*CRI = Certificate-of-the Receivable real Estate
The sentence above comes from a taunt that you want to do this to you, the investor. We believe that it is a way of being exposed to the real estate market in a safe and efficient manner, is to combine investments, real brick-and-paper/CRI (fixed income) – investment options with different, but complementary, as this is essential, especially in a country as unstable as the country of Brazil.
As a company that specializes in Real Estate, we tried to use all our know-how in the sector in order to identify a good business, finance, real estate, using a variety of structures and vehicles of investment. In this way, we close with the traditional “brick”, directly or via a real Estate Fund (Sief), both in Brazil and abroad (for instance, with a focus on NYC, and also the operations of the debt with real estate collateral (Irb).
This look is absolutely not common in the united states and Europe, but it is still very present in Brazil. Fortunately, many managers are skilled have been creating the best and new investment opportunities to the general public.
When you stop to think about it, that about 30% of the world's wealth is allocated to the real estate industry, we bring forth a reflection of you. How much of your portfolio is invested in this industry?
The investment made in the sector of real estate (the brick) and has four major benefits: (i) income, (ii) adding value (the appreciation of capital; (iii) to protect against inflation; and (iv) the diversification. Out of all of the benefits of investing in the real estate market is the income that is the most obvious one and the is representative. It is the result of the final between the income derived from the exploitation of the assets, less all costs incurred by it (for example, the management of the property, interest on loans and taxes.
In the following, we'll put up the win for the valuation of the assets. For a practical example, which depicts the point is to focus of your wallet in the segment of the slab business in São Paulo, which was launched at the time of a vacancy in the highest, and the asset traded at below replacement cost. The (expectation of) the economic recovery, the increasing demand for leased space on the regions of the “premium” in the capital, such as DURING the Faria Lima avenue and the broadway theater district, along with the short supply shall result in the assessment of the price of a property in the next few years, giving a gain to those who have invested in such assets, on the most favorable.
Of course, these two aspects of income and the high is significantly affected in times of crisis. Between 2014 and 2016, the years of the recession, the price of the rent, have been falling, and the vacancy rate has been increased, thus reducing the amount of income and, also, the value of the assets. It was a combination of high inventory space for lease and is in demand down – businesses have shut down, reduced in size and lost revenue.
Practical examples are the assets of the Thera-Corporate (THRA11), and the Building Would File FVBI11), which have seen their rents are falling to 40-50% during the crisis is having a negative impact on the value of the shares of the Sief. At the time, this move generated a good window of opportunity for the investor. Investors who purchased and/or the securing of these assets have a strong added value. Both the asset-trade today to its high historical and prospective earnings of the front.
The third major benefit of investing in real estate is to protect against inflation, because of the indexing of the value of the leases, at rates adjusted for inflation. So, during the term of the contract, the lease, when inflation rises, the income from the rent is fixed in nominal terms, while protecting the real return of an investor.
The last major benefit of a real estate investment portfolio is diversification. Historically, the performance of the real estate property that is not highly correlated with other types of investments, such as stocks and currencies. To add an asset to the real estate tends to result in a lower risk of the portfolio relative to the expected return.
Not only that, but there is also the possibility for the investor to be exposed indirectly to the real estate market via “the paper”. This is a less risky option than the “brick”; and, in spite of the differences in the structure and the risks it has to the real estate as collateral (collateral) – derived from the end. The Sief is “the paper”, for example, the most well-known for investing in the Certificates and other securities, as the LCIs, Presents, and ON, they have characteristics that are very similar to those of fixed income securities, such as treasury bills, however, with a little bit more of a risk.
All of them are fixed-income securities, with the establishment of fees at the time of issue, the timing of the payment of interest and amortization). What are the main risks of credit and pre-paid. This is a good strategy to increase the return from fixed income instruments as well as to diversify its portfolio, with exposure to fixed income securities with a similar return to the fund, multi-market, and lower risk.
In times of uncertainty, when there is a correction in the prices of the assets (read: stocks, Sief “the brick”, a currency exchange facility, etc.) the Sief “paper” to sail on the stability and the low-volatidade. Historically, they are trading close to book value, even in times of stress out of the market. It also is a great protection for you and your family on the “brick” is sobrevalorizadado, as in the years of 2012-2013.
In a nutshell, the investor has to look, and you have the correct reading of the market cycle. In an environment of economic growth, the Sief is the “brick” is a very good opportunity as the Sief “paper” to reduce the risk of the portfolio, but with a performance, hot rod”.
We are dreaming of the day when we will see the platforms and investment professionals in the industry to classify Funds as an investment the “brick” inside the asset class, “real ESTATE and real Estate Funds from the “paper” of the class of “FIXED INCOME”. It would be a big step for a correct orientation and is responsible for investor relations.
