São Paulo – It was a tough year for the real estate fund market. Ifix, which combines the major FIIs traded on the Brazilian stock exchange, posted a decline of nearly 6% in 2021, after falling more than 10% in 2020.
The cycle of high interest rates, uncertainty about the pandemic, and political and financial uncertainties are among the factors that explain the performance of real estate funds.
In the first painting of FII محادثات talks, which is a real estate fund event promoted by InfomoneyIn this market, some of the major fund managers pointed out how to find opportunities in the midst of this opposite scenario.
Analytics were conducted by André Freitas, CEO and CIO, Hedge Investments; Cayo Conca, Partner in Charge of the Capitânia Real Estate District; and Leonardo Santana, Director of XP Asset.
For managers, in the short term, “paper” real estate funds, which invest in securities associated with the real estate market, remain the most attractive. FIIs with CDI Indexed Securities (interbank certificate of deposit) They benefited from higher interest rates. In September, the central bank raised the key rate for the economy, Selic, to 6.25% annually. This is the fifth consecutive increase in the rate of 2% in January.
“As the interest rate goes up, the yields of CDI-linked fiat money tend to increase. After the index is released, there is a lag of about three months until the income is distributed to the investor. Therefore, there is a lot of accumulated inflation that needs to be distributed to short-term investors,” he explains. Leonardo Santana.
On the other hand, the “brick” fund sector, such as those that invest in offices, shopping malls and logistics assets, tends to suffer during times of high interest rates. But managers see opportunities in these sectors, too.
With the pandemic, money investing in shopping malls and offices has lost its appeal, and the property values that are part of this FII’s portfolio have been pretty out of date in the past couple of years. From the respondents’ point of view, it is cheap.
“Sometimes we keep looking at the income (dividends) paid by the paper fund (11%) and office fund (8%), but the capital gains that can occur in the real estate price with this lag are significant,” says Andre Freitas, who calculates the returns up to 25%. To further the analysis, he cites this week’s negotiations between Patio Victor Malzoni in São Paulo (SP).
Bluemacaw Catuaí Triple A (BLCA11) has purchased six panels of the building that are a landmark in Avenida Brigadeiro Faria Lima, the financial heart of São Paulo and one of the most sought after in the office sector. The deal sold for around R$40,000 per square metre, much higher than what was negotiated in recent months.
For analysts, the logistics sector remains attractive and malls are starting to recover with the reopening of malls across the country. Taking advantage of existing discounts, both represent medium and long-term opportunities, according to experts.
In the valuation of Cayo Konka, in the medium term, the corporate panel segment is the best opportunity to earn capital, but there are simpler alternatives for those who want to start now. “There are funds of funds that trade at a discount of up to 20% of the value of the shares, which is the market value of the funds,” he explains.
“For those who are entering the market now and don’t know what to buy, FOF is a simple way to capture this potential upside in real estate funds,” he continues.
FII 2021 talks to follow on Wednesday (Register here) with panelists Ricardo Calo, Vice President of Marriott International, Central and South America; Felipe Giad, HSI Real Estate Fund Manager; Leandro Busquet, Head of Real Estate Investments at Yenchi Partners; Pedro Carraz, partner responsible for managing FIIs at XP Asset; André de Abreu Pereira, Partner and CEO, Tellus; Carlos Martins, Partner and Director of Real Estate Funds at Kinea; Caio Castro, Partner at RBR Asset.
There will also be an additional panel on paper funds and their views amid the rate hike, with the participation of Camila Almeida (Habitat Capital Partners), Bruno Pagnaroli (Mawa), Yannick Bergamo (Iridium) and Jose Eduardo Varandas (Valora).
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