Brazil

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Brazil is by all means a vast country with an area that covers 8,514,215 km² and occupies about half of South America’s land mass. With four different time zones and a wide range of climatic regions, Brazil has established itself as  new emerging market for luxury development. A new report released by Knight Frank clearly indicates that things have only just started to heat up in regards to Brazil’s real estate market.

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Designed by internationally acclaimed Brazilian architect David Bastos, the Natal Ocean Club will be the premier resort development in North East Brazil. Wide open spaces and rich local woods will jostle for attention along the design aspects of the resort. Having put a lot of thought into the environment and surrounds, David Bastos has chosen to use a vast range of natural materials in NOC’s development.

Combined with the best of technology, Natal Ocean Club will provide residents with all aspects of luxurious, modern living in the 21st century.

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The Brazilian Grand Prix was nothing but spectacular and loaded with suspense for title contenders Felipe Massa and Lewis Hamilton. Die-hard F1 fans couldn’t have wished for a more thrilling end of season finish than in this race.

It had all the makings of a nail biter and didn’t disappoint in the end. Rain at the start of the race saw David Coulthard make an unplanned exit to his last Grand Prix race after Nico Rosberg nudged him into a spin.

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This pre-launch resort consists of 560 hectares of coconut palms, lagoons, mangrove glades and stunning palm-fringed beaches. Situated on the exclusive Brazilian north east coast beach town of Pernambuco, it is set to be a world class resort. The developers have decided to keep the name of the resort private until its launch.

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Brazil is hot property right now and has been for a couple of years. In fact, some of Brazil’s hottest regions have appreciated a lot in the last five years. Some say the situation is much like it was in southern Spain some 20 years ago.

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With the cost of living sitting at around 1/5 of that in Britain, Brazil is right now one hot real estate market. It isn’t hard to see though why Brazil suddenly sits in the international spotlight as the new darling for overseas investors.

With year round sunshine, a stable political economy and many undervalued homes due to Brazil’s economic stagnation and currency volatility in the late 1990s, property investors have their eyes set on Brazil.

The growing infrastructure as well as an ever increasing international flight network make Brazil close to a fast stop over even for Europeans. A flight from Portugal to Natal, the capital city of the Rio Grande do Norte takes only 7 hours. You could have breakfast in Portugal and dinner in Brazil if it wasn’t for the time difference.

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US investment firms are setting their sights on the Brazilian real estate market, lured by economic fundamentals.

SAO PAULO – From the middle-class residential market to the A-class office space segment, the real estate sector is going through a period of intense business activity that has not been seen for a long time. The lasting decline in domestic interest rates coupled with low inflation and high liquidity in the international capital markets have led investors to take a closer look at the giant Latin American market.

Those who had injected a large amount of cash in Mexico in the beginning of the decade are now keen on seeing Brazil as their next big move.

“It’s really like a tsunami coming,” says Paul Weeks, head of capital markets at Cushman & Wakefield in Sao Paulo. “For years and years, we have been waiting for foreign investors. In the past six months, they have been coming like in a tidal wave. There is so much money coming in this country.”

SAM ZELL BUYS

Take Sam Zell. The U.S. billionaire has recently gone on the shopping spree after selling Equity International at home. In a few bold moves, he has already won back its initial bid, such as in the transaction with Gafisa, a high-profile building company in Sao Paulo. Only months after he bought a 32 percent stake for $55 million, he reduced it to 27.7 percent and got his money back. He then acquired a 14 percent stake in Ecisa, the owner of seven shopping malls in the country, which he later increased to 55 percent in partnership with GP Investimentos, a local private equity fund.

Last June, he launched his most ambitious move with Bracor, a joint venture with a local investor, Carlos Betancourt. Bracor initially planned to invest $200 million in industrial and commercial buildings, but it already intends to spend another $120 million within two years.

Investors who have had a taste of the Latin American potential in Mexico are now increasingly turning their attention to Brazil, as the economic fundamentals look sound enough.

“Sam Zell is a bit like Bill Gates,” Week says. “When he goes into the market, people usually follow him like sheep.”Credit Suisse, Lehman Brothers, Bear Sterns, Merrill Lynch are all ready to step in, he says.

MORGAN STANLEY FUND

And Morgan Stanley Real Estate has just launched a $200 million fund focusing mainly on the residential segment. Foreign investors were also responsible for 75 percent of the funds that were raised as part of last year’s eight IPOs in the sector, including Gafisa, GP Investimentos, and Sao Carlos Empreendimentos e Participantes.

Significantly, GP announced the launch of a new company, BR Properties, on January 2nd, in partnership with Banco Safra and foreign investors (Lehman Brothers Real Estate Partners, Sandell Asset Management, Tudor Group, Talisman Fund and The Peter Malkin Family and Belfer Management). The company, which is to focus on commercial office space, has an initial capital of $25 million that is due to be increased to $100 million at an unspecified date.

Meanwhile, Sao Carlos has already been responsible for one of the largest transactions in the commercial market. The company, which was launched by Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles – the owners of the popular retailer Lojas Americanas – acquired almost half of the Eldorado Business Tower, a 32-story state-of-the-art building being built in Sao Paulo.

Foreign investors will increasingly seek to control entire buildings, according to market analysts. With a 14 percent vacancy rate in Sao Paulo, the main office market in the country has now recovered from the crisis of the past five years (in 2005, the vacancy rate hit 20 percent) and is now ready for take-off. Prices of A-class office space are still only at the level they were in 2000, but they should keep on increasing as the vacancy rate is expected to fall again this year.

Source: Latin Business Chronicle