Investment in Brazilian property are changing as international investors look to buy real estate outside of Rio de Janeiro, Sao Paulo and Minas Gerais, the three cities traditionally seen as attractive areas.
The property market in Brazil has gone from strength to strength recently, as the booming economy has created a new and more numerous middle class.
This group is keen to spend and even more interested in homeownership, with the number of Brazilians seeking to buy property in the next 12 months increasing from 4.2 million in 2009 to 9.1 million this year.
While Rio de Janeiro, Sao Paulo and Minas Gerais have traditionally been the big players in Brazilian property, many investors and potential homeowners are now looking further afield as the thriving economy has a dramatic effect on traditionally poor areas.
North-east Brazil is an excellent case in point the region has long been regarded as a deprived area, however as a result of the economy, it has had to grow at a rapid pace in order to keep up with the rest of the country.
According to Obelisk International, the main cities in north-east Brazil have grown three times as fast as Sao Paulo, transforming them into a place for viable property investments.
“The new wealth translates into a wide range of business opportunities as entrepreneurs make the most of the new locations for investing in Brazil,” the property investment firm said.
It claimed that MRV Engenharia, the third largest developer of property in Brazil, has launched a new range of developments this year, 50 per cent of which are not in its traditional stomping ground of the south east.
The firm is said to be “very impressed” with its results so far in the north east.
As is Californian public pension funds (CalPERS), along with sustainability specialist developer Hines, which last week cashed in $160million (£98 million) from the sale of property investments in Rio de Janeiro and other cities across Brazil.
“These significant earnings are a credit to the fine work of Hines and an affirmation of our new strategy to deploy up to 15 per cent of our real estate capital to growth markets like Brazil and China,” said CalPERS chief investment officer Joseph Dear.
“Were excited about our prospects in these emerging markets to build portfolios of high-quality, income-producing assets and development projects,” he added.
Obelisk International said that the increase in popularity of the north east and the resulting shift in business dynamics is set to continue as the middle classes carry on growing and spending money.
“The opportunities for investment in Brazil are so good that many Brazilian businesses are reportedly no longer considering expansion abroad. A booming economy together with the diversity of Brazil means doing business on home ground is more attractive, easier and lucrative than overseas,” the organisation said.
It is evident that it is not only domestic companies which are keen to pour investment into north-east Brazil though.
The World Cup stadium in Natal, in the state of Rio Grande do Norte, has prompted local investment in infrastructure, while at the same time Denmark-based Vestas has secured an order from a consortium created by Brennand Energia and Companhia Hidro Eletrica do Sao Francisco to supply wind-turbines to the region.
It will provide Sao Pedro do Lago, Pedra Branca and Sete Gameleiras wind parks, all in the north-east state of Bahia, with ten of the companys V90-3.0 megawatt machines and 30 of the V100-2.0 megawatt devices to create developments with the potential to generate up to 90 megawatts.
As Obelisk International explained, it is no longer necessary to focus on the south east to have a successful investment in Brazil.
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