WHEN, in 2001, Goldman Sachs dreamt up the acronym BRICs for the largest emerging economies, the country that most people said did not belong in the group was Brazil.

Today, the leading candidate for exclusion is Russia. But some prominent observers are still sceptical about Brazil’s prospects. A notable example is Martin Wolf, the chief economics commentator of the Financial Times, who recently (and very reasonably) pointed out that Brazil’s share of world output has actually fallen over the past 15 years, from 3.1% in 1995 to 2.9% in 2009 at purchasing-power parity. “Brazil cannot become as big a player in the world as the two Asian giants”, China and India, Mr Wolf concludes.

At a recent meeting with a group of investors in Hong Kong, Rubens Ricupero offered an intriguing counterargument. A long-serving and respected Brazilian diplomat, Mr Ricupero was the secretary-general of the United Nations Conference on Trade and Development from 1995 to 2004. Although he has links to the opposition to Brazil’s ruling Workers’ Party—he previously served as finance minister in the government of a rival party—his analysis is not party-political. “For the first time in its history,” he argues, Brazil is enjoying “propitious conditions in four areas that used to pose serious limitations to growth.” They are:

Commodities

Commodity production used to be regarded as either a curse or, at best, something countries ought to diversify away from as quickly as possible (which Brazil itself did in the 1970s). But over the next fifty years, Mr Ricupero notes, half the expected increase in the world population will come from eight countries, of which only one—America—is not sucking in commodities at an exponential rate of increase. The others are China, India, Pakistan, Nigeria, Bangladesh, Ethiopia and Congo. China alone will account for 40% of the additional demand for meat worldwide, he points out. This demand will remain strong partly because of rising population and partly because of urbanisation, which increases demand for industrial commodities (like iron ore to make steel) and meat (because urbanisation changes eating habits). Brazil is already a large iron-ore producer, and has transformed itself into an agricultural powerhouse over the past 10 years, becoming the first tropical country to join the ranks of the dominant temperate-climate food exporters such as America and the European Union. It is well-placed to benefit from the emerging markets’ commodity boom.

Petroleum.

Mr Ricupero argues that the success of the Brazilian state oil company, Petrobras, in offshore oil exploration has transformed Brazilian energy. “Although no precise and final estimates can be made yet of the [so-called] pre-salt oil reserves potential of the Santos Basin,” he says, “all serious indications point to the high likelihood that Brazil is poised to become at least a medium-sized net oil-exporting country.” New oil and gas deposits far away from the volatile Middle East should increase Brazil’s strategic importance, as well as improving its balance-of-payments position.

Demography.

Brazil is reaping a big demographic dividend. In 1964, its fertility rate (the average number of children a woman can expect to have during her lifetime) was 6.2. It fell to 2.5 in 1996, and is now below replacement level, at 1.8, one of the sharpest drops in the world. The result has been a collapse in the dependency ratio—the number of children and old people dependent on each working-age adult. As recently as the 1990s, that ratio was 90 to 100 (ie, there were 90 dependents, mostly children, for each for every 100 Brazilians of working age). It is now 48 to 100. Thanks to this, Brazil no longer has to build schools, hospitals, universities and other social institutions helter-skelter to keep pace with population growth. Eventually, the ratio will creep back up as today’s workforce enters retirement, but such problems remain decades ahead. In the meantime, Brazil can pay more attention to the quality rather than the quantity of its social spending, which should, in theory, improve the population’s education, health, and work skills.

Urbanisation.


Urbanisation both encourages economic growth and accompanies it. But it also causes problems. “Many of the worst contemporary problems in Brazil,” Mr Ricupero says, such as “lack of educational and health facilities, poor public transportation, marginalisation and criminality, stem from [an] inability to cope with internal migrations in an orderly and planned way.” That is now changing, he argues. The waves of migrants out of the countryside and into the cities have more or less finished. Brazil is now largely an urban country: about four-fifths of the population lives in cities. “For Brazil,” he concludes, “the period of frantic and chaotic growth of big cities that is now taking place in Asia and Africa is already a thing of the past.”

Mr Ricupero is relatively cautious about the conclusion. “The four sets of conditions outlined above,” he says “are by no means sure guarantees of automatic success.” He admits Brazil has fallen behind in infrastructure, for example, and says that, if it had the sort of infrastructure you see in Costa Rica and Chile (the two best examples in Latin America), economic growth would be about two percentage points higher per year. On the other hand, Brazil also has some other advantages: unlike China, Russia and India, it is at peace with its neighbours (all 10 of them). Whether you think all this really amounts to a rejoinder to Mr Wolf is a matter of doubt.

Brazil might still remain a relatively small player in the world. Still Mr Ricupero’s points are, at least, actually happening (not things expected in future), can be measured in concrete terms and are long-term (they should continue for decades). Who knows? Perhaps they might even be right.

Jul 26th 2010, 16:34 by The Economist online | SÃO PAULO

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The event is set to take place at the Majestic Palace Hotel, a 5 star hotel overlooking the North Bay in the city of Florianopolis, Santa Catarina, Brazil.

Among those confirmed to attend are: Hélio Bairros, president of Sinduscon/SC, Hermano Carvalho, director of investment promotion for the Ministry of Tourism, Julio Gavinho, director of development for Hyatt International, Adriano Mantesso, supervisor of Brazilian Capital, Paul Weeks, manager of Charlamagne Capital and Viviene Boverio, director of investment acquisitions for Starwood Hotels and Resorts.

The event promoted by ADIT Brasil will count on the presence of directors of acquisitions and investments from Starwood Hotels, Viviene Boverio, director of development for Hyatt, Júlio Gavinho, and director of Hilton Hotels, Paula Renata Muniz. Discussion topics will include plans for Brazil from groups such as Starwood Hotels, Accor Hotels, Hilton Hotels and Hyatt International.


For Ms. Boverio, Brazil’s moment is unique, seeing as there is a growth in the economy, the largest influx of Brazil’s capital, economy and growth in the tourism sector guarantees sustainability to insert new high quality hotels with an international seal. “In this scenario, our plans for Brazil are to grow. First hand, I will tell ADIT that our company is open to study joint ventures, co-invest and/or search for investors for projects in Brazil. We are looking to invest in the capital areas, including Florianópolis”, said Boverio.

The director of development for Hyatt International, Júlio Gavinho, affirms that the group is interested in expanding their investments throughout Brazil. “Our interest and disposition to invest in the Country is definitive and not opportunistic, because of the 2014 World Cup and 2016 Olympic Games. We have been here for almost 10 years and we want to increase our participation and distribution in Brazil”.

Business Round

Parallel to the event, a business round will take place in which various Brazilian professionals will have an opportunity to meet with international investors interested in investing in the Brazilian real estate and tourism market, over a 30 minute meeting.

The event will offer various panels discussing issues such as funding among the topics to be covered are the following:

  • Brazil’s potential for real estate and tourism
  • Changes in the Environmental Legislation
  • International investment expectations for Brazil and how to benefit from them
  • International hotel groups’ plans for Brazil
  • How to attract resources from investment funds?

ADIT Brasil attracts foreign direct investment in land and real estate projects by introducing the most reputable Brazilian developers, architects, lawyers and related businesses to international investors including hoteliers and resort groups and encouraging the formation of working partnerships.

For president of ADIT Brasil, Felipe Cavalcante,  companies in the region will have an opportunity to get to know what is new in the national and international real estate market, and get familiar with the best investment opportunities in the sector. “Aside from informational, this event will be educational as well. How to do business with investors, how to attract investment to the region and how to acquire resources from investment funds are just a few of the topics promised to be discussed at the International Meeting.”

For further information please contact: Kerry or
Antonia at kerry@tidewaycommunications.com
antonia(@) tidewaycommunications.com.
0208 878 0787

This week sees the return of EPEX, The Exclusive Property Exhibition to Earls Court on Saturday 10th and Sunday the 11th of July.

EPEX is  aimed especially at luxury high end property from locations world wide.  The Exclusive property exhibition concentrates in particular on on luxury property priced from £500,000 to £25,000,000 . EPEX exhibitors are luxury property developers, real estate agents and organisations providing associated services.

Of course this is only one way for luxury property developers to raise their profile and to meet with potential buyers. There are now many channels of communication that sellers can interact with and Tideway Communications is leading the way in finding the right marketing channels for your product.


Tideway Communications is a specialist agency in public relations, marketing and event management services. We work with clients in the luxury homes and overseas property markets, property resorts and hotels.


Kerry Nicholas founder of Tideway Comms has over 20 years of experience in marketing and Public Relations. Back in 1995 Tideway began acquiring residential property clients including Vila Sol 5* Spa & Golf Resort in Vilamoura in the Algarve, Sapcote and Chesterton.  Tideway Comms is among the first UK PR consultancies to acquire overseas residential property well before the second homes market began to gather pace in 1997.

Tideway works on raising exposure leading ultimately to sales of luxury properties overseas. Tideway has worked on a media campaign to promote the high end  Tides Sugar Beach resort in St Lucia, a unique resort located in St Lucia’s Val Des Pitons, one of the most beautiful locations in the world, offering a range of luxury end properties. The resort has gained coverage in almost all UK national press and has recently confirmed sales of over $14.5m in the first six months of 2010.

Brazil’s government wants to tighten restrictions on foreign ownership of farm lands in Latin America’s biggest country, the Agrarian Development Ministry indicated on Tuesday.

VII Feira Nacional da Agricultura Familiar e Reforma Agraria - Brasil Rural Contemporaneo. Ministerio do Desenvolvimento Agrario. Concha Acustica, Brasilia, 2010 ©Foto de Ubirajara Machado

Ministry spokeswoman Denise Mantovani confirmed published remarks by Denise Mantovani who said that the government does not want foreigners to buy agricultural land in Brazil.

“We do not need foreigners to produce food in Brazil,” Cassel told the business newspaper Valor Economico. “This is the policy of President Luiz Inacio Lula da Silva.”

“Because of food security, Brazilian lands must remain in Brazilian hands,” the minister said.

According to the Agrian Development Minister, the Brazilian government intends to tighten land restrictions on foreign ownership of farm lands in Latin America’s biggest country. Denise Mantovani, the Ministry’s spokeswoman, confirmed the published statements by the Minister, outlining the decision to restrict foreigners from buying agricultural land in the country.

Mantovani said that 10 million acres (4 million hectares) of land had been registered by foreigners as of 2008 and that between 2002 and 2008, foreigners invested $2.43 billion to purchase land.

According to Valor Economico, the decision to put a lid on foreign ownership of land is due to rising world demand for food, water and natural resources.

Mantovani said that current law says large rural properties can only be purchased by Brazilian citizens or residents.

“But foreigners often bypass that rule by setting up companies in Brazil, which are controlled abroad, to purchase land. This is a foreign company and this is what we want to control.”

“I am not a xenophobe but our land is finite. The population grows and demands food,” the minister said.

Mantovani said that representatives from several ministries were preparing a constitutional amendment to further restrict foreign ownership of land.

She said the amendment being drawn up “could include the revoking of land titles already purchased by foreigners.” She did not provide details.

Most foreigners purchase land to raise cattle and grow soybeans and other crops in the states of Mato Grosso, Mato Grosso do Sul, Sao Paulo, Bahia and Minas Gerais.

We are going to draw up an amendment that will make it clear that foreigners can invest in any field, except land.” the minister said.

It is unclear when the amendment will be debated in Congress.

So how would this new law affect potential investors looking to purchase land in Brazil?  Currently this is a proposed amendment and not law. However if the amendment is passed and becomes law then it would mean that agricultural land would not be able to be bought by foreigners or by foreign companies.

Could this in turn have an impact on those who have already invested in Brazilian real estate? Under the regulations currently being formulated, foreign investors already owning land in Brazil or with large rural properties and have set up Brazilian companies are at risk of having their title deeds annulled if the tough measures are enforced, the government reiterated.

Brazilian government officials reiterated the country’s official policy over foreign land ownership, saying that foreigners should not be allowed to buy or own agricultural land. But we are talking exclusively about agricultural land. Land for real estate development is not designated agricultural land.  There is a clear zoning system throughout Brazil.

Felipe Cavalcante, Presidente of ADIT says: “The suggested measure only affects agricultural land and in Brazil there is a clear zoning between that and land for real estate. The toughening on foreigners owning land for cultivation purposes is just a suggested proposal at this stage and as before there are still a lot of members of the Government who express their opposition to this measure.

At ADIT Brasil we aim at attracting foreign investment in earmarked urban land by ensuring careful development in permitted areas and with consideration for the long term  future of our country according to the laws that are in effect.”

Success in St.Lucia

June 25, 2010

Cardea Property Consultants, sales and marketing agents for Sugar Beach villas in St Lucia, have sold luxury villas totalling $14.5 million in their first six months of operation.  Since the all-female agency set up in December 2009, four private residences and three freehold rental pool villas have been sold.


Lisa Basire, marketing director, puts Cardea’s success down to several factors.  She says: “Sugar Beach is being sold on a freehold basis, which is extremely unusual in St Lucia as beachfront land is leasehold.  We have been able to sell new-build rental pool villas, which form the accommodation for the resort because the existing hotel – the Jalousie Plantation – has 20 years of trading history.

That’s why Sugar Beach is able to offer owners an exact 37.5% of the pooled room revenue rather than paying a split of the profit because they know what the running costs are and they know the occupancy levels.  For added confidence, purchasers of these fully furnished rental pool villas enjoy a minimum 5% rental guarantee from handover and for the first 12 months after the hotel (Jalousie Plantation) re-opens as The Tides Sugar Beach in 2011.”

Owners are entitled to use their villa for four weeks each year. For a one bedroom villa this is the equivalent to a saving of around US$23,100 each year.

Lisa continues: “We are finding, however, that the three bed – roomed private residences are the most popular purchases.  I think the reason for this might be that the type of purchaser coming in at this level is more focused on retaining privacy and anonymity.”

“Another positive of Sugar Beach in this difficult world market, is that the developer is not reliant on bank finance to complete the $100 million development, giving investors’ peace of mind that the resort will be re-developed as planned.”

Most investors at the Sugar Beach resort are primarily from Britain making up 56% of the total purchases, followed by Europeans and Americans together making up for 30% of the sales.  Buyers of the Private Residences get all the benefits of the ongoing US$100 million redevelopment of the former Jalousie Plantation resort which will redefine the concept of luxury when complete and re-launched as the Tides Sugar Beach Resort in 2011.

When interviewed by Globaledge back in October 2008 at the beginning of the economic crisis, Kerry Nicholas,  gave some spot on advice about what would be the next millionaires’ real estate investment destinations. Among these predictions were Brazil, Morocco and Poland.

Kerry is MD at Tideway Communications and has worked in the property industry since the days of the 1987 stock market crash

Brazil:

Brazil is the world’s tenth largest economy and forecast to be the fifth by 2020. Brazil’s GDP fell only 0.2% in the worldwide slump of 2009, on 10th May 2010  in a weekly survey the Brazilian Central Bank, came up with a median forecast for 2010 growth of 6.26%. Brazil is one among few countries that welcomes a strong influx of foreign investors for the real estate sector. Brazil currently enjoys  a £140 billion cushion in foreign exchange reserves. Foreign investors’ new aims for Brazil are directed towards its domestic real estate potential, taking into account the country’s middle class growth and the 7.8 million housing shortage. The economy has also a very healthy banking system and a very healthy private non financial sector making it easier for Brazil to avoid the impact of the global crisis.

Morocco:

The Moroccan economy achieved, during the 4th quarter of 2009, a growth rate of 7.8%, compared to 3.1% during the same period of 2008, the state’s statistics office Haut Commissariat au Plan (HCP) said. Morocco’s government says that its reforms over the past decade enabled it to better address the impact of the global slump on the country’s economy. It says that the Kingdom would maintain annual economic growth averaging five percent until 2012.

Poland :

For most of the world, 2009 was a year best forgotten, but in Poland it was a year of enormous success, leaving the country the only member of the European Union not to fall into a recession during the global economic crisis. http://www.globalpost.com/dispatch/poland/100104/poland-economy-economic-growth

Tideway Communications UK’s longest-established overseas property public relations specialist  has been providing bespoke marketing and media relations services exclusively to overseas residential property clients since 1995. Tideway prides itself on its superb relationships with the most influential journalists across the online and traditional heavyweight media.

Sunshine states

June 14, 2010

ADIT’s fourth Nordeste Invest expo attracted a record number of global developers and agents seeking out opportunities to partner with Brazil’s large and small-size developers.


Bernadette Costello reports from the event in Pontanegra, Natal in the state of Rio Grande do Norte.


The north east of Brazil was dubbed an investment “sweet spot” by foreign visitors and Brazilian developers who formed partnerships at Nordeste Invest last month.


From May 10-12, the states of Rio Grande do Norde, Bahia and Céara became hot property, with a focus on residential projects, hotels,shopping centres, social housing and Brazilian infrastructure. The expo was organised by ADIT,which has promoted investment in real estate in the north east for the past four years.

It is helped by APEX, the Brazil government’s investment promotion agency, and the Ministry of Tourism. ADIT predicts that up to R$1.8bn foreign investment will now flow into the north east as a result of its Nordeste Invest event in the coastal town of Pontanegra – 30 minutes from Natal airport in the state of Rio Grande do Norte.

Global asset managers, agents,developers and the world’s media were both curious and rigorous with their questions during three days of business rounds, site visits, panel debates and speed-networking events…

Agents were assured that the north east would be ready for the 2014 World Cup with stadiums, Natal s new airport and more hotel rooms. Talk centred on how ready the infrastructure and stadiums will be in the north east for Brazil’s World Cup in 2014. Other investors focused on the lack of major hotel brands but learned many are set to invest heavily in the north east states of Rio Grande do Norte, Bahia and Céara.

In fact, around 30m new hotel rooms will populate both city and coastal towns over the next decade. This includes Pontanegra which only saw its first tall hotels spring up on its beach less than five years ago.

Hotel brands on their way include Hilton, Ritz Carlton, Accor and Ibis, which will launch 55 new hotels in Brazil in time for the World Cup. But UK investors, such as Dominic Seely, co-founder of asset management firm Townhouse Capital, said holiday resorts eeded to offer more, such as water parks, golf and family entertainment.

And not all of this foreign Direct investment is focused on the burgeoning tourism industry, which is set to surge when Latin America’s largest airport open in Natal in 2011.

The building of first homes for the domestic population is seen as equally important, with 3m new social housing homes to be built across Brazil by 2030. This is the backbone of Brazilian president Luiz Inácio Lula da Silva’s policy to get people off the streets and into their own home. The “Minha Vida, Minha Casa” or “My Life, My Home” initiative is for low-income Brazilians, with each household eligible for a government subsidy of up to R$17,000 topped up with a mortgage from the Caixa Economica Federal. The bank is financing the entire Minha Vida, Minha Casa project and it’s hoped finance rates will aslo fall to 7.5% over the coming years.

Lula – as Brazilians affectionately refer to their Workers’ Party president – has also put increased standards in education and more workers’ rights at the forefront of government actions.To achieve the goal of building more than 1.5m social housing a year, plus extensive plans for holiday resorts, airports, and R$100bn of rail and road infrastructure, there is a demand for quality labour, says ADIT president Felipe Cavalcante.

Silvio Bezzera, founder of developer SindusCon and vice president of ADIT,added that the north east is tackling this issue head on. “The civil construction sector and local governments are reacting with new labour training schools – R$3m has already been put towards qualifying 15,000 people to finish projects that were started a year ago,” he said.


The transparency of Brazil’s property professionals, who were open about the drawbacks to investors, and then showed what the country is doing toimprove its problems, was evident at Nordeste Invest. This includes the lack of basic infrastructure in smaller suburbs of major cities – including roads, transport links, sewage and water quality. But to some investors this is an opportunity to help Brazil’s developers improve and prepare for the north east’s explosion in real estate.