Vitacon intensifies negotiations with America private equity funds for investments in real estate in Brazil

Jul 02, 2015, 10:00 ET from Vitacon

SAO PAULO, July 2, 2015 /PRNewswire/ -- Vitacon, one of Brazil's leading real estate developers and construction companies, is intensifying negotiations with American investors who want to make the most of a good moment for investing in Brazil. For those who have confidence in the country over the medium- and long-term, the temporary contraction of the economy provides an opportunity to make excellent deals. 

Led by CEO Alexandre Lafer Frankel, Vitacon has structured a platform to team up with private equity funds or strategic partners. "The devaluation of the real against the dollar is making real estate investments extremely attractive. This is an excellent time to get into the market and capture the next cycle of interest rate hikes," he explains.   

According to Frankel, the real estate developments subject to negotiation with American funds are concentrated in neighborhoods such as Itaim Bibi, Jardins and Vila Olimpia. For differentials, they have a privileged location, a high rate of demand for corporate rentals and strong liquidity. 

"We're looking for average annualized income of 17%. This rate is much higher than that obtained in the U.S. or Europe.  Since it's natural that Brazilian interest rates will return to lower levels, we will manage to obtain very good returns with the compression of CAP rates to between 6% and 10% per year."

Even though it is privately held, Vitacon has adopted the highest standards of governance and auditing. At present, the company is audited by PWC. "We've opted for the path of total transparency.  We've managed to access the same mechanisms as public companies, without having the same obligations and costs as a public company. This is the result of a lot of effort, and recognition that Vitacon has acquired financial institutions," Frankel affirms.

Growth in 2014

Vitacon has launched a total of R$ 450 million in developments. While still in 2014, the company had an increase in net revenues that rose to R$ 210 million. "This year, we have already launched two projects with a General Sales Value adding up to R$ 120 million," Frankel explains. "We've got the potential to launch R$1 Billion. That will depend on the resilience of the market."

Also according to him, for the second half of the year, the company's schedule of meetings with foreign investors will be intense. "We've planned visits to the United States, and we will also be receiving investors in Brazil," notes the CEO.

In addition to its platform of residential properties, the company is developing two hotels and a large-scale project in partnership with a local bank. In both cases Vitacon is looking for investors and engaging in discussions with companies from Europe and the Middle East.
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SOURCE Vitacon