In the first half of the year, commercial real estate prices were stable in four of the most important Brazilian markets: Rio de Janeiro, São Paulo, Belo Horizonte and Porto Alegre, according to the latest FipeZap Commercial Index.
Rio was the city with the highest sales prices: R$ 10,427/sqm, while São Paulo led the way with the highest rents: R$ 43,18/sqm.
Looking into June, the top five Brazilian neighbourhoods for commercial sale prices were all in the Cidade Maravilhosa, with Leblon topping the list at R$34,478/sqm. In a distant second was Ipanema, where listings averaged R$24,115/sqm, followed closely by Jardim Botânico at R$23,524/sqm Rounding out the top five were Catete at R$16,041 and Flamengo at R$15,929/sqm.
Similarly, for commercial rental prices, Rio dominated with four of the top five highest average listings among Brazilian neighbourhoods in June. Again, Leblon easily sat atop the list at R$126.51/ sqm. Ipanema was next at R$82.83, followed by Botafogo at R$69.43 and Jardim Botânico at R$ 66.59/sqm. Closing out the top five for commercial rental prices was Itaim Bibi in São Paulo, where prices averaged R$64.97/sqm in June.
Taking into account the last twelve months, commercial sale and rental prices fell slightly, -2.07 % and -3.06 % respectively across Brazil.
However, both figures fell far below the accumulated inflation rate during the twelve-month period of 4.39 %, as calculated by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics).
The latest FipeZap Commercial Index also compared Brazil commercial real estate as an investment vehicle compared to lower risk alternatives, such as the CDI (Certificado de Deposito Interbancário, in English, Interbank Certificate of Deposit).
When compared to the CDI, a daily average rate of overnight interbank loans, those who have invested in Brazil commercial real estate have taken losses.
Over the last twelve months, the CDI has yielded a return of 6.8 %. However, according to FipeZap, owners of commercial real estate who leased their property were only able to gain an average return of 2.2 % during that period.
The FipeZap Index is prepared by the Economic Research Institute Foundation (Fipe) using data from the Brazilian Institute of Geography and Statistics (IBGE), in partnership with the Brazilian real estate website, Zap Properties.
Original Story: The Rio Times | Nelson Belen
Photo: FreeImages.com/Carlos Koblischek
Translation & Edition: Prime Yield