An insider update on the economic prospects of Natal and the state of Rio Grande do Norte

PRLog (Press Release) – Jan 18, 2008 –
Rio Grande do Norte is one of the nine states that make up the Brazilian North-East - it is known as the sunshine state and has excellent year round weather. The state capital is Natal and the city and surrounding areas has a population of almost one million people. It is the nearest Brazilian state to mainland Europe and is an 8 hour flight from London, currently available on Thomson's, and 7 hours from Lisbon.

Rio Grande do Norte has experienced very high growth over the last 3-4 years with significant investment being made from the Spanish, Italian, Portuguese and Scandinavian investor markets - British and Irish investment by comparison has been very low although we are starting to see considerable interest from both as well as the German, French, Dutch and Russian markets. The area is being transformed quite significantly and the overall intention is to create a strong link with golfing tourism as there are approximately 20 golf course projects in the planning stages at this point in time.

A new, and much-publicised bridge, has very recently opened across Natal's principal river, Rio Potengi, which has made access to the North coast much easier for all and is expected to generate significant growth in this area. The new airport is also scheduled to open in the north of the city and once open will make access to new resorts, such as Ponta Brasil Beach Resort even quicker - approx 35 minutes by car. Work has already started on the runways but a new project is currently underway to assess the possibility of incorporating the new airport into a free-trade zone - the findings of this project and the announcement of the full funding for the airport are expected to be announced in mid - 2008 and once approved work is expected to begin on the airport terminals in full shortly thereafter. In this event it is expected that the airport will partially open and be able to accept air traffic from end 2010 with full and final completion by end 2011 / early 2012.

It is our expectation, however, that once the final approval is given for the entire airport project to proceed next year, including the proposals for creating a free-trade zone, that we will see a significant leap in land and property prices in the North of Natal.

Brazil has also recently be given the right to stage the 2014 World Cup - plans have been announced by the Brazilian government to build 4 new stadia, one of which will be in Natal, and to upgrade 14 others to international status - whilst the World Cup venues will not be announced until next year there is wide expectation that Natal will be one of them - David Beckham is expected in Natal shortly as part of the Brazil World Cup promotion which gives considerable credence to this probability.

The local newspaper reported on 13th January 2008 of growing interest in Brazilian real estate from the USA and Middle East - Tribuna Do Norte quotes that the US billionaire Sam Zell is putting together a consortium with Morgan Stanley Real Estate, the Berkeley Corporation, the Royal Group from Abu Dhabi and the Olayan Group from Saudi Arabia with the intention of investing one billion US dollars in the next two years. Carlos Bettancourt, the Brazilian partner in the consortium, is quoted as saying that " in spite of the crisis in the USA, international investors are very confident in the Brazilian property market " - he would appear to be the man in the know as his company, Bracor has already invested USD 750 million in the market since May 2006 in the construction and purchase of 27 commercial developments.

In addition several major new developments have also recently been announced for the Natal area, primarily north of the city, which will significantly enhance the tourism and investment potential in this area. The Natal area, in our opinion, still offers excellent value for buyers and we expect year on year growth of around 20% to continue.