Posts Tagged ‘Investment’

$47bn set aside for Brazil housing

Posted by Pioneer Land Group in Real Estate.

Last week the Brazil government confirmed its financial strength and stability by announcing over $47bn dedicated to housing construction loans over the next 3 years. With a housing deficit of around 9m units, these affordable houses are desperately needed and cater to the middle class market with properties valued between US$30,000 and US$80,000. Instigated via the government’s “My House My Life” program this effective real estate construction boom is fuelling strong growth amongst numerous Brazilian developers, in turn increasing private equity and FDI (Foreign Direct Investment) in to Brazil, further strengthening the economy.

Considering the increasing consumer wealth it is not only residential real estate that is receiving interest from overseas investors, but a rapid boom is occurring with commercial space including shopping malls that have produced some of the best results for various investment houses over the past few years.

A country with such extensive natural resources, and deep pockets of cash savings, Brazil’s future seems very bright indeed.

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Arabian Investors in the market for Brazilian Real Estate.

Posted by Pioneer Land Group in Economy, Real Estate.

Sotheby’s International is preparing a special portfolio of property for wealthy Arabian investors keen to take advantage of strong yields in a relatively unexposed international market. The Director of Sotheby’s in Brazil, Mr. Fabio Rossi will present the selection to groups of investors from the United Arab Emirates, Qatar and Bahrain looking at commercial real estate, farms, and hotel and tourist enterprises.

In an article for www.brazzilmag.com Mr. Rossi explained that “The return of commercial real estate in Brazil ranged from 0.8% to 1% per month”, this is against a backdrop of a global average of 3% to 4% per year. The Arabian investors have shown a keen interest in the tourism and hotels market and are particularly curious to the affects the world cup in 2014 will have on the segment. With 5 groups playing a strong hand in discussions it is believed they will look to invest some $50million each, and with 3 of the groups keen to partner with Brazilian companies, it could get very competitive come September.

Mr. Rossi goes on to say that Brazil, out of the BRIC economies has now become the number one target destination for Arabian investment. Yet the market still remains in its infancy, foreign investment into Brazilian real estate is 5% of the total compared to a global average of around 30% to 40%.

Ref: Arab Investors looking for productive land in Brazil

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Brazil ranked 2nd for venture capital investment behind China

Posted by Pioneer Land Group in Economy.

With a stable and modern financial system that has largely escaped the credit crisis, a growing economy and a legal system that respects real estate rights investors see ample opportunity in Brazil, a sentiment echoed by Coller Capital who rank Brazil as the 2nd most attractive choice behind China but ahead of India. At the end of 2008, local and foreign investors had committed $28bn in venture and private equity capital to Brazilian companies, up from $6bn in 2004. Investors have financed over 500 Brazilian companies to date, and there’s $12bn left in the kitty.

Read full report in Business Week.

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Brazil, India and China bounce back together, without the West

Posted by Pioneer Land Group in Economy.

The largest developing economies in the World are rebounding from recession much faster than the developed economies. Indeed for the BRIC this credit crunch has been more of a milestone than a recession, a point in time when the power shift occurred even more rapidly than ever. Whilst western economies continue to struggle, India and China both grew 6% y-o-y to March 09, and Brazil has rapidly regained ground and hopes to post a 4% growth by end 09. Of the BRIC, only Russia has felt the economic shock on a scale even worse than the US, a vast 9% due mainly to its dependency on oil.

So, Russia aside, the “big future three” seem to be getting along fine and seem content to work together and with other developing nations to achieve their goals. China is buying millions of acres of farmland in Africa and South-East Asia, and has overtaken America as Brazil’s largest export market, the latter being incredibly good news for Brazil, who is also now the largest exporter to India. China is using $2trn of its foreign reserves to invest in other emerging markets, an example of which is $10bn going in to Petrobas, Brazil’s state-run oil company.

Importantly Brazil is still not too dependent upon its exports, accounting for only 15% of its GDP … much smaller than developed economies. Investors should look for ways in to Brazil, India and China as their economies rebound and will catch up very fast over the coming decade.

For the full story read The Economist.

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China invests in Brazil more than ever

Posted by Pioneer Land Group in Economy.

More money is flowing in to Brazil in 2009 than the year before, very good news for the Brazilian economy.

In June 09 alone the Central Bank of Brazil reported a surplus inflow amounting to $866 million, four times larger than the net financial outflow of $205 million. A net inflow of $661 million in the first half of June 2009 is much better than the net outflow of $143 million a year ago, but where is all this money coming from, and why?

As China recovers it has been buying goods from countries around the World. Countries it chooses to trade with. China started ordering more goods from Brazil in February of this year and, ever since, Brazil’s economy has been improving. Specifically, China is buying Brazil’s iron ore, airplanes, raw materials and agricultural products.

With a strong central bank at the helm to control inflation and manage these cashflows, we expect even more economic growth stories to come out of Brazil in the next few months.

For a full report see World Currency Watch.

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Branded hotels are leading asset class investment in Brazil

Posted by Pioneer Land Group in Real Estate.

Hotels are among the leading asset class for investment in Brazil according to Jones Lang LaSalle hotel research team. Brazil’s economy, while exposed to the global financial crisis, is forecast to suffer less and for a shorter duration than the worlds mature economies.

Devaluation of the Brazil Real since Sept 08 has prompted a favourable dichotomy for Brazilian hotels: its more expensive for Brazilians to travel abroad, while less expensive for incoming foreigners. Brazil has a very favourable medium to long-term outlook for hotel fundamentals with over 50% of households being middle class, and upper class now accounting for 16% of households.

Currently only 12% of hotels in Brazil are affiliated with international brands, however that is changing with the realisation of this enormous market gap. “Branded hotels present the most viable investment opportunity in Brazil due to the strong domestic market” said Clay Dickinson, executive VP for Jones Lang LaSalle Hotels. Full story at Hotel Interactive.

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Brazil to grow above global average in 2009

Posted by Pioneer Land Group in Economy.

Brazil’s economy is in a strong position to weather the financial crisis and will grow above the global average this year, Brazil’s Central Bank President Henrique Meirelles said on Sunday. ”We are in the process of reviewing our forecast but our estimate is that we will grow above the global average,” Meirelles told journalists during a meeting of Ibero-American finance officials in Portugal. He said Brazil’s economy was in a strong financial position, with $200 billion in net foreign reserves. “This will allow the country to face scarcity of international finance,” he said.

The government has said Brazil would grow 4% this year while economists think it may be closer to 1.5%. ”Brazil is confronting this crisis in a better position than in the past and more advantaged than many other regions of the world,” he said. Brazil was growing strongly but has been hit by the financial crisis as it experienced a sharp fall in the commodities it sells to the world. Meirelles said domestic demand continued to grow.

Full report from Reuters.

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