Whilst long term expectations continue to remain positive for Brazilian real estate companies, the globally leading banking institution Credit Suisse has recently recommended that investors take some caution – stating (in a client note published in São Paulo’s Estadão newspaper): “values appear attractive, but the lack of visibility over finances bring a cautionary vision towards the sector in the short term.”
BR Properties has recently announced the purchase of shares representing the social capital of the Ventura Brasil Real Estate Development company, valuing at R$ 746.25 million. Ventura Brasil is the owner of a commercial property located in central Rio de Janeiro with a total area of 45,577 m².
The ongoing financial difficulties of one of Brazil´s former prominent real estate developers – Gafisa – were confirmed in the form of reported a liquid loss of R$ 1.093 billion in 2011 (compared to a liquid profit of R$ 416.1 million in 2010).
At the launch of a report published by the Rio de Janeiro Housing Syndicate (Sindicato da Habitação do Rio, Secovi-RJ), city mayor Eduadro Paes commented that prices increases have been “crazy” and that the prefecture itself has a responsibility in this area. The comments somewhat contradict those made in a BBC interview a few weeks previous where Paes stated: “I think it [the property boom] is a good thing and is helping the rediscovery and construction of areas that were degraded… I believe it is a special moment for the city and should not be viewed negatively – in the future, the situation may turn but the market is fair.”
It was announced on Thursday 28th March that the US-based Equity International group has acquired a “significant share” of the Paraná based developer Thá (the exact figure was not revealed). Established in 1895, the Thá’s operations are based in Paraná and Santa Catarina and the group has developed over 2,000 residential, commercial, industrial and hotel real estate projects.
Economist Samy Davy from prominent research institution and university the Getúlio Vargas Foundation titled a recent blog post: “Don’t Let the Property Bubble Explode in Your Hands” – from which salient points have been translated in this post.
Brookfield Incorporations, Brazil’s 4th largest real estate development company, announced that launch values reached R$ 3.9 billion in 2011 – 32 percent more than in 2010 (half of this stock was launched in the last quarter of 2011).
The Rossi housing developer has recently announced a slashing of open market sales values in São Paulo and its surroundings – with up to R$ 150,000 being knocked off in some cases.
Relying on the generally ambiguous nature of real estate statistics and mainstream media reporting in Brazil invariably brings a challenge in getting an accurate picture of what is truly happening. However, as well as blogs such as “Bolha Imobiliária” (“Property Bubble”), “Observador do Mercado” (“Market Observer”) and “Brazilian Bubble” another site that continues to grow in popularity for providing less bias standpoints is Ricardo Torres’ Trading Café – from which I have translated a recent post he made on the current market.
The Construction Industry Union of São Paulo (SindusCon-SP) has recently stated its disagreement with government led statistics by the Brazilian Institute of Geography and Statistics (IBGE) – pointing to the fact that the country’s real estate construction sector grew by 4.8 percent in 2011 and not 3.6 percent.
