Small is Beautiful – Go Boutique in Brazil

PRLog (Press Release) - Sep 09, 2009 -
Like bees to honey inexperienced off-plan property investors are all too often drawn to Brazil’s megaresorts which launch amongst a fanfare of mass marketing and celebrity endorsement.  The seasoned investor, however, knows to look for substance over style and in today’s soft market that can often mean boutique is best.

Samantha Gore, Sales & Marketing Director for specialist Brazil agents www.uv10.com, comments, “Agents and investors alike have been seduced by the ambitious coastal developments with their slick advertising campaigns and tempting pre-release pricing, but many, although by no means all, are falling by the wayside leaving some investors unstuck.  Plenty of Spanish and Portuguese developers rushed headlong into Brazil hoping to emulate the easy money success of the Iberian Costas but, as recession took hold back home, funds dried up and plans got, at best, indefinitely delayed and at worst, completely shelved.  Those who had already reserved units faced the prospect of losing their deposit – tricky to recoup if the developer has gone bust or is involved in complicated legal wrangling - both of which can be very real scenarios.”

But it’s not just cashflow that has put the brakes on several megaresorts; the super strict regional environment agencies have also played a key role.  Samantha continues, “Some developers will conduct pre-release sales whilst they await the results of independent environmental assessment but fail to realise how fiercely protective Brazil is of its natural resources and beauty.  One Spanish developer, with visions of a golf resort with thousands of homes on stunning beachfront land, was soon thwarted by IDEMA, Rio Grande do Norte’s environment agency.  It became apparent that provision for sewerage and water was inadequate, the sand dunes were not buildable and fell under environmental protection and so the project was red carded.  No license was granted, the marketing machine ground to a halt and coincidentally the developer is now in receivership.  We have organizations like IDEMA to thank that Brazil is littered with ‘plans’ that never came to fruition rather than ‘half-finished’ developments as along the Spanish Costas.”

www.uv10.com has, since inception, made an informed decision to concentrate largely on smaller resorts, with some special exceptions such as the upcoming Cabo Sao Roque which has some very serious backing.  Many large ambitious projects are difficult to get off the ground and to sustain – particularly in today’s challenging economic times.  Boutique projects require less funding and are often privately built.  You can get to know the developer by name and establish a relationship based on trust and ease of communication.  Additionally, the lower the environmental impact and need for large scale new infrastructure, the more likely the development is to be approved.  

It’s also essential that you ask your estate agent “have you actually been there?”.  Whilst it seems obvious that your chosen estate agent should be an expert in the products it is promoting, a worrying amount still sell blind.  A site visit will soon determine whether the low entry pricing is due to cheap land picked up in an undesirable location or whether the creative team has been merrily airbrushing out towns or sprucing up beaches.  Similarly the estate agent will be able to identify the nearest town, transport connections and other essential infrastructure to give an investment longevity and profitability.    

Samantha offers some final advice, “Look for an area where Brazilians have also bought in to, such as Pipa village south of Natal.  The Brazilians are the biggest target market for both rental and resale.  There’s no need to fall for a gimmick such as a guaranteed rental or a cash discount.  If you buy in the right place with an established infrastructure the end-users will come, and more importantly, will stay.  And always enlist the services of an independent lawyer licensed to practice in the State in which you’re buying.  Don’t use the same lawyer as your developer, it will be impossible to receive impartial advice.”

www.uv10.com is promoting a range of developments priced from 207,792 reais (approx 78,475 euros) for a two bedroom completed apartment in Morada dos Ventos with four-year interest-free developer finance, up to 360,000 euros for a three bedroom villa at Domus.

Contact uv10 on info@uv10.com, visit www.uv10.com or telephone UK local rate +44 (0)845 643 1036 or the Spanish office +34 952 764 560.  Skype uv10-brazil.

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for further press information or photography please contact Sarah Drane on sarah@purplecakefactory.com or call 00 34 607 564 726