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Follow on Google News | Brazilian Real Estate Investment Booms into 20112010 was a great year for Brazilian real estate. 2011 promises more of the same on the back of the largest ever Brazil property transaction.
Prosperitas, one of Brazil’s top fund management and private equity firms, has just made investment to the tune of R$2.2 billion (US$1.3 billion) in real estate in Brazil. Prosperitas recently acquired 30 assets from Bracor, one of Brazil’s largest real estate outsourcing companies and whose property portfolio runs to 42 ventures in Brazil. Sam Zell, billionaire property mogul and keen advocate of investment in Brazil, has investments in Bracor. The Brazilian properties bought by Prosperitas amount to 1 million square metres of construction. The majority of the assets are commercial real estate properties with long-term leases. Tenants include IBM, Procter & Gamble and Goodyear, and annual revenue from tenancies run to R$230 million. This figure gives a good indication of the buoyant market for commercial property investment in Brazil. Funds for the largest Brazilian real estate operation on record came from three sources. The largest was Prosperitas Investment Fund III, which specialises in investments related to the Brazilian property market. The acquisition of Bracor assets also involved shares from one of the Brazil’s largest banks, Banco Bradesco. Prosperitas has major expansion plans for its investment in Brazil. As well as the recent additions to the fund’s portfolio, Prosperitas has a further R$300 million to invest with property likely to feature highly within this. The Prosperitas investment is yet another high-profile move by private equity funds in Brazil, confirming the country’s excellent potential for investment opportunities, particularly in real estate. Brazil’s banks are also major players in the burgeoning property market and mortgage lending from banks this year looks set to continue to rise. The Bank of Brazil currently has a share of around 20% of the Brazilian housing market and plans to expand this share further during 2011. The Bank of Brazil has funds to the value of around R$7 billion for investment in Brazilian real estate and has already reached contractual agreements with 16 major property developers. Part of the R$7 billion fund will be allocated towards social housing projects within the government-backed Minha Casa Minha Vida programme, already contributing extensively to the booming market for property in Brazil. The Bank of Brazil intends to invest in Minha Casa Minha Vida projects aimed at Brazilians earning more than three times the minimum wage. The Bank of Brazil also plans to attract more mortgage loans this year. According to the Chairman Aldemir Bendine, the volume of loans approved by the Bank of Brazil for property should double from R$3 billion in 2010 to R$6 billion this year. For Obelisk International, the recent Prosperitas acquisitions show that there is huge investor interest in Brazil. The record R$2.2 billion also proves there is still plenty of room for investment in property in Brazil. Obelisk International believes that 2011 will be an exceptional year for Brazilian real estate and related investments. Whether it’s a social housing project or investment in construction materials, the potential for returns is feasibly higher than ever. About Obelisk International: For more information on investment in Brazil and to find out about Obelisk International’ # # # Obelisk International offers select investment opportunities in Brazil in a range of sectors such as residential real estate, construction and social housing. Obelisk gives investors security, profitability and diversity thanks to a combination of close attention to our clients' investment requirements and high quality in-house research and analysis. End
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