2023 has been the year for Brazilian real estate shares, which gained over 38% between January and September. Within Brazil, investors' radars have turned to the Northeast, making the region a property hotspot. According to Money Times, real estate in Northeast Brazil is among the hottest this year, whether residential, hotel or logistics.
Northeast Brazil property on the radar
A recent article reported that REITs and companies listed on the Brazilian stock exchange have placed Northeast Brazil firmly on their radar. As a result, investment has surged in the region’s nine states, both in REIT shares and physical establishments.
According to company sources quoted in the article, Northeast Brazil now accounts for significant proportions of their property investment. Logistics, particularly distribution warehouses, and hotels take the lion’s share.
The hottest spots in the region are in the biggest capitals, such as Fortaleza and Salvador. However, popular tourist destinations on the Ceará coast are also gaining popularity among big investors.
Boom in logistics real estate in Northeast Brazil
One example in this sector is Log Commercial, a business that currently has Class A logistics warehouses in six states. Its expansion plans include the addition of 400,000 square metres of gross rental area to its portfolio by 2028. One-third of this development will take place in Northeast Brazil.
“We’re working in Natal, Salvador and Fortaleza,” said Sergio Fischer, Director General of the company, “because our clients want quality projects in these areas.” He added that the lack of supply and high demand in Northeast Brazil means that property prices are on par with those in Sao Paulo. “I’m very excited about Northeast Brazil,” he said.
REITs invest in hotels in the region
Hotel investment in Northeast Brazil has also caught the eyes of the REITs on the Brazilian Stock Exchange. Hot destinations include the Ceará coastline, particularly north of Fortaleza. For example, two REITS, XP and Vectis Juros Real Estate, plan to develop in Jericoacoara and Camocim.
The latest projects propose the construction of four hotels in Preá, near Jericoacoara, and a beach resort in Camocim. New-build apartments and villas also form part of the REITs masterplan, in a region where the supply of tourist accommodation still lags behind demand.
Sustainability is a top priority
ESG criteria now stand at the top of developers’ priorities. As a result, these environmental, social and governance metrics form part of the new real estate projects in Northeast Brazil.
Green energy sources are easy to come by in the region, known for its plentiful supply of wind and solar-generated electricity. Developers are also incorporating clean water treatment measures into new projects, adding to their ESG value.
(Source: Money Times)