To read this full article you need to be subscribed to Institutional Real Estate Americas
Merely bad: Taking advantage of a transition period in Brazil
I was talking with a local investor in Brazil who has been very successful investing in real estate, and he told me of a quote from Arjun Divecha, chairman of Grantham, Mayo, Van Otterloo & Co. and head of its emerging markets equity team, which described this investor’s investment philosophy perfectly: In emerging markets, “you make more money when things go from truly awful to merely bad, than when they go from good to great.”
That is the investment opportunity that exists in Brazil right now. In fact, it is important to recognize a shift from “truly awful to merely bad,” from an asset owner’s perspective, may represent perfect timing from an asset buyer’s perspective.
The following factors are positive for investors in Brazilian commercial real estate:
Valuations of assets are still relatively low Liquidity in the market remains limited Competition is limited beyond the absolute largest and highest trophy assets