US REIT's in Brazil

Península de Maraú- Sunset on Cassange Lake + canoe (photo, Alex Uchoa)

Tiresome. The unending media torrent on the exploding Brazilian real estate market. This one claims China and India are 'over'- leaving "R" (Russia) and "B" (Brazil) of the giant killing BRIC's.

Lots of reasons: Underlying strength in the economy, huge trade balance, healthy balance of payments, low inflation, strong currency and expanding liquidity and plummeting interest rates. So, how long can the Brazilian Boom last? Easy. Until the Next Big Thing (NBT). Which is, BTW?

The NY Post's take >>>

UA OGLING COMMERCIAL REAL ESTATE

http://www.nypost.com/seven/01062008/business/hot_brazilian_nabes_722413.htm

> Brazil's currency soared 20 percent in 2007, the fifth straight annual advance and the biggest since a 22 percent rally in 2003. The real gained the most against the dollar last year among the 16 most actively traded currencies. <

> With new commercial developments in the US reaping returns of just 3 percent to 8 percent, and with the weak dollar making Europe prohibitively expensive, the red-hot Brazilian economy attracted $3 billion in US investment cash last year - more than 20 times the amount invested there in 2006, said Fabio Maceira, head of Jones Lang LaSalle Brazil.<


HOT BRAZILIAN NABES
US OGLING COMMERCIAL REAL ESTATE
By CARA TABACHNICK

January 6, 2008 -- Forget about the girls from Ipanema, US commercial real estate kingpins are now ogling and waving fistfuls of dollars at Brazil's newest hot commodity: its underdeveloped retail sector.
With new commercial developments in the US reaping returns of just 3 percent to 8 percent, and with the weak dollar making Europe prohibitively expensive, the red-hot Brazilian economy attracted $3 billion in US investment cash last year - more than 20 times the amount invested there in 2006, said Fabio Maceira, head of Jones Lang LaSalle Brazil.
Returns on new commercial development in Brazil are running as high as 25 percent. And consider this about South America's largest economy:

* Its Bovespa stock market was up nearly 44 percent last year.
* There are only 350 shopping centers to serve Brazil's 180 million population - compared to the 49,000 shopping centers in the US to serve our 303.2 million folks.
* The Brazil economy is now the ninth-largest in the world.
"People already looked at India and China and are now looking for the next place," said Gary Limjuco, director of equity investments for Time Equities Inc., who has been tracking Brazil real estate investments over the past year.
With its explosive growth, Brazil is attracting investment cash from some of the biggest names in real estate. For example:

* Toronto-based Brookfield Asset Management purchased five upscale shopping malls in Sao Paulo and Rio de Janeiro for $965 million.
* New York developers Tishman Speyer sunk $500 million into office buildings, and Texas-based Hines Interests LP real estate firm recently purchased the BankBoston building, a Sao Paulo landmark, while its REIT recently snapped up a distribution facility for $53.7 million.
* Joining the mix are American Real Estate Investment Trusts (REITs), responding to the call for more retail space. Tennessee-based CBL Properties partnered with local Brazilian developers, Tenco, to build a shopping mall in the coastal city of Macaé.
"I am very bullish on the market," said Maceira. "We are seeing a very good moment in Brazil."
"There's a considerable amount of markets and dense enough population to support shopping centers in middle markets as well as in Rio and Sao Paulo," said CBL President Steve Lebovitz. "It makes us feel there is a very bright future in Brazil."
While the real estate gold rush is expected to continue, the dollar, which has been relatively strong against Brazil's real, is beginning to show some weakness.
"Investment flows, be it from trade or portfolio investments, will continue to support the real this year," Francisco Carvalho, head of currency trading at Liquidez Corretora DVTM, told Bloomberg.
Brazil's currency soared 20 percent in 2007, the fifth straight annual advance and the biggest since a 22 percent rally in 2003. The real gained the most against the dollar last year among the 16 most actively traded currencies.
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