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Jones Lang: expect ‘double digit’ growth in Brazil

The country’s recent investment-grade status and robust domestic demand for residential and office properties are continuing to fuel development in Brazil’s real estate market.

The Brazilian property market is expected to grow in the “double digits” over the next three years, according to Ricardo Mader, executive vice president for Jones Lang LaSalle Hotels in São Paulo.

Mader made his comments in an in-depth feature on the Brazilian real estate market appearing in the September issue of PERE magazine.

He added that private equity real estate firms will likely focus on development, owing to the difficulty of sourcing available commercial assets. Much of the prime properties were bought in the last 18 to 24 months, Mader said.

Brazil’s residential market is also driving construction, owing to the increasing availability of mortgage financing in recent years. Last year, the residential market in São Paulo sold almost 37,000 units – a 54 percent increase over 2005 – according to Roberto Perroni, head of Brazil for McLean, Virginia-based JER Partners. 

A number of major real estate investors have moved into the Brazilian market recently, including JER, which opened a Brazil office earlier this year, and New York-based Och-Ziff Capital Management, which partnered this month with Votorantim Financas, the finance arm of Brazil’s largest industrial group.