Presentation Transcript

1. Retail MarketBrazil

   Tim Gifford, FRICS, S.V.P. Capital Markets CBRE January 2012
2. PART I The Drivers
3. Country Overview - Brazil Souces: IBGE, CIA World Factbook, World Bank, IMF
4. Macroeconomic Overview - Brazil Souce: World Bank Souce: IBGE, World Bank While emerging economies can generally be characterized by a skewed distribution of income, Brazil’s growth is pulling a significant percentage of the population out of poverty and into the middle class, a situation in which increased levels of discretionary income fuel large increases in retail consumption. This increased economic activity, in turn, creates new jobs and distributes additional income among the population. “More than 50% of the Brazilian population of over 190 million have become middle class, earning between approximately $800 and $3,300 per household per month. The rich are much better off, profiting from the stock market and commodities boom.” 1 “Brazil's main consumer confidence index picked up in November for the second consecutive month, as inflation continued to show signs of slowing down […] Consumer Confidence Index, or ICC, rose to 119 points in November from 115.2 points in October.” 4 “New minimum wage will inject R$47 billion (USD 25.8 billion) into the economy.” 2, 3 http://www.edhec-risk.com/latest_news/featured_analysis/RISKArticle.2011-12-20.4128 http://oglobo.globo.com/economia/novo-salario-minimo-vai-injetar-47-bilhoes-na-economia-3519466 http://www.correiobraziliense.com.br/app/noticia/economia/2011/12/27/internas_economia,284258/aumento-do-salario-minimo-vai-injetar-r-47-bilhoes-na-economia.shtml http://online.wsj.com/article/BT-CO-20111125-703320.html
5. Macroeconomic Overview - Brazil “Brazil experienced the strongest investment activity of the Latin American markets and is one of the preferred global destinations for foreign capital.” 1 Souce: World Bank Effects of the Economic crisis of 2008/ 2009 were observed worldwide, but improved policies and a solid macroeconomic landscape enabled Brazil to recover quickly and effectively, as evidenced by an impressive GDP growth of 7.5% and record levels of Foreign Direct Investment in 2010. CBRE Global Capital MarketView Q3 2011
6. PART II The Market
7. 200 187 180 160 140 Brazil has low supply of Shopping Center Space (4Sqm of GLA per 100 inhabitants) 120 113 100 80 59 60 40 30 23 21 20 20 14 13 8 4 3 0 United States Canada Australia Japan UK France Spain Germany Italy Mexico Brazil Argentina Side Note: In Brazil, even in the top 15 markets, average GLA per 100 inhabitants is equivalent to 8.5/Sqm; According to ABRASCE, Brazil´s supply of shopping center space is estimated to be 30% below equilibrium. Shopping Center Real Estate Market- Brazil Comparative GLA Distribution Worldwide Square meters per 100 inhabitants Source: CBRE Brazil
8. Shopping Center Real Estate Market- Brazil Total Stock in Brazil by Region Highlight: Southeast Region 430 Shopping Centers with over 9.5 billion m2 Source: CBRE Brazil
9. Shopping Center Real Estate Market- Brazil Total Stock Quality: Southeast Region 230 Shopping Centers with 5,796,000 m² of GLA Source: CBRE Brazil
10. Shopping Center Real Estate Market- Brazil Since 2005, gross leasable retail area in shopping centers has grown 46% from 6.5 to 9.5 million m2, while earnings have jumped 90% from R$ 45.5 billion to R$ 87 billion. The figures are even more impressive when exchange rates are taken into account, with earnings jumping from USD 18.7 billion to USD 49.5 billion. What it means: growth in earning potential has outpaced growth in leasable area, driving investor demand for development and acquisition. Source: ABRASCE
11. Shopping Center New Stock Forecast - Brazil Retail activity in Brazil in 2010 came close to USD 900 billion, or nearly R$ 1.6 trillion. Malls account for 18% of all retail activity in Brazil, and their sales correspond to around 2% of GDP. 1 There are currently 71 malls accounting for over 2,000,000 m2 scheduled to be delivered in Brazil before the end of 2013. Brazil’s economic growth, increased quality of living, and currently observed upward social mobility will continue to support and drive retail sales and the demand for retail space for the foreseeable future. ABRASCE
12. New Stock Forecast - Brazil Source: CBRE Brazil
13. Major Retail Players- Brazil Source: CBRE Brazil
14. Major Cross-Border Investment Players- Brazil Source: BOVESPA
15. Major Cross-Border Investment Players- Brazil BR MALLS PARTICIPAÇÕES S.A is the largest integrated shopping centers company in Brazil, with participation in 45 shopping centers totaling 1.428 million m² of gross leasable area,and ownership of 794,500 m². EQUITY INVESTMENTS owns a stake in BR Malls. BROOKFIELD INCORPORAÇOES BRASIL , formerly known as BRASCAN, is a wholly-owned subsidiary of the global company BROOKFIELD ASSET MANAGEMENT INC. In Brazil, the company owns 12 shopping centers with an additional 2 under development, as well as 2 corporate centers. MULTIPLAN EMPREENDIMENTOS IMOBILIÁRIOS S.A.is one of the leading developers, owners, and operators of Shopping Centers in Brazil. The Company manages its own Shopping Centers in which it holds equity interest. Multiplan manages 13 owned shopping centers, comprising 551,368 m2of gross leasable area and close to 3.604 stores. Multiplan has majority control of 11 of the 13 Shopping Centers that they manage.1 ALIANSCE SHOPPING CENTERS, owned by GENERAL GROWTH PROPERTIES (US) and the local company IGUATEMI EMPRESA DE SHOPPING CENTERS S.A., owns shares in 15 shopping centers and manages an additional 9. Its operations total 494,906 m² of gross leasable area distributed among over 2.500 stores. IVANHOÉ CAMBRIDGE owns an interest in several Brazilian shopping centres, development projects, and in one shopping centre management company, through a partnership with ANCAR IVANHOE, the country’s 5th largest real estate company. The company is involved with 11 shopping centers, totaling 426,212 m2. SONAE SIERRA BRASIL is controlled by the European SONAE SIERRA and the American DDR CORP. The company is one of the leading developers, owners, and operators of shopping centers in Brazil. The company owns and manages 10 shopping centers, totaling 353,000 m2of gross leasable area and 1,973 stores. REP – REAL ESTATE PARTNERS specializes in the development and management of small to medium commercial centers. The company has successfully developed over 40 projects and currently owns/ manages 23 centers. REP is KIMCO REALTY CORPORATION’s JV partner in Brazil. Kimco started out with a single mall in the south of Florida, and now owns over 16.7 million m2 of gross leasable area and over 1,500 properties across the world. Source: Respective companies’ websites.
16. Retail Sales Value x Lease Rates – Brazil Southeast South North Northeast Midwest Source: CBRE Brazil
17. Brazil – MainHighlights CBRE in Brazil CBRE started operations in 1979; 380 employees (May, 2011); Offices in SP and RJ; Nationwide operation. 703,000 Sqm of leased office space; 375,000 Sqm of commercialized office in sale transactions; 336,000 Sqmin transactions involving land acquisition for logistic/industrial purpose; 150,000 Sqmof leased industrial or logistic properties; 1.1 MM Sqmin property management; 997,000 MM Sqm(GLA) of appraised malls; 1.9 MM Sqmregarding feasibility/development studies; 2010 Performance - Highlights