho, do their shopping at the Plaza Mall, and visit their friends for lunch at one of the many new restaurants in the area.

…and when they earn their degree, they very well may find themselves working for one of the international businesses that will be setting up shop inside the office tower we’re building, The HUB.8, once it’s complete.

When development moves beyond quick cosmetic fixes like repaving roads and instead builds real infrastructure for people to work, live and play in, areas become their own ecosystems… like functioning “city blocks”, if you will.

…and for the investors who positioned themselves early in that evolution, the gains are nothing short of massive.

One day, you’re buying a pre-construction condo unit in an area where it would be the first, and 10 or 15 years later, it is surrounded by plazas, office towers, other condos, restaurants and everything else you can imagine, and what you’re holding is in a completely different asset class, fiscally speaking, I should add. 

Fernando has literally led the charge within the 8th kilometre, and today, this area is home to multiple condo developments, new office buildings, and a growing network of projects bearing the Green Parana name… all feeding into something that has become much bigger than the sum of their parts.

Now, I want to make it clear that even though Fernando was the trailblazer as it pertains to the 8th kilometre, he isn’t the only developer making strides here any longer.

Success follows success, and given the success Fernando has had here since entering the scene in 2011, it is no surprise that other developers have taken note and have acted accordingly.

When you invest in a region that is experiencing such a massive transformation, you’re buying into the beating heart of a growth corridor that is going to compound in value for years, if not decades, to come.

If you project forward to 2030 or 2035, the 8th kilometre will be the most desirable ecosystem in Ciudad del Este.

It will be the place for people who want to live, work, and play without leaving the area.

It is essential to note that this type of massive (and rapid) transformation is not feasible in most countries.

Sure, Qatar can build a massive football stadium in mere months to host the World Cup, or Dubai can raise a new city block in what feels like a split second, but at what cost?

The point I am making is that this cycle of growth takes decades in the West, or may come at the expense of human life in the Middle East; however, in places like Ciudad del Este, it happens in a matter of years.

When the government is on your side, the demand is evident, and when locals are paid fairly and choose to work hard out of a sense of pride, the evidence is clear…

Big things happen… and they happen fast.

Now… how could I tell you all about the 8th kilometre without telling you how you can get in on the action here…

DEAL OF THE WEEK: High-End Apartment Living Inside A “One of Its Kind” Gated Community

Leblon is the only apartment building in the entire city located inside a gated community… and it’s right smack dab in the middle of the 8th kilometre.

Leblon is a 21-unit luxury development tucked inside Terranova, an already-established, low-rise gated community.

This is the only apartment building in town inside a gated community, surrounded by elegant two-story homes… and given there is no more space inside Terranova for future development, there will never be a Leblon 2, 3 or 4. 

Not next year, not 10 years from now… not ever. 

Once these 21 keys are spoken for, that’s the end of the story.

Supply is capped permanently in the most desirable pocket of the city, which is a recipe for massive capital appreciation. 

Leblon was designed to own a segment of the market that until now nobody had built for properly - the true high-end buyer and tenant who wants discretion, security, and sophistication.

In fact, when Leblon was introduced to the market, comparable luxury buildings also hit the market around the same time. However, Leblon came in significantly more cost-effectively and offered far more luxury, amenities, and prestige to buyers. 

At the building level, you’ve got a ground-level pool and three elevators serving just three levels.

This is a boutique configuration that keeps traffic low and privacy high for the residents.

Installing three elevators to serve just 21 units is a testament to the fact that Leblon is built with livability in mind, and it speaks to the fact that cost efficiency was not a primary consideration when this project was planned. 

Given that Leblon is situated within Terranova, residents also have access to the larger community’s amenities, including paddle courts, soccer and basketball courts, kids’ areas, multiple secure entrances, and 24/7 security.

Leblon is already on the short list for high-performing Brazilian businessmen who work between Brazil and Paraguay,  judges working inside the offices of the Supreme Court of Justice (which is just a few blocks away), as well as families who already live inside Terranova but want their adult children nearby inside the same gated community.

These are non-price-sensitive tenants who pay more for location, security, and a higher quality of life… all of which the Leblon offers. 

This is what a clear, predictable renter profile with real purchasing power looks like… and this is the exact type of

By the way, Leblon’s slogan in Portuguese translates to “good life”.

It’s also the name of the fanciest neighbourhood in Rio de Janeiro…

So yes, when I say this development is hyper-targeting a certain type of renter, I am not mixing my words.

If you understand the clustering effect that is happening here, then you see why Leblon is the luxury pin that was missing: a boutique, permanently scarce, gated-community building in the center of the most promising growth district. 

That’s not just a good address; that’s strategic positioning that compounds over time.

Boutique scale, gated setting, protected views, high-end features, and a tenant base that values all of it, in a region of the city that is transforming as quickly as possible…

…this is exactly the kind of asset that ages like a fine wine, and for investors like us, this means value appreciation that doesn’t spoil. 

The Deal I Have Secured:

• Price: $149,000 USD.

• 2 bedroom, 2 bath (just under 1000 sq ft).

• Private Terrace.

• Delivery: May 2026.

• Payment Terms: Four payments of 15% ($22.3k) and a final payment of 40% ($59.6k), with the payment schedule extending out to January 2026.

• Early Use: You can use the unit before paying in full (yes, really).

The Leblon is very much a major part of the “clustering effect” in the 8th kilometre.

…getting in on Leblon means holding an asset at the very center of it.

To learn more about whether investing in a rental unit in Leblon is the right move for your unique situation, you can write to Fernando at [email protected] to get the information you need before making an informed decision. 

Wrap Up: 

After officially passing the halfway point of our tour here in Paraguay, I can say with complete confidence that the people who are here with me get it (they’re great dinner party company, too, by the way).

They’ve seen how easy it is to secure residency.

They’ve seen how strong the banking system is.

They’ve seen how affordable, livable, and investable the real estate still is.

Some of them have already locked in deals…

Many have already started their residency process.. 

…but all of them now understand why I’ve been pounding the table about Paraguay for the past couple of years. 

So, as I sit here in Paraguay, halfway through the tour with 50 incredible people, I can’t help but feel proud.

Proud of the attendees who took action to be here.

Proud of the country that continues to impress me more and more every time I visit.

…and to the rest of you reading this, take note now and start thinking about how Paraguay fits into your future offshore plans, or I assure you, you’ll be looking back wishing you did.

Speak soon,
Mikkel