Commercial Real Estate Market in Brazil - Growth, Trends, and Forecast (2020-2025)

The Commercial Real Estate Market in Brazil is segmented by Type (Office, Retail, Industrial, Logistics, Hospitality, and Multi-Family) and by Key cities, urban-suburban and rural markets.

Market Snapshot

Study Period:

2016-2025

Base Year:

2019

CAGR:

11.89 %

Major Players:

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Market Overview

The Brazilian economy is on the verge of having robust growth after a long period of recession. The economy has grown at 1.1% in 2018 but the recovery has been sluggish. The Brazilian economy, construction signals a solid resumption of growth in the real estate market in 2019. The growing economy is supported by low levels of interest rate, stable inflation, and expectancy for reforms.

In November 2019, the average selling price of commercial real estate accumulated a decrease of 2.55%, while the average commercial leasing price advanced 0.37%, in nominal terms. Commercial real estate sales prices fell 2.29% between January and November 2019 in ten cities of Brazil according to the source. The decrease was mainly due to selling price decrease in major cities while rental prices observed a nominal increase in cities.

The rental room and office complex suffered from the vacancy as companies shrunk. In 2019 rental prices continue to hold, with very little variation in values as there is a large supply of vacant spaces. São Paulo displayed the highest average value for sale and rental of rooms and commercial complexes.

Scope of the Report

The report provides key Insights into the Brazil Commercial Real Estate market. It focuses on the market dynamics, technological trends and government initiatives taken in the residential real estate sector. Also, the report sheds a light on the key trends in the market like factors driving the market what are the restraints to market growth and opportunities going forward. Additionally, the competitive landscape of the commercial real estate market of Brazil is depicted through the profiles of key players active.

By Type
Offices
Retail
Industrial
Logistics
Multi-Family
Hospitality
By Key Cities
Rio de Janeiro
Sao Paulo

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Key Market Trends

Drop in Vacancy Rates in Industrial Logistics Real Estate

Brazil logistics market indicators have performed well in the first half of 2019 and have continued to grow in the third quarter. The third quarter has second-highest net positive absorption in the period which has led to a sharp decline in the vacancy rate. The current vacancy rate in the Brazilian market stands at 19.1% which is the lowest since 2014.

In Q3 2019, Sao Paulo had a vacancy rate of 17.9% which is lower than the previous year. This is mainly due to the great occupations of retail trade and logistics companies. The other reason for the low vacancy in Sau Paulo is due to the low supply of inventory. However, the pipeline for the Q4 in 2019 is very large which might pressure up the vacancy rate.

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Sao Paulo and Rio de Janeiro has high Average Prices and Rents in Commercial Real Estate in Brazil

Rio de Janeiro had the highest average price for the sale of commercial real estate while Sao Paulo recorded the highest average price of commercial rent. Among the four capitals monitored by the index, only Porto Alegre registered a rise in commercial property leasing.

The average price for the sale of commercial real estate in August 2019 was Real 9,539per meter square. For rent, the average price was Real 39.54 per meter. Average selling and renting prices for commercial real estate fell further in August 2019, according to a survey in Brazil. According to the source, there was a 0.51% decline in sales and a 0.46% decline in lease.

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Competitive Landscape

The commercial real estate market in Brazil is fragmented and competitive. The commercial property market will remain in despair as further political instability dampens investor sentiment and occupier appetite. The capital markets in Brazil expected to generate opportunities for local and international players. There is an increase in the pace of launches of construction companies in the country. Major players in Brazil commercial real estate are Multiplan Empreendimentos Imobiliários S.A, Cyrela Commercial Properties SA and Log Commercial Properties.

Table Of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic Scenario and Consumer Sentiment

    2. 4.2 Commercial Real Estate Buying Trends - Socioeconomic and Demogpaphic Insights

    3. 4.3 Government Initatives, Regulatory Aspects for Commercial Real Estate Sector

    4. 4.4 Insights on Existing and Upcoming Projects

    5. 4.5 Insights on interest rate regime for general economy, and real estate lending

    6. 4.6 Insights on rental yields in commercial real estate segment

    7. 4.7 Insights on capital market penetration and REIT presence in commercial real estate

    8. 4.8 Insights on public-private partnerships in commercial real estate

    9. 4.9 Insights on real estate tech and startups active in real estate segment (broking, social media, facility management, property management)

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

    4. 5.4 Challenges

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Offices

      2. 6.1.2 Retail

      3. 6.1.3 Industrial

      4. 6.1.4 Logistics

      5. 6.1.5 Multi-Family

      6. 6.1.6 Hospitality

    2. 6.2 By Key Cities

      1. 6.2.1 Rio de Janeiro

      2. 6.2.2 Sao Paulo

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Concentration

    2. 7.2 Company Profiles

    3. 7.3 Developers

      1. 7.3.1 Cyrela Commercial Properties SA

      2. 7.3.2 Log Commercial Properties

      3. 7.3.3 Local Imoveis

      4. 7.3.4 Bauer Imoveis

      5. 7.3.5 Grupo ZAP

    4. 7.4 Real Estate Agencies

      1. 7.4.1 Madrona Advogados

      2. 7.4.2 TRK Real Estate

      3. 7.4.3 CBRE

      4. 7.4.4 VivaReal

      5. 7.4.5 Intelligent Real Estate Solutions

    5. 7.5 Other Companies(startups, associations, etc.)

      1. 7.5.1 Bemdireto

      2. 7.5.2 Agente Imvel

      3. 7.5.3 Loft

      4. 7.5.4 Linq Brasil

  8. 8. FUTURE OF THE MARKET AND ANALYST RECOMMENDATIONS

  9. 9. INVESTMENT ANALYSIS

    1. 9.1 Direct Investments

    2. 9.2 Indirect Investments

  10. 10. DISCLAIMER

  11. 11. ABOUT US

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