With tourism increasing rapidly in Brazil owed to impending events such as the World Cup 2014, the Olympics 2016 as well as the vast natural beauty and rise in business travel – the demand for hotels looks certain to remain high for the foreseeable future. Yet under such a seemingly interesting investment climate, it often comes as some surprise that the sector is not as consolidated as the other Brazilian property funds that we have previously outlined in this blog.
On the back of our recent blog post on the rapid growth in the value of the major Brazilian real estate related funds in recent years, BTG Pactual recently published a report entitled ´Understanding Brazilian Property Investment Funds´ – the salient points of which we have outlined in this post.
Further fuel was added to the Brazil bubble debate as research – undertaken by the Rio Bravo organisation on behalf of the Exame magazine – pointed to the country’s property funds witnessing an average total return of 375.5 percent from January 2005 until June 2011. The data also stated that over the last year the average rental payments distributed by the funds was 8.56 percent.
Recent research undertaken by Brazil’s Exame Magazine – using data from Ibope Intelligence – has shown that the rapid growth witnessed in Brazil’s property values between 2010 and 2011 pushes the country in front when compared to the rest of the world. This post provides the analysis undertaken (including a breakdown of some of the most prominent regions).
Despite the Brazilian real estate market looking set to experience a slow down, investment interest is nevertheless remaining strong. As an example, in March 2011 the Brazilian Capital Property Fund (‘Fundo dos Fundos de Investimentos Imobiliários da Brazilian Capital’), the first to be created of its kind, captured R$ 114 million (over R$ 14 million more than what was expected) collectively from 2,490 investors. According to Fabio Nogueira, director of Brazilian Finance Real Estate (BRFE) in an interview with the Exame magazine, such high demand has created an excellent opportunity to form a specific index for property funds – a process of which is already under analysis by the BM&FBovespa (the country’s main stock market).
February 23rd, 2011 by
Ruban Selvanayagam
2 Comments
Between December 2010 and February 2011, the Brazil Real Estate & Land Investment Guide tracked property prices and rental values in a handful of the country’s most prominent cities in order to provide an outline of how the market really is operating. Using the country’s four most popular property portals (Zap, Imovel Web, Web Casas and Balcão) we recorded over 29,000 properties in the central regions of Brasília (in the Federal District), São Paulo, Rio de Janeiro, Belo Horizonte (Minas Gerais) and Salvador (Bahia) for both sales values and rents – this blog post provides the results and an outline analysis of the areas analysed.
An article from Brazil’s ‘Examen’ magazine exploring the growth of housing construction for the country’s lower classes (D & E) and relative issues affecting the segment. The original can be read at the top of the post.
A short article on the increasingly present luxury real estate market in Brazil, exemplified in a report which indicated that sales valued at over R$ 1 million have hit new records of 25,000+ annual transactions in São Paulo.
A translation of an interesting article we came across via one of Brazil’s most prominent financial and business magazines – Examen – on the WTorre commercial real estate development firm and recent difficulties in raising finance for the mammoth projects the company is involved with.
A short article we wrote for the ‘Property Abroad’ magazine on Brazil’s richest man – Eike Batista – property interests expanding into Latin America’s largest economy.
