Brazil’s commercial property market shows signs of life as growth picks up after recession
South Korea’s Mirae offers two office towers in Sao Paulo for sale for US$272m
Mirae Asset Global Investments has put two office towers in Sao Paulo worth around 1 billion reais (US$272 million) up for sale, three people familiar with the matter said, as South America’s largest property market kicks into gear.
Seoul-based Mirae, which has real estate investments on three continents, has offered to sell towers A and B of the upscale Rochavera Corporate Towers complex, said the sources, who spoke on condition of anonymity as the matter is private.
Together the two towers offer about 56,000 square metres (600,000 square feet) of office space in a fast-growing Sao Paulo business district.
The Rochavera sale process is one of several in the pipeline for the corporate real estate market in Sao Paulo, Latin America’s financial hub, which is gathering steam as Brazil exits its worst recession in decades.
Vacancy rates have fallen to around 20 per cent, still high by historic standards but an improvement from previous years, and this has drawn interest from buyers looking to catch an upswing.
Among the real estate companies that have shown preliminary interest in the Rochavera towers is Cyrela Commercial Properties (CCP), which last year set up a joint venture with the Canada Pension Plan Investment Board to invest US$400 million in Brazilian offices, according to one source.
Mirae did not respond to requests for comment. CPP declined to comment.
Several other companies have made investments in Sao Paulo offices or have expressed interest in investing soon. Buyers include foreign groups such as Brookfield Asset Management, domestic firms such as BR Properties and local real estate investment trusts, including funds run by Banco BTG Pactual.
Some assets hitting the market in Sao Paulo in recent months are owned by distressed sellers.
The real estate arm of scandal-plagued Odebrecht, for example, has agreed in principle to sell a project to Hemisferio Sul Investimentos expected to be worth 1.2 billion reais when finished, Reuters reported last month.
Other assets are owned by international funds that bought into Sao Paulo real estate at its trough and aim to book a profit before Brazil’s highly unpredictable October elections.