Starwood Capital Group will target investments in Brazilian real estate companies and platforms as it looks to expand its operations in the country.
Just two months after opening an office in São Paulo, the Greenwich, Connecticut-based firm said it would work with local partners to source project-level deals but that “in a lot of cases [investments] might be made in platforms” as well.
Speaking at the ADIT Brazil real estate investment seminar in New York today, Starwood’s head of acquisitions in Brazil, Ryan Hawley, said the firm would run a “lean ship” in the country, working closely with local operating partners to source deals.
There will be some project-level investments and in a lot of cases it might be more platforms. Starwood Capital Group, head of acquisitions in Brazil, Ryan Hawley
There will be some project-level investments and in a lot of cases it might be more platforms.
Starwood Capital Group, head of acquisitions in Brazil, Ryan Hawley
“We will try to find really good partners to work with,” he said. “There will be some project-level investments and in a lot of cases it might be more platforms.”
As investor appetite grows for Brazilian real estate, and the country prepares to host the World Cup and Olympics in 2014 and 2016, respectively, the ADIT conference also heard concerns that the cost of land, materials and labour were starting to soar, not least thanks to growing domestic demand for residential.
“To find a good piece of land at attractive location that is not being bid up [by] residential [investors] is extremely difficult,” said Clay Dickinson, executive vice president of Jones Lang LaSalle Hotels.
He was joined by Hawley, who said despite Brazil’s growth story investors should still be “cautious”.
“There’s no doubt in my mind that the cycles in Brazil have been moderated and I think the trajectory is sloping more aggressively up than it has in the past,” Hawley said. “But there are going to be those cycles and there’s no doubt it’s going to catch some people by surprise when Brazil goes from having 7 percent GDP growth a year to say 3 percent or 4 percent.”