Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}

Multifamily Properties: Find out more about this trend

Guilherme Regal • 5/4/2022

The year 2021 saw a very strong recovery in global real estate markets, with record investment volumes driven by high liquidity, solid economic growth and a low interest rate environment. One of the sectors that stood out was the multifamily sector, which benefited from the growing demand from investors.

Learn more about the concept of multifamily properties and how the scenario for investors in Brazil is going.


What is a multifamily property?

Multifamily are properties with several residential units (apartments or houses) belonging to a single owner, in this case a company. Unlike the usual, where each residential unit is acquired by different owners and rented out to residents, a multifamily property belongs to a single owner, which makes it a commercial property.

The operation of a multifamily property is usually much more organized and professional, with complete infrastructure and availability of services, which usually include furniture, utensils, bed and bath items, cleaning, laundry, internet entertainment package, streamers and others. 

Change in housing profile

Recent times have changed the way people see their own home, causing many to look for homes that are more suited to their needs.
The Housing in the World Post Pandemic Project pointed out three housing trends that were driven by Covid-19 with a forecast for 5 or 10 years, and multifamily properties are part of them. This trend gives rise to projects aimed at specific residents, such as small families, young couples, singles and others.

The multifamily market in Brazil

As the largest asset class in terms of commercial real estate investment in the US and other developed markets, and also the most resilient during economic downturns, the multifamily is gaining traction in the Brazilian real estate sector.
Initially, through some service-focused startups, now properties companies and real estate investment funds (FIIs) are increasing their multifamily investments in Brazil. At the end of 2021, the FIIs had around BRL 650 million under management, and properties companies are developing more than 10,000 units.

About 20% of Brazilian families live in rented apartments, representing more than 13 million households, of which 1 million are in São Paulo alone. There is therefore a huge market opportunity to institutionalize the sector that has traditionally been family-to-family.

Advantages of investing in multifamily properties:

• More resilient during economic downturns
• Growth investment profile in the Brazilian real estate sector
• Benefits from the reallocation of more cyclical sectors

Challenges

Currently, one of the main obstacles to accelerating the development of the sector is the recent increases in interest rates by the Central Bank, which after having progressively decreased in the last 3-4 years are now back to 11.75% to slow down inflation.
Guilherme Regal, Head of Capital Markets at Cushman & Wakefield, explains that the financing of this sector still needs to develop, as the legal environment for real estate credit is still more focused on loans to individuals, and corporate debt for development is more expensive, which means the market is built primarily on equity versus debt.

''As interest rates fall and additional funding through FIIs and other players increases in the coming years, there is no doubt that the multifamily will have some bright years ahead in the Brazilian real estate market, especially as it benefits from the relocation. of more cyclical sectors'', he says.

Featured Insights

Sao Paulo Skyline
MarketBeat • Insights

Brazil MarketBeats

Cushman & Wakefield MarketBeat reports analyze quarterly economic and commercial real estate activity including supply, demand and pricing trends at the market and submarket levels.
Luis Fernando Gardel Deak • 4/15/2022
Gilead
Gilead • Insights
A equipe da C&W teve de responder à complexidade dos projetos, envolvendo padrões legais de operação bastante específicos.
Learn More
Philips Lagoas
Philips Workplace Innovation • Insights
Philips believes a good working environment should provide comfort, practicability and freedom, so as to render its employees more creative and efficient. So, in 2009, the Philips Workplace Innovation (WPI) program was created, to turn the company into a better place to work in.
Learn More

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS