Private equity titans are swooping in on COVID hotbeds in search of deals. That means a lot of new interest in apartments, malls and offices in Brazil.
Firms linked to billionaires Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira are increasing bets on strip malls, office space and long-term rental apartments. The goal is to seize opportunities created by the pandemic in a nation that’s leading the world in daily Covid deaths.
“The next 18 months will be very challenging for commercial real estate and that’s the time to make purchases, because sellers tend to get more flexible on prices,” said Fabio Itikawa, chief financial officer of Sao Carlos Empreendimentos e Participacoes SA, which was created by the 3G founders and is now owned by their heirs.
Commercial real estate prices in Sao Paulo rose 0.65% in the 12 months ended in February, according to the FipeZap Index, compared with 5.2% inflation for the same period.
“When the market is doing badly is when you get the best opportunities,” Itikawa said.
The malaise though is presenting possibilities for Sao Carlos, which specializes in buying, refurbishing and reselling office space.
In February, it announced the acquisition of three floors of the Morumbi Office Tower in Sao Paulo’s Chacara Santo Antonio neighborhood for 44 million reais ($7.8 million). The seller was a wealthy family struggling with vacant space and unhappy tenants asking for rent discounts, Itikawa said, declining to identify the owner.