Diversity is Key to Brazilian Real Estate Investment | Obelisk International

With strong driving forces behind it, there’s every sign that the Brazilian real estate market is set to continue to boom. In this scenario, the key to the investment in property in Brazil is diversity.

With record levels of construction and foreign investment, Brazilian property is experiencing rapid expansion. This growth means both prices and returns on investment in Brazil are rising. What is more, these high prices and returns can be found across the whole spectrum of real estate in Brazil.

Brazil’s residential property market is seeing steady price hikes, particularly in the largest cities and the north and north east regions. On the Brazilian commercial property front, rentals of offices in Sao Paulo, Rio de Janeiro and Brasilia are at their highest ever, particularly at the high end of the market. ‘A’ grade offices are expected to reach rental levels of R$200 per square metre per month this year. Record rents are also forecast for units for industrial and logistical use.

Future Trends for Brazil Property

Analysts agree that the current expansion of the Brazilian real estate market is likely to continue because of the demand drivers in place. In a recent article, the Association for Mortgages in Brazil (ABECIP) highlights the huge potential in Brazil.

ABECIP points out that Brazil is a world leader in production of several commodities including iron ore and soya. The growing middle classes in Brazil need properties, goods and services. These factors together with the higher building costs and scarcity of land lead ABECIP to believe that prices for Brazilian real estate will continue to rise for at least the next three years.

ABECIP also points out that the Brazilian property market has two direct competitors putting pressure on prices. These are the government Growth Acceleration Programme, which includes the social housing scheme, Minha Casa Minha Vida, building 3 million homes by the end of 2014 and the forthcoming world-class sporting events.

Best Real Estate Investment

In this scenario of expansion and rising prices, ABECIP recommends diversity when investing in Brazilian real estate. The association advocates investment in a variety of products within the wide spectrum of residential and commercial property in Brazil. As different products have different potential and risks, this will ensure the investor spreads both risks and returns.

Obelisk International also recommends a varied portfolio for any investor in Brazil. Obelisk International’s latest product launch provides the chance to invest in five different products. Developed by the most successful real estate company in Brazil, all five products have been carefully selected and between them, provide an excellent opportunity to invest successfully in one of the world’s most buoyant property markets.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Emerging Trends in Brazilian Real Estate 2011

The 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 is all about two countries”, Mexico and Brazil.

Brazilian Real Estate Trends

Brazilian real estate 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, ‘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. Our presence in north east Brazil means we can call on local companies and insider connections to make sure we offer only the very best investment opportunities.

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

Keep Right Up to Date with the Guide to Investment in Brazil

The world of investment moves fast and to keep up with the very latest in Brazil, Obelisk has just fully updated the Brazil Investment Guide. This guide with 24 full-colour pages of information brings you right up to date with the many investment opportunities available in Brazil. The updated guide is downloadable free in pdf format from the Obelisk website.

The Brazil Investment Guide has been one of Obelisk’s most popular guides to date. The guide forms part of the Obelisk tradition of providing cutting-edge investment information, but as well as looking at property, it also provides an insight into the many investment options in Brazil. So, as well as finding extensive information about the Brazil property market, the investor can also explore other less-known areas of investment such as agriculture and green energy.

Since the guide was published in June, many things have happened in Brazil. For example, Latin America’s biggest country became the world’s 8th largest economy; Brazil clearly proved it had left the world recession well behind; mortgage lending continued to soar; and Dilma Rousseff became Brazil’s new president. The updated guide covers all these and more.

The revised guide offers the latest figures on those aspects of Brazil’s economy that are most important from an investment perspective. These include GDP figures (from the most recent quarter available to the latest predictions for this year and beyond), unemployment, inflation, consumer spending and levels of foreign direct investment.

With updated facts and figures, the guide examines the many focal points for foreign investment in Brazil. These include the construction industry, commodities, agriculture, social housing and stocks and shares. Investors may be surprised to discover that 19% of the world’s agricultural land is in Brazil; that annual sales in construction materials are predicted to rise by almost 70% by 2016; and that since 2005, Brazil has the world’s second highest growth rate in clean energy investment. Not to mention that the government is building 3 million low-cost homes by the end of 2014 within the Minha Casa Minha Vida programme.

The Obelisk Brazil Investment Guide takes a look at the myriad investment opportunities in Brazil against a background of emerging markets worldwide. Brazil, along with China, India, Indonesia and Russia, is at the forefront of emerging market economies, currently leading the global economy. The guide also outlines Brazil’s exciting future, about to unfold to the tune of massive oil exploitation and the world’s top two sporting events – the 2014 World Cup (held at locations throughout Brazil) and the 2016 Olympics in Rio de Janeiro.

Obelisk has been present in Brazil for several years and we are well aware of the huge investment potential found there. However, we are also aware of the difficulties and the guide to investing in Brazil sounds a note of caution for investors. Widely considered the current ‘land of opportunity’, Brazil is not an easy country to do business in and many doors are closed to newcomers in Brazil without bona fide local associates. ‘Who you know’ is fundamental to Brazilian business practice and the basis to successful investment.

Obelisk believes that this guide offers an essential insight into opportunities for investment in Brazil. The guide provides the first step to investment – that all-important background knowledge that is right up to date. Why not download your free copy of the Brazil Investment Guide from the Obelisk website www.obeliskinternational.com and discover for yourself why “Brazil is well positioned as a future powerhouse” (Ernst & Young, Sept 2010).

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