Ernst & Young report that Brazil is looking good - Emerging Real Estate

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 Ernst & Young report that Brazil is looking good

2011 promises to be another strong year in Brazil as foreign investors look to increase the capital they are willing to put into the country’s real estate industry.

At least that is what Ernst & Young are indicating after their latest research report. According to this latest report, two thirds of real estate investors who are committed to emerging markets in Latin America have funds set aside to buy in Brazil in the next 12 to 24 months. Ernst & Young gathered this information from surveying over 60 private equity fund managers, investment bankers and real estate developers.

‘It is pretty substantial for a country that less than a decade ago was considered high risk due to an unstable economy, hyperinflation, mounting debt and a volatile currency,’ said Rogerio Basso, the Latin American hospitality practice leader at Ernst & Young.

These days Brazil’s economy has been boosted by the emerging middle class and their access to credit which has led to strong investment across the board from residential to commercial assets and also hotels.
  
‘In fact, the lodging sector is attracting keen attention, with approximately 50% of investors who are interested in Brazil indicating that hotels are a primary target for them Brazil’s lodging sector is benefitting from an increase in middle class disposable income, as well as expanding business travel as a result of a robust economy,’ he added.

Of course, we have mentioned before that two of the great catalysts for this surge in interest and development are the world’s two biggest sports events taking place in the country. Firstly the World Cup in 2014 with the Olympics following two years later means a particularly promising outlook for the hospitality sector.

Experts are keen to point out that foreign investors are not looking to build buy and own hotels with the sole intention of flipping them for higher prices when the events move closer. Ernst & Young’s survey indicated that around 60% of investors indicated they would hold assets for six years or greater.  ‘This suggests that most investors see Brazil’s growth potential and large domestic market as a motivator for investment,’ said Michael Fishbin, Ernst & Young’s Global Hospitality Leader.