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Focus on Brazil | 23
so that satisfactory completion of your property Further north, investors will
can be relied upon. find more opportunities in the
Foreign Direct Investment
less developed and beautiful
40,000
Which Type Of Property Should regions of Rio Grande do Norte
You Go For?
35,000
and Ceara. With rainforest
30,000
In urban areas, the best option is probably to sweeping down to some of the
25,000
invest in a serviced apartment in a reputable and finest beaches in the world, the
20,000
secure suburb. In major cities such as Sao Paulo, north combines a fresh, unex- $bn
15,000
the highest returns can generally be made on plored feel with properties
smaller apartments which are in constant designed to a luxury standard.
10,000
demand from the young professional popula- Confidence in this area is suffi-
5,000
tion. Those wanting to invest inland might like ciently high for some agents to
0,000
to consider building a pousada, or guest house, offer guaranteed returns of up to
2003 2004 2005 2006 2007
in a small village in one of the chapadas (valleys) 5%. According to
which can also be profitable. www.uv10.com at least 80,000
Source: Deutsche Bank
The vast majority of Brazilians live within houses and apartments will have
300km of the coast and it is here that an increas- to be built in the northeast if existing demand is ularity. Currently devoid of sophisticated luxury
ing number of luxury resort developments are to be met. Supportive infrastructure is under resort developments, investment in high end
appearing. Properties with good access to the development especially in Rio Grande do Norte property is likely to be lucrative. The nearby
beach, nearby cities and an international airport, where investment of around R$400 million in opening of a David Beckham soccer academy in
as well as a range of on-site facilities will always hotel construction is scheduled over the next Cabo Sao Roque should also increase Natal’s
be popular with tourists and thanks to the coun- four years. global profile.
try’s tropical climate, should secure relatively The city of Natal offers exceptional food, Aside from Rio Grande do Norte, other states
high occupancy figures for most of the year. scenery and entertainment at a fraction of the which are proving popular in the north include
As in any market, ensure that the chosen proper- cost of its more southerly competitors. Boasting Ceará which is just 6 hours from Europe, func-
ty stands out from others in terms of quality and the lowest crime rate and one of the highest tions as a major tourist hub and has already
amenities. quality of life rankings in the country, it is reported significant returns on property. Ocean
becoming a firm favourite amongst tourists fronting plots can be bought for £12,000 whilst
Hotspots especially Europeans, who only have to fly 7 apartments with sea views sell for £23,096.
As the largest and most famous cities in Brazil, hours to reach its sandy shores. With an average Other areas worthy of consideration are
Rio de Janeiro and São Paolo are the safest temperature of 30°C and 360 days of sunshine a Pernambuco; Alagoas; Sergipe; Paraíba; and
opportunities for investment, although prices are year and some 400km of truly spectacular Piauí whose interlinking infrastructure has
likely to be high in the desirable areas and per- beaches it is not hard to understand Natal’s pop- recently undergone improvements.
centage returns will diminish proportionately.
The two cities have a relationship similar to New Buyer’s Guide wits about him. Verification of all rental agree-
York and Los Angeles – Sao Paolo is the centre of Non-residents are given the same rights as for- ments as well as employing reputable agents
government and finance in the country, and is eign nationals when buying property in Brazil will avoid the shortfalls which can beset the
therefore likely to be popular with those looking although special conditions apply for those more naïve investor. Trading practices also dif-
for commercial and office properties or accom- wanting to buy near the coast, frontiers and fer considerably from those in the UK and
modation to serve the prolific professional popu- certain areas designated as national security. occasionally unusual pricing structures will be
lation, whilst Rio, the cidade maravilhosa Rural areas can be acquired by non-residents enforced. Prior research into all aspects of the
(beautiful city), has a reputation for carnival and according to specific law denominations. contract should safeguard against nasty sur-
the arts. Sandwiched between mountains and the Under Brazilian law, right of possession and prises.
sea, Rio has 45 miles of white-sand seafront, right of ownership are both sanctioned. Brazil’s somewhat turbulent price history
including the famous Copacabana and Ipanema may discourage some investors as well as its
beaches, and is therefore likely to be popular Mortgages lack of available finance. However, those able to
with those wanting to take advantage of high Finance is not yet available in Brazil. see past these risks will realise that this coun-
tourist numbers and the city’s reputation as one try’s strong potential does help to allay such
of the great romantic destinations. Key Risks fears.
Sao Paulo is the largest and richest city in There are a few risk factors associated with
Brazil with a modern infrastructure, educated buying in Brazil, as there are with pretty much Key Opportunities
workforce and one of the highest qualities of life every country. Because of its emerging market On a more positive note, rising tourism,
in the country. Its real estate market is unique in status, dubious ‘due diligence’ and heavily- encouraging economic growth and vast infra-
that it is fuelled solely by local demand. Brazilian inflated prices have led to one or two horror structure improvements throughout the coun-
buyers in this booming city are generating high stories in the past. Although comparing prop- try all point towards Brazil’s very bright future.
growth and even higher yields in the region of 9- erties agent by agent is laborious, it does reveal Low entry costs are resulting in very high gains
14% gross for functional serviced properties. discrepancies in pricing, which can differ by up and extremely palatable investment opportuni-
Occupancy levels are extraordinarily high with to 25%. Rigorous analysis also uncovers the ties. As the country powers towards its predict-
minimal void periods making this an excellent small print behind lofty promises of 15% guar- ed economic prowess in the years to come,
investment choice. Luxury one bed apartments anteed rentals etc. As they say in Brazil, investors shrewd enough to have invested today
in desirable Campo Belo are available from Brazilians sabe jogar (know how to play) and will be able to sit back and enjoy their spi-
£78,500 whilst one bed apartments close to the any investor must make sure that he has his ralling returns.
city centre are available from £37,500.
www.investmentinternational.com November 2009 Investment International
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