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

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.”

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

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