Highly favourable exchange rates and excellent real estate opportunities in Brazil are drawing some of the world’s largest investment companies to the country. Major players on the international property scene are buying big stakes in development companies and property itself.
The Brazilian economy is currently facing several challenges, but this situation has not deterred foreign investors. Far from it – according to the Wall Street Journal, international investors are out in force bargain hunting in Brazil. The latest arrivals include big names such as Blackstone Group, Brookfield Property Partners and Global Logistics, all busy buying up Brazilian property.
Blackstone has purchased shares in a Brazilian property development company plus four office blocks in Rio de Janeiro, the venue for next year’s Olympic Games. Blackstone’s view of Brazil is so bullish that the international investment company is setting up its own office in the country. The group’s chief investment officer, Kenneth Caplan said, “it does feel like now is an interesting moment and we’re starting to see opportunities that we weren’t seeing six months ago”.
This sentiment is echoed by Brookfield who has purchased seven office buildings in Brazil. Ric Clark, Brookfield’s chief executive for property claimed “it is a good time to buy”. Part of the reason behind this is the recent strength of the US dollar, which has caused the Brazilian real to weaken, enhancing investment opportunities in Brazil for foreigners. The current exchange rate means property in Brazil costs almost half as much as it did in 2011.
Global Logistics is also increasing its investment in Brazil. The Singapore-based company focused on industrial properties in 2014 (it purchased 34 at different locations) and this year has turned its attention to development sites.
Several key global investment players continue to boost their presence in Brazil. Sam Zell upped his investment earlier this year with the purchase of a storage company in Paraná and is reportedly sourcing more. As is his former partner, Gary Garrabrant with his own company, Jaguar Growth Partners.
Tishman Speyer Properties, a property developer present in Brazil for over 20 years, is reinforcing its presence and has purchased a development site in Belo Horizonte. “Brazil has some core strengths that haven’t changed despite the current challenges,” said Rob Speyer, the company’s co-chief executive. These include abundant natural resources and the country’s growing middle class. The rise in consumers with ever increasing purchasing power is the investment fundamental cited by Zell who believes that Brazil has “scale”.
Source: Wall Street Journal