Great First Quarter for Brazil Property Investment

Recent quarterly and annual results published by two of the largest real estate companies in Brazil confirm that the property boom is well underway. And north east Brazil is earmarked as an expanding area for property investment. Rossi Residencial has just released its results for the first quarter of this year. The figures, which make happy reading for Rossi shareholders, indicate that the property market in Brazil is set for a record year.

From January to March, Rossi recorded a year-on-year increase in business of 146%. The number of developments in Brazil launched by Rossi during Q1 was 359% higher than Q1 2009 with sales reaching over R$722.4 million.

Mainly based in Rio de Janeiro and São Paulo, Rossi is moving its focus to other areas of Brazil this year, including Rio Grande do Norte in the north east region. Here, Rossi will be launching five developments before the end of the year. The first, almost 300 apartments in Natal and priced for the middle and upper-middle classes, will go on the market at the end of May.

Commenting on the Brazil property market, Rossi's manager for north east Brazil, Fernando Motta said that Q1 2010 figures were proof that Brazil has put the international financial crisis well behind it and that "now is an excellent time for the property industry in Brazil". Motta believes that a driving force behind Brazil real estate is the government social housing programme, Minha Casa Minha Vida. Around half of Rossi's developments this year form part of this scheme.

Cyrela, the largest real estate company in Brazil, released its annual results at the end of March. Like Rossi's, Cyrela's figures were also cause for celebration. Net profits in 2009 grew by 162% to R$729 million. The number of units launched increased by over 30% and sales saw similar growth. Company analysis of the results said that they "reinforce our optimism in the Brazil property market" and prove that consumer confidence is back and that demand is strong.

Also like Rossi, Cyrela is a specialist in low-cost property in Brazil. Living, the company's low-cost housing division, accounted for almost a third of new launches in 2009. Of these 16,062 units, a massive 64% were part of the Minha Casa Minha Vida programme. Cyrela expects this tendency to continue during 2010 and beyond.

Brazil currently publishes no official property statistics, but for Obelisk, these figures from two of the biggest players in Brazil real estate confirm that the property market is taking off. And they reaffirm the huge potential behind investment in property in Brazil. We also believe they highlight the importance behind the government social housing programme. Not for nothing are we focusing our investment opportunities on Minha Casa Minha Vida because we can see its huge investment potential and its ability to drive property in Brazil forward.

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