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Follow on Google News | Emerging Trends in Brazilian Real EstateThe attraction of investment in Brazil is undeniable. When so many developed markets present limited opportunities for investment, Brazil is exactly the opposite.
“People want to be where the action is, and that’s Brazil,” comments the latest PricewaterhouseCoopers ‘Emerging Trends in Real Estate’. Brazil features strongly in the 2011 report, particularly in an American context. “Where the United States has gone boom-bust and Canada offers only modest growth, Latin America’s story centers on the enormous potential of two emerging markets – Brazil and Mexico,” says the report. The PricewaterhouseCoopers (PWC) report claims that Brazilian investments are relatively unusual in a North American portfolio but for those who do make investment in emerging markets, “the action in all about two countries”, Mexico and Brazil. Brazilian Real Estate Trends Real estate in Brazil presents some compelling opportunities, according to PWC. Demand is riding high on the back of the chronic shortage of property in Brazil and the growing purchasing power from Brazilian consumers. One investor in Brazil quoted in the report comments, “There’s a ton of demand for a ton of new space. You can build housing forever, and people will want it”. One of the principal drivers behind the burgeoning demand for Brazilian real estate is the rapidly-expanding middle class. For PWC, “the middle class is huge and dramatically increasing, creating intense demand for highrise residential and retail”. The PWC report points out that along with Brazilian apartments and houses, other opportunities for investment in property in Brazil lie in shopping malls and logistics. “Shopping centers are few and far between, and distribution warehouse facilities are in short supply to serve growing consumer appetites,” says ‘Emerging Trends in Real Estate 2011’. Investment in Offices in Brazil Offices are another buoyant market for investment in Brazilian real estate. PWC finds that the two cities of Rio de Janeiro and Sao Paulo dominate the market, almost excluding all other cities. As one investor quoted in the report says, “Everyone wants to be in Rio” where there’s virtually “zero percent vacancy” and rents increased by 30% last year. Office real estate in Sao Paulo presents a similar picture. According to PWC, “it’s a bubble driven by user demand, not speculators” The report cautions that opportunities for new development in offices in the two biggest cities are limited by poor infrastructure. The increase in population in Rio de Janeiro and Sao Paulo is putting serious strains on the cities’ roads and public transport networks. This may impact on opportunities for investment in Brazilian offices, although PWC interviewees expect this sector of real estate in Brazil to “remain enticing”. Real Estate Drivers in Brazil As well as demand for property, Brazil has other factors contributing to its appeal as a real estate investment destination. For PWC, these include self-sufficiency in agriculture and energy, and expansion in its high-tech manufacturing. In addition, PWC cites “the swirl of young populations, an energized middle class, and the immense promise of expanding industries” as some of the advantages offered by Brazilian investments. PWC also points that local knowledge is a vital component of successful investment in Brazilian real estate. The report emphasises the need for local know-how – “Local companies with big development platforms and insider connections have a tremendous advantage”. For Obelisk International, ‘Emerging Trends in Real Estate 2011’ offers the essence of the possibilities for investment in Brazil. Our market research has also found “there’s a ton of demand” and that user demand is driving the Brazilian real estate market. Obelisk International’ About Obelisk International: For more information on investment in Brazil and to find out about Obelisk International’ # # # About Obelisk International: For more information on investment in Brazil and to find out about Obelisk International’ End
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