Your Partner to Investing in Brazil

Why Land?

Is Land a Safe and Profitable Investment ?

Land has traditionally been one of the best forms of investment and in countries such as Brazil, the wealthy have found land to be a safe investment against inflation. 

The Brazilian economy is now showing strong fundamentals such as low inflation, strong growth, falling interest rates and declining unemployment/rising basic pay.  All of these factors are driving up real estate prices just as in the other BRIC economies.

Many people invest profitably in land by adopting one of the following strategies.

• Land Banking/Speculation - Investing in land in an area where the local area is being redeveloped or rezoned. Demand is especially strong when the economy is developing as demand increases and the supply is finite.
• Small Development - Buy individual plot(s) and build a house.  This is a good route for those seeking to start as a property developer to build their own home for a fraction of the value. For example if you buy a small plot and build a small house your total investment could be around £30,000 and you could resell for around £40,000 excluding capital appreciation.
• Land Redevelopment - This is ideal for the large investor who buys a large piece of land and gets planning permission and develops the site. - Value creation occurs when a piece of land is developed and becomes useful to someone.  Obtaining planning permission and developing your land is a sure way to add value.  The increase in value is a function of the location and the development plan.

In Brazil, buying plots is much more common than the UK.  Historically the well-off have preferred to have a bespoke designed home and the less well-off have found it cheaper because of the lack of availability of finance and mortgages.

Established models, such as those from companies like Alphaville  prove that the land development model in Brazil works and is very profitable.  Alphaville masterplan, zone and develop the infrastructure to sell residential and commercial lots within their gated developments for around US$100 per square metre.  They are perhaps one of the best known land development companies in Brazil and are currently developing almost 15,467 plots across Brazil.

Recent success stories include the Alphaville Natal where demand was so high, over 900 plots were sold in only 16 hours.  After development capital growth is also strong in good quality developments.  In Alphaville Fortaleza; plot owners saw price appreciation of over 80.4% in the 20 months following the launch of the project.

Compared with UK prices, prime sites (beachfront or city centre) in Brazil are still relatively cheap.  However not all land is equal in terms of investment potential.