Brazil Real Estate Report Q1 2011

Brazil Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's Real Estate industry.
The Brazilian real estate market is expected to continue growing, unaffected by the second round of the presidential election at the end of October 2010. The civil construction and domestic mortgage booms will continue, alongside rising property prices and demand. In the election, Dirma Rousseff won the most votes in the first round of votes on October 4, and must now gain over 50% of the votes to beat rival José Serra in the second round. She is widely expected to succeed.

Brazil’s economy has performed strongly in 2010. They have revised up their forecasts for Brazilian real GDP growth to 7.2% and 4.5% in 2010 and 2011 respectively (from 6.0% and 3.6% previously), on the back of stronger than anticipated Chinese demand and expansionary credit conditions. Private consumer spending, investment and a strong export sector will be the key drivers of growth, as well as the impetus to investment and tourism provided by the 2014 FIFA World Cup and the 2016 Olympics

Following interviews this year with local sources, it has emerged that net rental yields in São Paulo and Rio de Janeiro have fallen sharply, while rental rates are consolidating. These movements demonstrate that capital values have soared in the office, retail and industrial sectors. While rents in São Paulo and Rio de Janeiro have stabilised, there has been a modest increase in Fortaleza, signifying office space supply has caught up with demand, after being at a low level at the beginning of 2010.

Local interviewees predicted that there will be a steady growth in rents beginning in 2011, which may extend to double-digit growth in some sub-sectors. Rental yields will gradually fall in Rio de Janeiro and São Paulo, with capital values increasing relative to rental rates. Rental yields are expected to remain steady in Fortaleza.

Brazil’s Agrarian Development Ministry confirmed in June that foreign real estate investors wishing to purchase agricultural land will face tighter restrictions. This measure is designed to protect Brazil’s food, water and other natural resources.

A program to create affordable housing for low-income Brazilians, the Minha Casa, Minha Vida (My House, My Life) campaign, has been in place since March 2009. It is a means of addressing the housing shortfall of about 10mn houses, as well as alleviating the wide inequality gap. The government plans to build over 4mn houses by the end of 2014 (including 1mn in 2010), and has provided an initial outlay of over BRL64bn. The program is seen as one factor sustaining Brazil’s healthy housing market.

A new official commercial property index is being developed for Brazil jointly by a leading research institution and a university, FGV and IBRE. It is expected launch in late 2010, and will increase transparency in the sector, especially given the ambiguity of current statistics, which generally rely on real estate agents and portals.

Executive Summary
SWOT Analysis
Brazil Real Estate SWOT
Brazil Economic SWOT
Brazil Business Environment SWOT
Regional Real Estate Overview
Table: Latin American Office Markets At A Glance – Rental Costs, 2009-2011 (US$ per m2 per month)
Table: Latin American Retail Markets At A Glance – Rental Costs, 2009-2011 (US$ per m2 per month)
Table: Latin American Industrial Markets At A Glance – Rental Costs, 2009-2011 (US$ per m2 per month)
Real Estate Market Overview
Table: Brazil’s Real Estate Market – Rentals, 2008 And 2009 (m²/month, BRL)
Table: Brazil’s Real Estate Market – Net Yield (%)
Table: Brazil’s Real Estate Market – Terms Of Contract/Lease
Table: Brazil’s Real Estate Market – Available And Vacant Space (m²)
Forecast Scenarios
Real Estate Outlook
Table: Brazil Real Estate Markets - Forecast Net Yield (%)
Construction And Infrastructure Outlook
Macroeconomic Outlook
Table: Economic Activity
Business Environment
Real Estate/Construction Business Environment Ratings
Table: Latin America Business Environment Ratings
Brazil’s RECBER
Latin America Project Finance Ratings
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating
Brazil’s Business Environment
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Table: Foreign Direct Investment Inflows Into Latin America, 2006-2008
Table: Brazil’s Top Export Destinations, By Destination Country, 2001-2008 (US$mn)
Table: Trade And Investment Ratings
Company Monitor
BR Malls Participações
Grupo Camargo Corrêa
Construtora Norberto Odebrecht
Even Construtora e Incorporadora (EVEN SA)
Multiplan Empreendimentos Imobiliários
OAS
Trisul
Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Real Estate/Construction Business Environment Rating
Table: Weighting Of Indicators
Project Finance Ratings Indicators
Table: Design And Construction Phase
Table: Commissioning And Operating Phase – Commercial Construction
Table: Commissioning And Operating Phase – Energy And Utilities
Table: Commissioning And Operating Phase – Transport
Sources

- BR Malls Participações
- Grupo Camargo Corrêa
- Construtora Norberto Odebrecht
- Even Construtora e Incorporadora (EVEN SA)
- Multiplan Empreendimentos Imobiliários
- OAS
- Trisul

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