With billions in investment and state-of-the-art installations, Pecém Port, situtated in the Northeast Brazilian state of Ceará, is on track to become one of Brazil’s of largest import-export centres. Together with its steel plant and oil refinery, the port will create over 130,000 jobs and add double-figure increases to Ceará’s GDP between now and 2020. This unprecedented injection of wealth will have huge implications on the demand for property in the area.
Pecém Port, situated around 55km north of Fortaleza, is undergoing major expansion in its bid to become northeast Brazil’s main cargo hub. The port has the advantage of being the closest in South America to North and Central America, Caribbean, Europe, Africa and China, and is currently registering record levels of freight handling as more and more companies make the most of the port’s strategic location.
To cater for the port’s increased activity, state authorities have invested heavily in infrastructure upgrades in and around Pecém. These include the conversion of the CE-085 highway to dual carriageway between Fortaleza and the Pecém exit, completed in 2014. National government officials have just approved financing for the extension of the Transnordestina railway line to Pecém from Salgueiro in Pernambuco.
Expansion of Pecém is currently in its third stage with a total investment of R$1.2 billion and includes extension of the breakwater, a new quay, terminal and berths, and improved entry and exit to the port. The port is already reaping rewards from its expansion – between January and October this year, the port handled a record 6.9 million tonnes, up 46 per cent on the same period in 2014. Based on current growth, Pecém is projected to handle 60 million tonnes by 2020 when the port will be operating to capacity.
As well as freight and cargo handling, Pecém Port also includes a vast industrial complex with two major projects under construction. The Pecém Steel Company (CSP), the first integrated steel plant in northeast Brazil, is 60 per cent built with completion scheduled for 2016. A joint venture between the Brazilian Vale and the South Korean Posco & Dongkuk, total investment at CSP is around US$5.1 billion.
The construction of the steel plant has provided direct and indirect employment for around 23,000 people. When the plant is operational and producing its projected 3 million tonnes of steel slabs a year, 4,000 jobs will be created plus a further 12,000 jobs indirectly.
The Premium II oil refinery, owned by the Brazil oil giant Petrobras, is also projected for construction in the Pecém Port complex. Petrobras is currently undertaking a technical review of the refinery and bidding is due to start in the near future. When completed in 2017/8, Premium II will have the capacity for 300,000 barrels a day and provide direct and indirect employment for around 90,000 people.
To date, both Pecém Port and CSP have put the emphasis on employing locals. However, staff for technical and engineering roles are unavailable in the area and as a result, the companies need to call on specialists from southeast Brazil. Petrobras will also need to bring in skilled refinery staff from outside Ceará. This massive influx of professionals earning higher salaries will have the dual effect of increasing the local population, wealth and demand for quality housing.
Skilled and highly-paid technicians and engineers will undoubtedly have discerning tastes in property and be looking for high-end accommodation to match their lifestyles. Pecém itself is small (the population is around 7,000) and further development of the town is restricted due to expansion of the port in the south and the protected dune areas in the north. As a result, these professionals will be forced to look further afield for their accommodation options and most will be prepared to include a commute in return for high quality housing.
The alternative is Fortaleza to the south of Pecém, which has a much higher price tag and even more so for beachfront property. Due to the expansion of Pecém port, land prices are equally high with prices per sqm around R$600. Plots at The Coral in comparison start from R$193 per sqm. Fortaleza is also at a disadvantage as the type of living environment, accommodation and luxury resort living offered by The Coral is simply not available in the state capital.
Construction work at The Coral is progressing well and resort infrastructure is nearing completion. The resort and its facilities are on track to be fully operational by 2016, coinciding with the scheduled opening of the CSP plant at Pecém Port and the construction of the Petrobras Premium II refinery.
Mortgages become available to Brazilians once infrastructure works are complete giving workers at Pecém the option to rent or buy. 2016 is clearly the year to be the owner of a newly completed luxury villa to be able to sell or rent to the local market. Now is the perfect time to buy a plot and start building a villa for investors to ensure they capitalise on this ready-made exit strategy.
Source: Government of Ceará, Ceará Portos, Port Finance International, Ceará Development Agency (ADECE-Agencia de Desenvolvimento do Estado do Ceará S.A.), CSPECEM, Portal Pecém, Petrobas