A survey of members of the Association of Foreign Investors in Real Estate (AFIRE) has placed the Brazilian real estate market in second place in terms of attractiveness in 2012 – above China and all countries within Europe. São Paulo was also indicated as the fourth most attractive metropolitan region (after New York, London and Washington) – moving up from 26th position in 2011.
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.
One of the most frequently quoted destinations for the overseas property investor exploring Brazil, Natal’s popularity has grown due its rapidly growing economy; its’ close proximity to the US and Europe; a thriving tourism industry and year round sunshine amongst several other factors. However, as with many capital cities in Brazil, Natal and the state of Rio Grande do Norte have been recently quoted as undergoing a speculative boom period – with several launches reaching prices in line with those of the wealthier regions of the south. In this post, we spoke to Aldemir Freire from the Brazilian Institute of Geography and Statistics (IBGE) (a government organization) about has views as well as a number of topics related to the growth of Natal and Rio Grande do Norte in general.
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).
Fabio Nogueira of Quartzo – one of Brazil’s growing residential real estate construction companies (based in Minas Gerais) – stated in an interview with the Pini Web Construction magazine that he expects that competition between the larger and the small to medium players will intensify as the sector continues to grow in the next few years.
The latest survey (May 2011) undertaken by members of the US-based Association of Foreign Investors in Real Estate (AFIRE) pointed to Brazil’s market leading the ranking – putting the country in front of China and India.
Well-recognised as a leading organisation that serves the growing international interest in investing in Brazil, ADIT is now a firmly established port of call with regular events as well as its own investment agency and consultancy. We spoke to chairman Felipe Cavalcante on a range of issue related to the current climate in Brazil including recently emerging property bubble speculation; the ‘Minha Casa, Minha Vida’ programme (and the country’s housing deficit); regional hotspots; researching investment opportunities; transparency; risk management and the annual event being held in Forteleza city from the 10 to 12th of May.
The January / February 2010 Brazil real estate and land investor newsletter including an outline and link to our monthly statistical factfile.
