Overseas investment in Brazil property hits record high
Tuesday, November 20, 2012
Source: Ivan Radford
Overseas investment in Brazilian real estate has hit record highs, says a new report by Ernst & Young Terco.
EYT's research shows that foreign direct investment in the country's property reached between R$5 billion and 10 billion, according to Brazil Investment Guide, with GDP of these investments estimated at over R$170 billion. In the next 10 years, that may rise even further to R$ 270 billion.
The growth has been mostly attributed to demand, in addition to rising incomes and increasing opportunities in the construction industry. Moreover, operating profit in Brazil property is "currently doubling what is achievable in the USA and China".
The figures follow EYT's 2012 Attractiveness Survey for Brazil, which showed the country as more appealing than other Latin American markets, with almost 7 in 10 business leaders declaring the country as the most desirable place to establish operations.
A growing middle class, strong domestic demand and huge untapped reserves of natural resources, combined with the openness of Brazilian society, improved regulatory framework and easy financing, are all combining to drive the FDI momentum forward.
Indeed, Brazil is the second most popular global destination in terms of FDI value and fifth in terms of FDI projects. The number of FDI projects in Brazil increased by 39% in 2011, to a record 507. These projects created an estimated 161,166 jobs.
The US, UK, Japan, Germany and Spain accounted for 59% of the FDI projects in 2011. China is emerging as a strong partner of Brazil, with investment and trade linkages increasing between the two countries.