Brazil real estate funds: A local affair
Brazilian real estate funds are maturing – but getting international accounts involved is no easy task
By Ben Miller
While other asset classes in Brazil languish after a
disappointing year, investment in Brazilian real estate funds
shows little sign of letting up following record growth in
The market is poised for yet more expansion as investors
flock to the sector, which offers the comfort of regular income
and a diversity of projects in need of funding.
The real estate fund, or Fundo de Investimento
Imobiliário (FII), nevertheless remains an asset for the
domestic retail market. Thanks to the attractive tax
exemptions, more than 87% of investors were individuals as of
October 2012, according to market research firm Uqbar. Analysts
say broader institutional participation could provide the spur
for transforming the asset class.
Brazil’s government scrapped the IOF tax on
FIIs in February, in a bid to draw in more buyers. But, like
real estate trusts in many countries, Brazilian FIIs must pay
out 95% of...
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