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.
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).
August 4th, 2010 by
Ruban Selvanayagam
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An article discussing the rising growth of Brazilian real estate funds – a new breed of financial mechanism aimed at investors wanting exposure to the Latin America’s largest property market without the relative responsibilities of physical ownership.
An interview with Bruno Franco, a real estate investment analysis from Banco Votorantim – one of the top 10 banking institutions in Brazil with assets amounting to over US$ 48.7 billion. We discuss his experience; the various stages of analysing real estate; sensitivity analysis and how it is applied to the Brazilian property and land; current risks (and their minimisation) and the future of the market.
October 22nd, 2009 by
Ruban Selvanayagam
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A short post on the very simple procedures to follow when opening a bank account in Brazil as a real estate investor.
