Brazilian Real Estate Investment Booms Into 2011
2010 was a great year for Brazilian real estate. 2011 promises more of the same on the back of the largest ever Brazil character 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 character portfolio runs to 42 ventures in Brazil. Sam Zell, billionaire character mogul and keen advocate of investment in Brazil, has investments in Bracor.
The Brazilian similarities bought by Prosperitas amount to 1 million square metres of construction. The majority of the assets are commercial real estate similarities 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 character investment in Brazil.
Funds for the largest Brazilian real estate operation on record came from three supplies. The largest was Prosperitas Investment Fund III, which specialises in investments related to the Brazilian character market. The acquisition of Bracor assets also involved shares from one of the Brazil’s largest edges, Banco Bradesco.
Prosperitas has major expansion plans for its investment in Brazil. in addition as the recent additions to the fund’s portfolio, Prosperitas has a further R$300 million to invest with character likely to characterize highly within this.
The Prosperitas investment is however another high-profile move by private equity funds in Brazil, confirming the country’s excellent possible for investment opportunities, particularly in real estate. Brazil’s edges are also major players in the thriving character market and mortgage lending from edges this year looks set to continue to rise.
The Bank of Brazil currently has a proportion of around 20% of the Brazilian housing market and plans to expand this proportion 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 character 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 character 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 quantity of loans approved by the Bank of Brazil for character should double from R$3 billion in 2010 to R$6 billion this year.
The recent Prosperitas acquisitions show that there is huge investor interest in Brazil. The record R$2.2 billion also proves there is nevertheless plenty of room for investment in character in Brazil. Analysts 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 possible for returns is feasibly higher than ever.