Buenos Aires: A new Latin quarter

A country best known for polo and steak and Maradona's infamous hand of God is fast gaining another reputation - for seriously stylish architecture.

The first Latin American project designed by the iconic Norman Foster, El Aleph is a new residential building in the historic Puerto Madero docks, in central Buenos Aires.

As part of a long-term regeneration project, Alan Faena, a former fashion designer and entrepreneur, is masterminding the transformation of the neglected dock area into a vibrant "Faena art district" housing five-star hotels, several residential developments and cultural centres.

At the heart of the project sits Argentina's first Philippe Starck-designed hotel and apartments, the "Faena Hotel and Universe". Carved from a former grain house built in 1902 by the British, using Manchester bricks, the El Porteno building lay empty for years but is now the city's most stylish hot spot. The hotel has Latin America's highest rates and the apartments have long since sold, many to visitors impressed by Starck's take on a mix of European and Latin American influences. Prices have risen dramatically since the development's launch in 2002. An apartment which sold then for £114,000 is worth £220,000 today, but Faena is keen to stress that his vision is not confined to boosting Buenos Aires' property market. He says: "We aren't developers who build then walk away. This is an ongoing project."

The Faena Hotel was followed by two other residential developments in Puerto Madero, La Portena, a sister building to the hotel, and Los Molinos, currently under construction and already 80 per cent sold. Many buyers own several apartments and are expected to buy at El Aleph specifically because of Norman Foster's involvement.

He says: "This is a very exciting project which I find so inspirational. Thanks to the ideas which have always been in Alan's mind, particularly the idea of blurring the edges between leisure and residential, the development will be socially responsible and have a whole new cultural dimension."

Many buyers are British-born - which might seem surprising, given the distance. Yet there are long-standing links between the two countries.

Faena rejects what he terms "the visual contamination" of high rises, and El Aleph will contain three mixed-use buildings with the first phase, consisting of a nine-storey apartment block. A landscaped courtyard will hold the vital civic space needed to host public art events that always sit at the heart of Faena developments.

Phase two will see a floating island clubhouse with pool, spa and five-star hotel, with completion set for 2010. All 234 apartments are dual-aspect with double-height ceilings and floor-to-ceiling glass walls allowing owners views of the river and cityscape. Prices start from £196,000 for one bedrooms rising to £310,000 for two bedrooms and penthouses from £1m.

In the late-19th century, Argentina could boast the sixth-largest economy in the world. A crisis in the 1990s culminated in a crash in 2001 that seriously damaged the economy, just as Faena was starting to develop Puerto Madero. He refused to give up. He says: "I know my people, they are survivors. The crisis only served to make them more creative."

Today the city teems with signs that the economy is back on track. Many areas are undergoing regeneration and prices in established areas, such as Recoleta, are said to have grown by 25% in the past 12 months, with Puerto Madero now the city's most expensive neighbourhood.

Peter Haller runs property search company Maison Buenos Aires: "It's really the most cosmopolitan city which offers everything, as it's an amazing mix of Europe and South America." Few cities can match it in terms of lifestyle at low cost and Haller sees an increasing number of British buyers who are realising that, despite price increases, property is still affordable and offers a strong rentals market with yields of up to 8%.

Buyers include polo professionals and business people searching for everything from city high-rises to older-style buildings (referred to as casa chorizo for the long, sausage-shaped rooms), commonly found in trendy San Telmo.

Costing as little as £150,000, these beautiful buildings lie in the heart of the city and appeal mainly to foreigners who snap them up for restoration.

El Aleph is for sale through Aylesford International, 020-7351 2383, www.aylesford.com

Faena Properties, 00 54 11 4010 9000 www.faenagroup.com

Maison Buenos Aires, 00 54 911 5388 3993 www.maisonbuenosaires.com