Economic fundamentals like credit availability, increased foreign direct investments, higher purchasing power, lack of housing and a rising GDP are among the many reasons boosting Brazil’s real estate market. Northeast Brazil’s GDP in particular is growing at a faster rate than that of the rest of Brazil; cities that are experiencing some remarkable growth include Recife, Salvador and Fortaleza.

These are just some of the subjects covered by Luiz Lessa, Chief Investment Officer at ADIT’s Investment Agency in an informative webinar broadcast on 15th September about Brazil’s real estate and hospitality investment market.

He expanded on the factors which bring Brazil to investors’ attention:  At the moment there is a 10 million unit deficit on affordable housing in Brazil which is now becoming a more pressing issue due to the fact that there is now mortgage financing available from the middle class.  “Minha Casa Minha Vida” the federal social housing programme for the low income families has also brought significant results in tackling the housing problem putting in US$35bln of investments and US$20bln in subsidies. Minha Casa Minha Vida is predicted to create 2million houses between 2011 and 2014.

In view of the major sporting events of the World Cup in 2014 and the Olympics in 2016 there are major plans put in place for the improvement of the country’s infrastructure with US$ 400 billion put in place by 2011.

In the Hospitality sector there is a need of 162,500 new rooms for the World Cup. Luiz Lessa points out that most of the tourism supply in Brazil has been so far offered by family businesses. However the number of hotels affiliated with hotel brands, is growing, , international hotel chains including Accor, Starwood Hotels and Hilton Hotels confirming their plans of expansion in the country.

ADIT Brasil has recently announced that it will be broadening its fields of activity to also include commercial -based investments. According to Luiz Lessa there is an increased international investor interest for shopping centre investments, offering attractive yields of 10-12% for acquisitions and 14-16% for developments. Nearly $5 billion has been committed by foreign investors to Brazilian real estate ventures over the past two years and there are at least 10 new real estate funds currently raising equity.

During the webinar Luiz Lessa stressed the importance of finding a local partner whatever the nature of the investment.  The Investment Agency is a business unit focused on organizing partnerships between Brazilian executives and foreign investors. The Investment Agency offers informative analysis on available investment projects in the country and conducts necessary negotiations – leading into deals.

Senior members of ADIT including Luiz Lessa will be coming over in London from 10-17 October for a week of business meetings and will be hosting a series of seminars and workshops.


For further information about ADIT’s scheduled visit in London, please contact ADIT’s representative in the UK, Tideway Communications on+ 44(0)20 8878 0787  (kerry@tidewaycommunications.com) or ADIT’s head office in Maceio, Alagoas  on +55 82 3327 3465 gepro@aditnordeste.org.br

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ADIT Brasil, the investors’ gateway to real estate and tourism development in Brazil, has created an Investment Agency focused on presenting real estate projects correctly to overcome the obstacles of doing business between Brazil and the rest of the world.

Luiz Lessa, CIO of ADIT’s Investment Agency says: “Brazilian business owners – especially small and medium-size – have not yet mastered the “language” of the international financial markets.  Sometimes communication is a barrier and sometimes the projects they present lack an adequate format or the basic necessary information for investors to make a decision.

The “ADIT Investment Agency” has been created to make projects viable for the international investor.  It aims to prospect the best available investment opportunities on the national scene Brazilian companies can use ADIT’s network and extensive experience of the market and its complexities to prepare their projects in a form acceptable to attract foreign capital.”

Members, Associates and non-members of ADIT are eligible to apply for the Investment Agency treatment. The IA examines each application and if chosen those project proposals will be analyzed using technical and market criteria such as return rates, viable usage and legal issues.  The IA then creates a structure that not only prepares all the necessary information, but also conducts negotiations and leads them to deals.

There are already four projects in the IA portfolio

  • an urban hotels project in Recife, Pernambuco,
  • Social housing in Rio de Janeiro
  • A master plan community in Natal, Rio Grande de Norte
  • Second home condominiums in Ceará

The aim is to unveil them to a select audience of potential investors through road shows in London, Spain and the USA during October and November 2010.  The intention of ADIT is to spread its service further into Europe, North America, middle-east and the Arab investment market.

ADIT Brasil is now a national Association covering the whole of Brazil and not just the Northeast region.  ADIT’s main office is in Macéio in the state of Alagoas but it has located its Investment Agency headquarters in Sao Paulo.   Luiz Lessa, CIO says: “Sao Paulo is the first port of call for the national and international institutional investment markets. Most businesses are directly or indirectly linked to Sao Paulo on a day-to-day basis.”

For further information about ADIT, photos, members directory and case studies, please contact ADIT’s representative in the UK, Tideway Communications on+ 44( 0)20 8878 0787 kerry@tidewaycommunications.com

or ADIT’s head office in Maceio, Alagoas  on +55 82 3327 3465 gepro@aditnordeste.org.br

ADIT Brasil covers all states in Brazil:

Acre – Rio Branco, Alagoas – Maceió, Amapá – Macapá, Amazonas – Manaus, Bahia – Salvador, Ceará – Fortaleza, Distrito Federal – Brasília, Espírito Santo – Vitória, Goiás – Goiânia, Maranhão – São Luís, Mato Grosso – Cuiabá, Mato Grosso do Sul – Campo Grande, Minas Gerais – Belo Horizonte ,Pará – Belém, Paraíba – João Pessoa, Paraná – Curitiba, Pernambuco – Recife, Piauí – Teresina, Rio de Janeiro – Rio de Janeiro, Rio Grande do Norte – Natal, Rio Grande do Sul – Porto Alegre, Rondônia – Porto Velho, Roraima – Boa Vista, Santa Catarina – Florianópolis, São Paulo – São Paulo, Sergipe – Aracaju, Tocantins – Palmas

ADIT, the Association for inward investment in real estate and tourism, has announced that it is widening its influence to cover the 27 states of the whole of Brazil and not just the nine states of the Northeast region.  Its name has been changed from ADIT Nordeste to ADIT Brasil.

ADIT Brasil will also broaden its fields of activity to include residential and commercial property-based investments, hospitality, real estate tourism and logistics. It will also strengthen its presence in the environmental sector, with the aim of creating legal security to advance real estate and tourism developments across the country.

The announcement has been made exactly four years after the Government-funded Association was founded. It was formed in June 2006 in order to drive forward the Northeast’s tourism and real estate development. Before then, there was no official body representing the interests of these sectors.

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.

The association holds an annual conference – exhibition and business networking event called Brasil Invest (formerly known as Nordeste Invest). The event has become a milestone in the industry; in its fifth conference in May 2010 in Natal it attracted more international investors than ever before.  120 foreign investors attended and met with Brazilian companies in the real estate and tourism sectors, with parties agreeing an anticipated R$ 1.8 billion of business

The 27 regions of Brazil listed alphabetically with their capital cities:

REGION CAPITAL
Acre Rio Branco
Alagoas Maceió
Amapá Macapá
Amazonas Manaus
Bahia Salvador
Ceará Fortaleza
Distrito Federal Brasília
Espírito Santo Vitória
Goiás Goiânia,
Maranhão São Luís
Mato Grosso Cuiabá
Mato Grosso do Sul Campo Grande
Minas Gerais Belo Horizonte
Pará Belém
Paraíba João Pessoa
Paraná Curitiba
Pernambuco Recife
Piauí Teresina
Rio de Janeiro Rio de Janeiro
Rio Grande do Norte Natal
Rio Grande do Sul Porto Alegre
Rondônia Porto Velho
Roraima Boa Vista
Santa Catarina Florianópolis
São Paulo São Paulo
Sergipe Aracaju
Tocantins Palmas

For further information about ADIT, photos, members directory and case studies, please contact ADIT’s representative in the UK, Tideway Communications on+ 44( 0)20 8878 0787 (kerry@tidewaycommunications.com) or ADIT’s head office in Maceio, Alagoas  on +55 82 3327 3465 gepro@aditnordeste.org.br

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

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

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.

President of ADIT – Mr Felipe Cavalcante announces at Nortdeste Invest 2010 that ADIT is to become a national association, representing the whole of Brazil and not just the nine states that make up the Nordeste Area.

He says: ” ‘ADIT Brasil’ will be active in attracting property-based investments throughout the national territory including residential, commercial, hospitality, real estate tourism and logistics.  It will also strengthen its presences in the environmental sector, with the purpose of creating legal security to advance real estate and tourism developments across the country.”