After investing in a number of national platforms in Brazil, Equity International is acquiring an equity interest in a regional Brazilian homebuilder.
The Chicago-based real estate investment firm, which targets fledgling companies in emerging markets, has acquired an equity interest in Grupo Thá, a Curitiba, Brazil-based homebuilder. Although representatives from Equity International would not disclose the financial commitment, based on historical data, the firm’s target for similar investments has been roughly $75 million.
Founded in 1895, Grupo Thá is a fourth-generation, family-run homebuilder focusing on the development of middle and upper-middle income residential projects across southern Brazil, particularly in the Paraná and Santa Catarina states. In addition, the company has two other operating units: a national construction services platform that builds residential and commercial properties across Brazil, primarily for third parties, and a residential real estate brokerage that provides marketing and sales services for the company and third parties. In total, Grupo Thá has built and developed more than 2,000 projects comprising more than 64 million square feet across a wide range of property types, including residential, commercial, hospitality, retail, industrial, education and health care.
“The first wave of our investment in the Brazilian homebuilding sector focused on creating large national platforms, which typically were based in Sao Paulo,” Vijay Jayaraman, Equity International’s senior vice president of investments, told PERE. “That helped us realise that there were companies in these secondary markets that are well positioned with regard to market share, local expertise and reputation but lack the capital to expand. We found that in Grupo Thá.”
Equity International expects the current Brazilian housing deficit of approximately 6 million units, combined with a growing consumer class, to fuel an increase in demand for housing for the foreseeable future. In particular, the firm finds a particular appeal for the southern region of the country due to its strong industrial sector and broader economic base, which includes a highly-educated population with high levels of disposable income. In addition, Grupo Thá has a well-located land bank in key cities across southern Brazil that, along with its integrated real estate platform, should allow it to capitalise on homebuilding opportunities throughout the region.
“We are excited to begin the next chapter of homebuilding investment in Brazil,” said Gary Garrabrant, chief executive officer of Equity International, in a statement. “The Thá family has built a singular brand and reputation in southern Brazil, and we are thrilled to join Grupo Thá as a significant shareholder.”
Added Sandro Westphal, chief executive of Grupo Thá: “We are honored to have Equity International as a strategic partner in Grupo Thá. It is recognized as a global investor with extensive experience in the homebuilding sector throughout Latin America, making them an ideal partner to help us grow and institutionalise our company.” Grupo Thá is led by Westphal and Arsenio de Almeida Neto, chief operating officer.