Background isn’t always repeated, but when considering real estate investing, many bet on Mike Zell’s past history. In the 1990’s, he gained the nickname “grave dancer” by buying and profiting upon distressed properties. And, worldwide, troubled properties are definitely in the news right now. So , real estate investors everywhere focus on what Sam Zell says, such as in a recent CNN interview: “Brazil is the number one country in the world intended for investments. ”
There is a lot happening in Brazil, whether it be government or private sector housing investment plus construction. The government’s $18 billion dollars stimulus plan for building affordable casing is keeping a great many home builders busy. Couple that with a 5 percent cut in Brazil’s Selic interest rate, and you have a pretty positive climate for real estate. Real estate financing is where Sam Zell says the country needs to location its emphasis. His privately-held company, Equity International, has taken an interest, having a large stake in home builder Gafisa SA. According to an article in the Wall Street Journal Online, half of Equity International’s invested capital and 70% from the investments’ market value is in Brazil.
One particular source reports that the Banco Main do Brazil places Brazil’s residential mortgage lending at only 2 . 5% of the GDP. This is quite reduced compared to estimates of 11% in Mexico, 20% in Chile, plus 45% in Spain. Worldwide financial crisis apart, mortgage lending in Brazil is rising, some reports putting this at 41% this year, and companies like Equity International are relocating to invest and profit from the development in Brazil’s economy and particularly the residential housing initiatives and building. Of course , building homes spurs buys of durable goods; refrigerators plus appliances. The supermarket giant, Grupo Po de Acar purchased Ponto Frio, an appliance manufacturer to cash in on this boom in appliance sales.
Let’s not leave out opportunities within commercial real estate in Brazil. Singapore recently entered the commercial property arena via a joint venture with Cyrela Commercial Properties. Add to this investment in the Canada Pension Plan Investment Board’s real estate subsidiary for this joint venture to purchase office buildings, shopping centers, and distribution centers. Analysts from five banking institutions and brokerages recently reported in order to Reuters that Cyrela, Gafisa SA, and Rossi Residencial all published operational profits gains in 08.
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Taking all of this into account, many analysts predict that Brazil will arise first and fast with growth after global financial markets stabilize.