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Commercial Real Estate in Brazil Stands Out

10-10-2011 10:06 AM CET | Industry, Real Estate & Construction

Press release from: Obelisk International

Obelisk International - Investments in Brazil

Obelisk International - Investments in Brazil

Residential property in Brazil is not the only real estate sector experiencing a boom. A recent report finds that Brazilian commercial real estate stands out in Latin America as a top investment opportunity.

CB Richard Ellis’ report, Outlook for Latin America’s Commercial Real Estate Markets, published last month, paints an extremely bullish picture of all sectors of commercial real estate in Brazil. Office investment takes the lead with industrial space and the retail sector also presenting very healthy returns.

The Outlook finds that when it comes to commercial real estate, Brazil dominates the region. Commercial real estate investment in Brazil accounts for 75% of transactions in Latin America so far in 2011 – Chile is the nearest competitor with just 11% of transactions. Furthermore, CB Richard Ellis (CBRE) highlights that the 400% growth in transaction volume this year means Brazil now ranks among the top ten global investment markets for the first time.

Bright Regional Outlook

The report initially focuses on Latin America’s economic prospects. CBRE quotes regional growth figures of 4.7% for both this year and next within a global context of 3.5% in 2011 and 4% in 2012. Latin America is predicted to achieve the second highest regional growth after Asia, one of the reasons for the big interest in the region from foreign investors such as Obelisk International.

CBRE also finds that unlike the US and several European nations, “fiscal balance sheets in Latin America are relatively healthy”. Strong economies and large foreign reserves in Brazil and Mexico are added incentives when looking for investment opportunity. What is more, CBRE concludes that “foreign bond investors now appear to view Mexico and Brazil as less risky than certain developed markets in Europe and North America”.

Office Space Investment in Brazil

The bulk of commercial real estate transactions in Brazil fall within the office sector, particularly in Rio de Janeiro and Sao Paulo. According to CBRE, office space in Brazil’s largest cities is at a premium as huge demand from Brazilian and foreign companies outpaces levels of construction.

Vacancy rates for office real estate in Brazil ranged between 3% and 5% in Q2 this year, a low level that is pushing prices sky high. In Rio de Janeiro alone, office rentals have increased by almost 8% this year. For CBRE, prime office space in Brazil is among the most expensive in the world.

Industrial Investment Opportunity

Coming a close second to offices in terms of Brazilian real estate transactions is industrial space. In Q2, Class A industrial vacancy rates stood at 4.8%, their lowest ever. Like the office real estate sector, Brazilian industrial space suffers from the imbalance of supply and demand, although CBRE reports that a lot of new industrial developments are becoming available.

In conclusion, CBRE finds that Brazil presents one of the best potentials for property investment in Latin America. The Outlook states that “2011 will go down as one of the best years in terms of industrial absorption levels across Brazil” and adds that opportunity for investment in Brazilian industrial markets will also be good in 2012.

For Obelisk International, the Outlook confirms the excellent potential for property investment in Brazil and across all sectors of the market. “It shows how Brazilian real estate generally is expanding and offering excellent returns at all levels,” says Gary Hardacre, CEO of Obelisk International. “Whether your investment is in social housing, office blocks or industrial units, Brazil provides the property investor with great potential for income growth.”

About Obelisk International: Obelisk International offers select investment opportunities in Brazil in a range of sectors such as social housing, residential real estate and construction. Obelisk gives investors security, profitability and diversity thanks to a combination of close attention to our clients' investment requirements and high quality in-house research and analysis.

For more information on Brazilian investments and to find out about Obelisk International’s latest opportunities for investment in Brazil, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com. Follow us on Twitter – @obeliskinvest and Facebook. Join the Obelisk International network on LinkedIn.

Obelisk International
Apdo de Correos 977
29601 Marbella, Spain
tel: +34 952 820 319
Email: press@obeliskinternational.com
http://obeliskinternational.com

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