Brazil Real Estate Report Q1 2012
Business Monitor International, November 2011, Pages: 57
Business Monitor International's 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.
An epic real estate boom continues in Brazil. In June 2011 BMIs in-country sources reported that rents have been growing at double-digit rates in most of the nine sub-sectors that BMI survey. Further, rent increases – if at a more measured rate – are expected in 2012. A rise in rents relative to capital values means that yields appear to be rising. However, taking the long-term view, BMI expect yields will fall as perceptions of the risks of Brazilian investments drop.
The real estate sector is benefiting from an export-led boom (which, among other things, has driven vacancy rates for prime São Paulo office space down to negligible levels.) Meanwhile, retailers and mall owners are benefiting from a surge in household incomes. BMIs in-country sources indicate that conditions are favourable for owners/operators of industrial real estate as well.
Some of the key opportunities currently in the real estate market are:
- The government’s hugely successful Minha Casa Minha Vida programme. This involves subsidies that enable the funding, construction and sale of affordable housing to low-income groups. One outcome is, effectively, a one-off lift in the spending power of low-income households. Plan II of the programme is under way and will involve the construction of another 2mn homes prior to the end of 2014 – notably in the poorer northeast region.
- Investments in infrastructure that are associated with the 2014 FIFA World Cup and the 2016 Olympics.
- The relative ease of access to capital from foreign institutions, through Brazilian banks and through the local stock market, has probably never been greater. Some key risks to the current real estate market are:
- The lingering problems of bureaucracy and a cumbersome legal system – which have acted as a barrier to entry for real estate development.
- The availability of suitable sites for construction of housing – particularly considering the requirements of the Minha Casa Minha Vida programme.
- Further tightening in monetary policy by the central bank. The peculiar nature of the boom in Brazil is such that it should be able to survive further rate hikes and restrictions on capital inflows. However, it would be extraordinary if there was no adverse effect.
Executive Summary
SWOT Analysis
Brazil Real Estate SWOT
Brazil Economic SWOT
Brazil Business Environment SWOT
Real Estate Market Overview
Real Estate Market Analysis
Table: Brazil’s Real Estate Market – Rentals, 2010 And 2011 (per m²/month, US$)
Table: Brazil’s Real Estate Market – Net Yield, 2011-2012 (%)
Table: Brazil’s Real Estate Market – Terms Of Contract/Lease, Mid-2011
Industry Forecast Scenario
Real Estate Outlook
Table: Brazil’s Real Estate Market – Forecast Rents, 2011-2012 (per m2/month, US$)
Table: Brazil’s Real Estate Market – Forecast Net Yield, 2008-2016 (%)
Construction And Infrastructure Outlook
Table: Brazil Construction And Infrastructure Industry Data
Table: Brazil Construction And Infrastructure Industry Data
Construction and Infrastructure Forecast Scenario
Macroeconomic Outlook
Top Infrastructure Projects By Value
Brazil – Economic Activity
Business Environment
Table: Latin Americas Business Environment Ratings
Brazil's Business Environment
Table: BMI Business And Operation Risk Ratings
Institutions
Table: BMI Legal Framework Rating
Infrastructure
Table: Labour Force Quality
Market Orientation
Table: Latin America, Annual FDI Inflows
Table: Trade And Investment Ratings
Table: Top Export Destinations
Operational Risk
Competitive Landscape
Company Profiles
BR Malls Participações
Camargo Corrêa
Construtora Norberto Odebrecht
EVEN SA
Multiplan Empreendimentos Imobiliários
OAS
Trisul
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
Sources
- Bechtel
- Balfour Beatty US
- Skanska US
- Global Infrastructure Partners (GIP)
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