Spending on Brazilian Real Estate Rises | Obelisk International News

Obelisk International News - Consumer spending looks set to reach record levels this year in Brazil with families spending over a quarter of their income on expenses relating to property. This confirms the potential for strong growth in the Brazilian real estate sector.

A recent survey by IPC Maps reported in Exame magazine finds that all social classes in Brazil are spending more. Total expenses on consumer goods from basic foodstuffs to property in Brazil is expected to reach R$2.5 trillion this year, a significant increase on last year.

A breakdown of spending shows that housing expenses account for a large proportion of family income. Brazilian families spend around 26% of their income on their homes with food and beverages the next largest expenditure (17%).

Population Pyramid Points to Boom in Real Estate

The IPC survey takes a look at the Brazilian population and finds Brazil has a young and growing population, two factors that explain the current boom in the Brazilian property market. They also point to further massive growth in the development of real estate as Brazil strives to provide housing for new households.

According to the survey, almost half of Brazil is aged between 20 and 49. In the younger age bracket (10 to 19 years of age), there are 34.6 million Brazilians. Between them, these two population groups make up the main demand for property in Brazil and will continue to do so at least until 2030.

Middle Classes Drive Spending

Brazil has one of the world’s fastest growing middle classes. According to the IPC Maps survey, the middle class (Class C) grew by an amazing 20% last year. This massive addition to the middle classes translates into bigger spending power – unsurprisingly, Class C expenditure will rise by 19% this year.

Class C makes up almost 50% of the population and their over 24 million households are a major focus of investment in Brazil. Numerous multi-nationals – Whirlpool, Nestle and Ford – have tapped into this potential with spectacular results for their sales. Banks and developers of Brazilian real estate have also been quick to realise this middle class potential.

Big Spenders in North East Brazil

The survey also looks at geographical trends in spending by consumers in Brazil and finds that trends are changing, reflecting the new importance of inland and northern regions. Brazil’s biggest spenders are in the south east, which accounts for 52.2% of the total. Second in the ranking comes the north east, confirming this area’s potential for growth and Brazilian investment.

Obelisk International recognises the power of the middle classes in Brazil, particularly Class C, the main market focus of investment in Brazil social housing and an investment priority for Obelisk International. The growth of Class C, both in size and purchasing power, ensures that Brazilian real estate investment potential will be realised for many years to come.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
Follow us on Twitter (Obelisk International) and LinkedIn (Obelisk International).

Investment in Brazil’s Middle Classes

After eight years under Lula, Brazil now has a new president. Like her predecessor, newly-elected President Dilma has pledged to continue investment in Brazil’s new middle classes.

Under this investment, Brazil has experienced spectacular economic and social growth. A glance at statistics in key areas since 2002 shows impressive increases in both Brazilian wealth and social status. Although there is still plenty to do to fulfil Dilma’s pledge to end poverty in Brazil, the investment has paid off hugely. And thanks to the new-found wealth and spending power, Brazil looks well set to become one of the world’s top five economic powers.

Since 2002 when Lula came to power, Brazil has seen steady economic growth. The increase in income – the minimum wage in Brazil has grown over 60% since 2002 – and decrease in unemployment (currently 5.7%, the lowest for 15 years) has led to a legion of new spenders. Brazil now has 40 million new consumers whose big spending is, in turn, driving the economy forward.

The recent Christmas shopping period was reportedly the best ever throughout Brazil and consumer spending is expected to continue to rise over the next few years with an increase of 4% forecast for this year. Domestic appliances and telecommunications are experiencing huge increases in sales – mobile telephone ownership has gone up by nearly 500% since 2002 and internet connections by over 340%.

But the new consumers also aspire to bigger purchases. Top of the new middle class wish list is a home. Investment in Brazilian real estate has increased dramatically over the last few years and is set to do even further this year as more and more Brazilian families get a foot on the property ladder.

Next on the wish list are cars with 45% of the new middle class keen to buy a vehicle. Car manufacturing has grown by 88% since 2002, but there is still plenty of room for growth in this key sector, a favourite for investment in Brazil. This year, several large car manufacturers such as Fiat, Ford and Volkswagen have earmarked large investment sums for their factories at locations throughout Brazil.

Driving Brazilian investment in property and cars is the availability of credit. Since Lula was first elected president in 2002, credit has grown by 180%. This translates into a rise from R$600 billion in loans in 2002 to a massive R$1.68 trillion in 2010. And credit looks set to grow even further this year on the back of record numbers of mortgages.

Government investment in Brazil’s middle class has more than paid off in terms of economic growth and potential. There is still a lot to do – 5% of Brazilians live below the poverty line, but further investment in property through the social housing programme, Minha Casa Minha Vida, and in education should ensure this figure continues to fall. It has already dropped significantly since 2002 when it was 9%.

For Obelisk, the transformation of Brazil over the last few years has been more than impressive. However, we believe this is just the beginning. As more and more Brazilian move up the middle classes, consumer spending will continue to grow driving the economy even further. This together with the planned investment by the government should ensure that Brazil continues to provide spectacular statistics.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Room to Grow for Brazil Real Estate Investment

Riding high on a booming economy, sales of real estate in Brazil have never been busier. And the good news for investment is that there’s still plenty of room for growth.

Brazil is currently a global hot spot for property investment. Developers at all levels are experiencing strong quarterly profits and regularly announcing new developments. Mortgage financing is also enjoying a heyday with practically all Brazilian banks announcing new records almost monthly.

And more importantly, demand for property investment in Brazil is at unprecedented levels. In addition, demand is likely to remain high for the foreseeable future despite the huge increase in property investment.

Sales activity is at record levels and developers are struggling to keep up with the increasing number of Brazilians keen to get on the property ladder. While in the ‘90s Brazil was building between 100,000 and 200,000 units a year, that figure is now nearer 800,000. However, this is not nearly enough meaning there is no danger of a property bubble in Brazil. Chief Executive of PDG Realty (one of Brazil’s largest real estate companies), Zeca Grabowsky recently explained to Reuters this demand. “It’s far from a bubble. This is real demand.” he said, “It’s people buying their home for the first time”.

Along with most developers with investments in Brazil, PDG Realty has just announced record profits for Q3 this year. With profits of R$262 million, PDG Realty is seeing burgeoning sales. Compared with the same quarter in 2009, PDG Realty sold 62% more properties between July and September this year and launched 79% more units.

Construction volumes in Brazil this year have approached those in Mexico, a country that is considerably smaller both in terms of size and population. Because of Brazil’s huge size and the demand for property, Mr Grabowsky is convinced there is plenty of room for more construction.

Attempts are being made to meet the demand for property in Brazil. At the lower end of the house price scale is the government-backed social housing programme, Minha Casa Minha Vida busy building 3 million homes for low-income families. However, these will meet just 40% of demand for homes among the lower middle classes.

Homes for more affluent Brazilians are also springing up all over the country, but these are unlikely to be enough. The increasing population and rising purchasing power are continually adding to demand. Ernst & Young have predicted that 37 million properties will be built in Brazil over the next 20 years. In property investment terms, that is real demand.

For Obelisk International, the demand levels for property in Brazil are one of the reasons we believe the opportunities for investment are so good. Our Brazilian investments encompass different areas of property development, all of which are fuelled by Brazil’s inexorable demand. Like other real estate companies, we are also convinced that demand in Brazil is here to stay and along with it, some of the best opportunities for high returns currently available.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Consumer Market in Brazil is Investment Winner

As Brazil’s economy grows, so does the Brazilian consumer market. From toothpaste to real estate, Brazil’s middle classes offer a wealth of investment opportunities.

Brazil is fast becoming one of the world’s top markets for all kinds of consumer products. 2010 has been a particularly good year for consumer spending – Brazilians will have spent R$2.2 trillion by December, the equivalent of Spain’s GDP. As a result, more and more multinationals have earmarked Brazil as a top investment priority.

The latest edition of the business magazine, Negócios, reports that a number of big global names have experienced record sales in Brazil this year. Unilever has discovered that its Brazilian subsidiary has now overtaken the UK to become Unilever’s second largest market. Renault, LG and Pepsico report similar patterns. And unsurprisingly, all these companies have big plans for further investment in Brazil.

According to Negócios, the consumer profile in Brazil has changed radically over the last year. Not only are the Brazilians buying more, they are looking for better quality goods. Items once regarded as luxury are now part of the daily shopping list as more and more Brazilians see their purchasing power rise.

Brazilian tastes are now more discerning. Pepsico has seen sales of its healthy food range grow by 1000% this year. LG is currently selling 10,000 washer-driers a month compared to 2,000 a year ago. LG has also seen big sales in side-by-side fridges, home theater systems and flat-screen televisions. Consumer spending in Brazil is undoubtedly big business.

The same trend is also obvious in more expensive consumer goods. Car sales in Brazil overtook those in Germany this year and for both cars and motorbikes, Brazil is now the world’s fourth largest market. Many global car brands such as Fiat, Ford and Volkswagen have been making major investments in Brazil since 2009 to take advantage of this booming market.

Big spending has also reached property. Brazil’s second largest real estate company, Gafisa, has just posted record net income profits in Q3. In the third quarter, the property giant made R$116.6 million, an 83% rise on the same quarter last year.

Sophistication is also reaching real estate as Brazil’s upper middle classes demand larger and better-quality properties. Many experts believe this is a niche market and one of the best areas for investment in Brazil along with the market for social housing catered for by the government programme, Minha Casa Minha Vida.

Obelisk market research has noted the huge rise in consumer spending since Brazil left its brief recession behind in Q1 2009. We believe the new middle classes with their aspirations for more and better consumer items are a fundamental behind many investment opportunities in Brazil. And as middle class purchasing power continues to rise, Obelisk is convinced that these opportunities will only get better.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Continuity for Investment in Brazil

After the recent elections little has changed in Brazil. Continuity is the political and economic watchword and a guarantee that investment in Brazil will continue offering huge potential.

Brazil’s new President, Dilma Rousseff represents a continuation of Lula’s 8-year government. Under Lula, Brazil continued the orthodox economic policies introduced earlier and made social spending the trademark of the new Brazil. As a result, the economy has gone from strength to strength and Brazilian investments are at their highest level ever.

Dilma is anxious to reassure the financial markets and investors in Brazil that they can expect more of the same from her government. She has already pledged to continue Lula’s economic policies. These have brought steady growth to Brazil whose annual GDP growth is forecast to average between 4% and 5% between 2011 and 2013, record employment levels and above all, unprecedented social changes.

Conscious that Brazil’s booming middle classes are key to progress, Dilma has also promised to continue big social spending. This is excellent news for opportunities for investment in Brazil since the new upwardly aspiring middle classes represent a niche investment area.

One of Dilma’s priorities is increasing the Brazilian minimum wage and she says she plans to study ways of raising the minimum wage by 20% next year. This increase would boost still further the new middle class wealth and by extension, the associated investments.

Brazil’s next cabinet is still a mystery and Dilma has yet to unveil her ministers’ names. There’s pressure from the business community to keep Henrique Meirelles as head of Brazil’s Central Bank. The Central Bank has played a key role in marking Brazil’s economic path and is seen as a model of banking practice.

Dilma’s main challenge as new President is to continue transforming Brazil into a developed nation. Infrastructure investment in Brazil’s forthcoming sporting celebrations is a priority as is reining in public spending. Since her election, Dilma has proved to be determined to take Brazil to greater things. “I will be the one who guarantees the country’s economic stability,” she said.

Dilma faces the risk of being overshadowed by her predecessor and mentor, Lula – his future role in Brazil after handing over power in January is unclear – but her first steps show she already has a good idea of the path she would like Brazil to follow.

This path is one of continuity and, if her policies are successful, more improvements. For Obelisk, this message is good news for Brazil investment – not only can we expect more of the same excellent potential but we will see more opportunities for high returns.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Social Housing Investment in Brazil on Target

Brazil’s biggest property investment is on target for 1 million homes by the end of this year. The government programme, Minha Casa Minha Vida, is gradually taking shape and providing much-needed homes for Brazilians.

Figures released by the Ministry of Cities show that by the end of December, a total of 1 million homes within Minha Casa Minha Vida will be under approval, built or completed. This massive real estate project in Brazil has already seen 170,000 homes completed this year with another 110,000 expected to handed over to low-income families over the next two months.

The Minister of City, Marcio Fortes, highlighted the success of Minha Casa Minha Vida so far and stressed the flexibility shown by the main parties involved in the project. Between them, the ministry, developers and Caixa bank (the provider of finance and mortgages for these properties in Brazil) are pulling out all the stops to ensure the project is a success.

Hardly a week goes by without the completion of a new Minha Casa Minha Vida project somewhere in Brazil. President Lula was recently in one of the Rio de Janeiro suburbs where he officially inaugurated the latest social housing complex to be completed in the city. The 910-home development is for Lula “a clear demonstration of how you can change the lives of the Brazilian people for the better”.

Minha Casa Minha Vida is one of the Brazilian government’s flagship programmes to reduce poverty in Brazil and allow families to buy an affordable property.

Investment in the programme runs to R$105.7 billion for a total of 3 million homes to be built by the end of 2015. The size of the investment means the project has plenty of spin-offs. Solar energy installations in the properties throughout Brazil are just one of them. The government recently approved subsidies for solar energy in Minha Casa Minha Vida homes making this one of the latest Brazilian investment opportunities.

The construction industry is also benefitting hugely from the increase in property building under Minha Casa Minha Vida. The National Construction Index is registering regular monthly increases – the latest for October points to a national rise of 0.51% on September’s figure and an accumulative figure of 7.26% for the last 12 months. Last month, the north east of Brazil saw the highest regional rise in the cost of construction with Rio Grande do Norte leading the provinces with an increase of 5.03%. Construction materials have gone up by 7.53% in Rio Grande do Norte this year, reflecting the big investment in property and infrastructure in this part of Brazil.

Minha Casa Minha Vida forms part of Obelisk’s proposals for investment in Brazil. As this giant housing project moves forward, Obelisk believes we can expect to see plenty more opportunities coupled with high returns.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Brazil Best in BRICs

Credit rating is a vital factor in investment considerations. And when it comes to a country with a stable credit rating for investment, Brazil is reportedly the best bet among the four BRIC nations and other emerging markets.

In a recent report, Standard & Poor’s finds that the stable democracy and political climate in Brazil are hugely advantageous. So advantageous that they mark the difference between investment in Brazil and the other BRIC countries (Russia, India and China). For Standard & Poor’s, Brazil’s “well-developed and stable democratic system remains the most critical factor supporting the rating and differentiating Brazil from the other BRIC countries”.

On comparison, the BRIC nations all look fairly similar. The four countries are huge in size and population – over 2 million square kilometres and home to over 100 million people – and all four have a GDP of over US$600 billion. Among the rest of the world’s nations, only the US can also boast these characteristics.

But, according to Standard & Poor’s, the similarities stop here. China and India share rapidly growing economies and the need for massive imports of commodities because of their limited natural resources. On the other hand, Brazil and Russia have wealthy economies, abundant natural resources and slower economic growth.

These elements mean that Brazil is able to maintain GDP per capita levels that are considerably higher than those in China and India. A look at graphics for GDP growth for capita clearly illustrates this. While India’s per capita growth will barely top 1% this year when China will scrape 4%, Brazil’s is forecast to grow at over 10%. For 2011 and 2012, India is expected to see less than 2% growth, China around 5% and Brazil an average of around 11%.

This impressive growth in per capita wealth translates into important potential for Brazilian investments. As the economy expands, millions of Brazilians are benefitting from the booming economy and joining the rapidly-growing middle classes.

Increased purchasing power has led to buoyant consumer spending, which registers impressive rises quarter after quarter. Unsurprisingly, Standard & Poor’s points out that “Brazil’s economic growth strategy remains anchored on the development of its domestic market”. It’s clear that the main engine driving economic growth in Brazil are the middle classes and their newly-acquired purchasing power.

Standard & Poor’s find that in some aspects, Brazil does not score as highly as the other BRICs. Brazil’s government debt is high (India’s is higher) and taxes are high on some areas of doing business in Brazil. But the credit agency praises Brazil’s low fiscal deficit, which is consistently maintained at around 2% to 3% of Brazil’s GDP. For Standard & Poor’s, this low deficit is “key to our upgrades of the sovereign over the past several years”. Another very positive factor is the “increasing reliance by Brazil on foreign direct investment”.

However, for Standard & Poor’s and for anyone looking at investment in Brazil, the over-riding difference between Brazil and the other BRICs is political. Of the quartet, Brazil is the only country with a strong and stable political system, which is ultimately its biggest advantage.

This is one of Obelisk International’s vital criteria for investments in Brazil. We believe that, while all the BRICs present interesting investment potential, only Brazil has a stable democracy that can provide a solid background for business and investment. For Obelisk International, the only BRIC offering peace of mind in this respect for investment is Brazil.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Brazilians Vote for Continuity

The Brazilians have voted for their first female president, Dilma Rousseff. By voting for Lula’s successor, the nation has made a bid for continuity, which is good news for the middle classes and for investment in Brazil.

In the recent second round of presidential elections, Dilma took 55.5% of the votes against the 45.5% of her rival, Jose Serra. Although Dilma is more of a back-office politician, her management skills and reputation for hard work led Lula to choose her as his candidate to continue his legacy.

And this legacy is an extraordinary one. Brazil is currently enjoying a booming economy, jobs are being created at an unprecedented rate, and the gap between the poor and the rich has never been narrower. For Helen Joyce, The Economist’s correspondent in Brazil, “Brazilians are feeling really good right now so people are voting for continuity”.

This continuity includes progression on the eradication of poverty, which Dilma has pledged as one of her priorities when she takes office as Brazil’s next president in the New Year. Dilma plans to build on measures already in place such as the social housing programme, Minha Casa Minha Vida and the countrywide education schemes.

Continuity also means more job creation and wage increases, the tandem behind the burgeoning middle classes in Brazil. The Brazilian middle classes are among the fastest growing in the world and their increased purchasing power offers huge potential for investment in real estate, education and insurance, for example.

Dilma will also continue Lula’s endeavour to reduce regional differences in Brazil. During the last eight years, Lula’s government has worked hard to develop the north of Brazil to bring prosperity to the region. Although there is still work to do to bring the northern half of Brazil to the same level as the southern half, the results of the large-scale investment in north Brazil are obvious.

To fulfil the nationwide wish for continuity, Dilma will maintain Lula’s highly-successful economic policies, which have led to the abundance of opportunities for investment in Brazil. In the key areas of economy and finance, Dilma is expected to choose cabinet ministers who will carry on Lula’s policies over the next four years.

It will not all be plain sailing for Dilma. The Brazilian economy has several structure problems such as excessively complex taxation rules and rigid employment legislation, and these problems need addressing. However, while Dilma is unlikely to enjoy the same level of popularity as Lula (83% currently), Brazil’s strong foundations will comfortably ensure she is able to continue along the route to further economic prosperity for all Brazilians.

At Obelisk International, we welcome the Brazilians’ vote for continuity. Never before have opportunities for investment in Brazil been so good and like the Brazilians, we are sure Dilma will keep it that way.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

J.P. Morgan’s Big Investment in Brazil

Foreign investment in Brazil continues full steam ahead. The latest addition to the investor list is J.P. Morgan who has just bought Gávea, one of Brazil’s largest hedge funds.

This acquisition is one of many this year as the world’s banks and funds turn their attention from the jaded traditional markets to the bright lights of emerging markets. Brazil with its stable democracy, steady economy and huge potential is one of the biggest attractions for financial investment. And the fact that the banking system has rock solid foundations is seen as a huge advantage by foreign financiers looking to invest in Brazil.

Gávea, based in Rio de Janeiro, is one of the biggest hedge funds in Brazil with an extensive portfolio that encompasses US$2 billion in its global fund and US$2.5 billion in private equity business. Investments in the private equity portfolio include around 25 companies in Brazil.

Leading Gávea is one of Brazil’s financial gurus, Arminio Fraga. His curriculum vitae makes impressive reading. When he was governor of Brazil’s central bank, Mr Fraga was one of the engineers of the inflation-targeting system. The system, still used by Brazil today, has been hugely successful in keeping inflation in check and therefore ensuring the economy can grow steadily. Mr Fraga is currently chairman of Brazil’s stock exchange, Bovespa, one of the fastest growing in the world and consistent producer of high investment returns.

Mr Fraga will remain at the top of Gávea and oversee the company’s incorporation into J.P. Morgan’s asset management group, which has over US$20 billion under management. For J.P. Morgan, this major move into Brazil will ensure the company continues to strive for excellence. Chief Executive of J.P. Morgan Asset Management, Mary Callahan Erdoes said “It isn’t important to J.P. Morgan to be the world’s biggest asset management but to be the best”.

J.P. Morgan is busy expanding its Brazilian Investments. The global financial services giant has increased its staff in Brazil from 300 employees to 500 this year and according to sources quoted by the Financial Times, this figure is set to reach 1,500 over the next couple of years. J.P. Morgan is extremely bullish on Brazil – the manager of the company’s Brazil investment trust recently said that “Brazil’s economic potential, fiscal soundness of its banks and cheap-stock valuations have turned Brazil into the ‘poster child’ for emerging markets”.

This year has seen a sharp rise in foreign presence in the financial market in Brazil. UBS joined forces with Pactual, a Brazilian investment bank and Blackstone acquired 40% of Pátria, one of the largest wealth management funds in Brazil. Other private equity firms are also flocking to Latin America’s largest country to take advantage of the excellent investment opportunities in Brazil.

The market research team at Obelisk has noticed a definite surge in interest in Brazil this year as more investors recognise the huge potential available throughout this huge country. As this potential develops into solid returns – and Brazil offers some of the highest investment returns around – interest will undoubtedly grow even higher.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Green Light for Investment in Brazil

The steady economy in Brazil and its stable long-term prospects mean that the excellent potential for investment in Brazil will hold steadfast whoever wins the next election. Whether Brazil’s next president is Dilma Rousseff or José Serra, analysts remain equally bullish.

According to Gabriel Gaspar, a Chilean political scientist quoted in the Financial Times (FT), there will be few surprises in store when Brazilians vote for their next president in the second round on 31 October. For Mr Gaspar, Brazil “has disciplined state finances, a growing internal market boosted by the graduation of millions of Brazilians out of poverty and into the middle class, plus growing ties with China”. And whoever leads the next government will build on this base and strengthen the potential for growth and investment in Brazil.

Other analysts, also quoted in the FT, agree with these criteria. For Will Landers, manager of BlackRock’s Latin American Investment trust, “Brazil offers the best combination of a strong top-down story and the most attractive valuations from a bottom-up perspective”.

The manager of JP Morgan’s Brazil investment trust is just as bullish. “Brazil’s economic potential, fiscal soundness of its banks and cheap-stock valuations have turned Brazil into the ‘poster child’ for emerging markets,” says Sebastian Luparia.

Experts are unanimous in that Brazil faces many challenges such as updating infrastructure and investment in human resources. The new government will have to bring these to the top of the political agenda over the next four-year presidential term. Mr Gaspar believes that while, facing the new challenges will not be easy, meeting them is more than possible.

Out-going President Lula leaves a strong legacy of international presence and his predecessor will be keen to continue this. Its importance within the continent is huge – for Mr Gaspar, “South America would have no meaning without Brazil”. On the global front, Brazil is well placed as a respected member of the G20. Few international analysts doubt that Brazil will become a member of the UN Security Council in the near future. And in terms of other emerging markets, Brazil has a far better democratic record than Russia and China, and gets on well with its neighbours unlike the other emerging BRIC giant, India.

For the majority of analysts including Mr Gaspar, Brazil’s “future path is already mapped out”. Brazil now ranks as the eighth largest economy and its tandem of a huge domestic consumer market and giant export trade should ensure this ranking rises steadily over the next decade. This inexorable rise in economy and international presence will also guarantee the potential for Brazilian investments.

Obelisk’s own market research reflects the bullishness shown by financial analysts. We too believe that Brazil is by far the best option in emerging markets and that this will remain so for the near future. For Obelisk, Brazil’s investment potential is best illustrated by Mr Gaspar’s closing affirmation that “Brazil has a dazzling green light ahead”.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Latin America Investment Leads the Way

The latest HSBC survey confirms recent Bloomberg findings and put investment in Brazil at the top of global rankings. Between them, Latin America and Brazil are world investment hotspots.

According to those polled by HSBC Holdings plc last week, Latin America represents the best prospects for growth in investment over the next six months. In the survey, 30% of businesses ranked Latin America in top position for investment opportunities in the next semester. Latin America came ahead of China (25%) and Canada (15%), two other major trading regions for importers and exporters.

Latin America is favoured for its high economic growth – the region is set to grow 4.8% this year. Leading the Latin American boom are Brazil and Peru with Colombia and Chile also experiencing strong economic growth, which emphasises the area’s potential as a whole.

Of all the Latin American nations, Chile and Brazil represent the best bets for investment. Brazil is enjoying strong growth, record employment figures and the prospect of becoming the 5th largest economic power in the world within the next decade. Contrast this with many developed countries, currently facing high unemployment, burgeoning deficits and fears of a double-dip recession.

The HSBC survey also highlights the changing dynamics in world economics as emerging markets dominate the top-performing positions. Not only have emerging markets generally experienced a short recession, they are also leading the rest of the world to economic recovery.

With emerging markets set to represent almost half the global economy over the next few years, many multinationals are convinced that investment in these markets makes real business sense. Large companies are moving into emerging markets as part of their global strategy. And Brazilian investments tops the list for many – in the HSBC survey, 74% of companies said they currently trade with Brazil and a similar figure (76%) does business with China.

A particularly strong sector in Brazil is private equity with two-thirds of private equity deals in Latin America taking place here. The latest arrival is Blackstone, who now has a 40% share in the Brazilian Pátria. For the company, the creation of the Brazilian middle classes “has got very substantial momentum” and as a result, presence in Brazil is a must. Other private equity firms such as Carlyle Group and Warburg Pincus have also expressed strong interest in Brazil, proving Pátria’s point that “the competition is coming to Brazil”.

For Obelisk, the Bloomberg and HSBC surveys underline the investment potential in Brazil. As more businesses come to appreciate this potential, more surveys will highlight the fact that Brazil is the place to be when it comes to investment. Over the next six months, Obelisk expects to be joined by many more companies in Brazil.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

The Right Location for Brazil Property Investment

The Brazil real estate market is expanding fast to meet the demands of the up-and-coming middle classes. While getting on the first step of the property ladder is the most important factor for low-income Brazilians, for more affluent Brazilians, location takes priority.

The old adage that the three most important things about a home are location, location and location, is a global fundamental when it comes to successful property investment. And investment in Brazil is no exception. As the country moves forward and consolidates its economic strength and stability, Brazil’s middle classes are looking for homes in the very best locations.

This is particularly true of Brazil’s upper middle classes, denominated Class A/B and whose monthly earnings range from R$4,902 upwards (around €2,100). Although Brazil’s Class A/B runs to just 10% of the population, their purchasing power amounts to almost half the country’s total (44.1%) and represents big money in a country where consumer spending is expected to reach R$2.2 trillion this year.

Class A/B is Brazil’s fastest-growing class and as they move up the social ladder, they have increasingly higher aspirations. Owning a bigger and better home is one of them and a top priority is the home’s location.

When looking for the ideal location, upper middle class Brazilians want areas with good amenities. Shopping centres and supermarkets form an essential part of these amenities. Shopping centres have sprung up countrywide over the last few years as Brazil’s household expenditure booms. For the upper middle class, high-end shopping malls are popular and the Brazilian retail icon, Iguatemi, is a particular favourite. A synonym of luxury shopping, Iguatemi has numerous shopping centres throughout Brazil and several new projects in the pipeline.

Tired of stressful inner city life, upper middle class Brazilians are keen to move out to the suburbs. As a result, many outlying areas of large cities are undergoing expansion to meet this demand. These up-and-coming areas offer an escape from the busy city centres but are near enough to ensure easy commuting. And this isn’t just the case with Brazil’s biggest cities such as Rio de Janeiro and São Paulo; Obelisk market research has pinpointed suburbs outside Natal in north east Brazil as these up-and-coming areas.

Good transport links are obviously fundamental and conscious of this; the Brazilian authorities are making big investment in transport infrastructure. There’s also the investment in Brazil’s forthcoming sporting events so many cities will be home to new train and metro lines, and better road communications. For example, highways are being converted into dual-carriageways to allow quicker commutes – the BR-101 in Natal is a case in point.

Like their counterparts the world over, the Brazilian middle classes want to keep up with their neighbours. For Class A/B, this means quality properties with high-end facilities in the right locations. As a result, new developments are springing up outside Brazil’s large cities. And now you can tell a prestigious area by the number of large Brazil real estate companies building there. Sales figures are also a good indication and the best developments are selling out within months.

Like the Brazilian middle classes, the investor in property in Brazil is also interested in location. Obelisk believes that if you choose an investment in a location bringing together the right ingredients to make it undeniably attractive to the middle class Brazilian buyer, the investment will be a guaranteed success. As with buying property everywhere, an investment in Brazil has to tick all the location boxes.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Brazil Investment Top for Bloomberg

It’s official – the best returns for investment are found in Brazil. According to the latest Bloomberg Global Poll, Brazil is the world’s best investment destination.

The latest quarterly Bloomberg Global Poll released in mid-September ranks Brazil as the world’s number one spot for investment returns. Sharing top place with China, Brazil stands ahead of India in third place and the US in fourth. In the previous June Poll, Brazil came second behind the US, but strong growth and a solid economy have consolidated potential for investment and made Brazil top investment destination.

The Bloomberg Global Poll is carried out among investors, analysts and traders, and provides a quarterly insight into how those in the trade perceive markets for investment. Emerging markets continue to be favourites as highlighted by the fact that Brazil, China and India take the top three positions. One respondent to the Poll pinpointed Asia and Latin America as “providing support to the global economic malaise”.

When it comes to investment, Brazil also enjoys a high degree of confidence – lack of investor confidence in the US along with slower growth were the main reasons stated in the Poll for America’s fall to fourth position. Confidence in Brazilian investments can be seen in the record number of private equity funds entering the country. Since 2008, US$4.5 billion has flowed into Brazilian private equity with flows so far this year running to US$1.5 billion.

Recent examples include BTG Fund Management who has bought the energy company Coomex and several hospital networks, and the purchase of Burger King by 3G private equity fund. One of the largest and longest-established equity funds in Brazil is Advent, a US fund, present in Brazil since 1997, who has purchased fast food companies and duty-free shops.

Confidence in investment in Brazil and emerging markets is also apparent in stock market movements since June this year. Bloomberg reports that the Brazilian stock exchange has increased by 10.56% in the last quarter with India’s Index close behind on a gain of 10.44%. In contrast, the US S&P 500 Index rose by just 3.62%.

As well as attracting investment, Brazil is also seeing huge gains in tourism. Central Bank figures point to US$489 million spending by foreigners during August, more than 7% higher than August 2009. In the first eight months of this year, foreign tourists spent US$3.86 billion, a rise of 11.54% on the same period last year.

Obelisk International is well aware of Brazil’s investment potential and the latest Bloomberg Global Poll mirrors Obelisk International’s ranking of Brazil’s as the world’s number one destination for returns. Profits offered by Obelisk in Brazil (from 50% to 100%) are undoubtedly among the best around.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.