Marcelo Santos_2_2014photoFacilitator of one of Brazil GRI’s discussion groups, the executive states that pessimism about real estate market is exaggerated. And he explains why.

 

In the second half of October, C&W Brazil’s vice president held an informal meeting of Brazil GRI – Global Real Estate Institute, which took place on October 15–16, at the WTC Convention Center, in São Paulo.

 

Along with local and foreign investors, developers and decision-makers, the executive addressed the subject Office – Taking time, but… how much longer?. “It was a discussion in which I made some questions, and then the conversation came to life. People started discussing to each other, then my role was simply to mediate”, explains Marcelo, and he proceeds: “It was productive. We had a chance to take a real exchange of experience among every market players”.

 

In an exclusive interview, Marcelo Santos presents some of the issues discussed during the event. Check it out!

 

What was the GRI general mood?

Overall, the event was marked by a great pessimism regarding the real estate industry, which, in my opinion, is exaggerated. To a certain extent, I understand it, it’s ok to doubt, but it’s wrong. How come? Because each and every market tends to operate in an irregular way. It goes from the elation to depression quite quickly. Eventually, it reaches a balance point, but before it has its share of ups and downs. Now the real estate market is passing through a very discouraging period, which is quite bad as it does not reflect our capacity.

 

Did the group as a whole agree with you?

I think that everyone agreed that once we are able to offer a good product and that is also well positioned we will obtain some demand, obviously not reaching the intended price though. All projects being delivered today to the market were three, four, five years ago, when the real estate world was quite different. Brazil was a much richer country than today, growing 6%, 7% a year. Our expectations were higher.

 

But the fall of the market was not expected?

No, none of this was expected. However, some people, including me, criticized the fact of many people hoping that rents and the square meter value would rise indefinitely, as happened in the United States. Here in Brazil we hit a great limiter: purchase power. Most people do not have enough income to buy. Now, prices are coming to their normal level. The market is going through a stage of adjustment and accommodation.

 

How do you see the real estate market from now on?

I believe that over the next 20 years the market will grow a lot in all segments. – from shopping malls to industrial, as well as business offices. Some people are noticing this scenario and intend to buy, invest, take advantage of this period, in which a double alignment is in course: Brazil is passing through an adjustment process and we have surplus of some assets in the market. Therefore, it is the right time to invest as, let’s say, in two or three years ahead, and if Brazil makes the proper adjustments, we will grow again and prices will rise.

 

You mean, the prices of our real estate will not decrease?

Those who say that the price of real estate will plunge are those who have not acquired an apartment – usually individuals, analysts, economists, etc. – and they say so to justify the fact they have not bought before.

 

Regarding the issue about the subject Offices – Taking time, but… how much longer?, what is your answer?

Actually, the time is now. Taking into consideration that you are in the right sector, at the right place, you will make a profit. On the other hand, if you are capitalized, it is time to invest in an worthy purchase opportunity. The time has come.