Brazilian real estate looks extremely attractive for Global retailers

The global investing community has recognized Brazil as a promising destination for capital investment, as the country's market has become more affordable, according to a new report.

Management consulting firm A T Kearney's Global Retail Development Index shows that Brazil is one of the top ten most appealing locations for investment. Hana Ben-Shabat, a partner at A.T. Kearney and co-leader of the study said, "With economic conditions in developed markets improving so slowly, emerging markets are becoming much more important sources of growth for global retailers."

Brazilian real estate suddenly looks extremely attractive-especially in relation to pricey North American and European markets. Foreign investors are steadily placing about $200 million a year in Brazilian properties, but that figure skyrocketed last year to a record $2.5 billion. Brazil's government is currently supportive of development and property rights and trying to upgrade opportunities without nationalizing industries. President Lula realizes that foreign investment can improve the lot of poor people.

Andrea Stephen, Cadillac Fairview Corp. Ltd executive vice-president says that CF looked at the other BRIC markets and concluded the conditions are better in Brazil to generate good returns without taking on extraordinary risk.

Meanwhile, Scott Wolstein, Developers Diversified's chairman and CEO, said in a statement, "we find the opportunity to double the size of our investment in Brazil over the next few years highly compelling, considering current unleveraged development IRRs in Brazil are around 20% and cap rate compression on existing assets is expected to accelerate."

In related news, The InterContinental Hotels Group said it has signed agreements for building of four new hotels in the country and 12 cities will now have a Holiday Inn Express. Alvaro Diago, area president at IHG Latin America, said the booming tourism industry in the country makes it ideal for investment, which is good news for people who already have property in Brazil.