Affordable housing schemes in Brazil see double profit for developer
Date added: 13th August, 2010 at 14:00
(view all articles from August, 2010)
Categories: Property News, Social and Affordable Housing in Brazil
Investment in affordable housing schemes in Brazil has helped property developer Rossi Residencial more than double its net income in the space of 12 months.
The firm reported earnings of R$109 million (£39.4 million) in the second quarter of 2010 - a 114 per cent increase on the figures recorded at the same point last year.
Chief executive officer of the residential real estate company Heitor Cantergiani said the business had continued to invest in large-scale low-income housing projects. The standardisation of the schemes was a great benefit to the developer as it meant costs could be reduced and operations completed more quickly.
As many as 19 of the 28 projects Rossi Residencial began to build in the second quarter of the year were in the affordable home market and these developments accounted for 50 per cent of the potential sales value (PSV) of all launches between April and June, he added.
The amount of individuals low-income homes launched during that period was 4,711 units with a PSV of R$575 million.
Mr Cantergiani executive cited the "favourable economic scenario in Brazil" as one of the drivers of growth for the company, noting a high level of demand for real estate.
Currently, the firm operates in 78 cities within 15 states, the executive continued, but through joint ventures and partnerships it is planning to expand to other urban areas such as Salvador and Belo Horizonte.
Sales were up dramatically to the highest level the company has ever seen at R$905 million in the second quarter of 2010 - a yearly increase of 79 per cent.
Meanwhile, earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 77 per cent compared with the same period last year, with a margin of 24.5 per cent.
Elsewhere, Rossi Residencial's rival Gafisa reported that it had benefited from the affordable housing scheme Minha Casa, Minha Vida (My House, My Life).
The firm reported it won contracts for 6,239 houses as part of the programme in the second quarter of 2010 and 9,027 in the first six months of the year.
It said its relationship with key mortgage lender for the programme Caixa Economica Federal had a part to play in it being awarded the work.
The total worth of construction projects launched by Gafisa between April and June was R$1 billion - a 61 per cent yearly rise.
Meanwhile, revenues jumped 31 per cent over 12 months to reach R$927 million and adjusted EBITDA leapt from R$111 in the second quarter of 2009 to R$184 million at the same point this year.
For anyone wishing to invest in the full potential of Brazil’s affordable housing market, Property Bond Brazil work closely with local developers to develop affordable housing projects. Due to the demand in this sector, developers are currently looking for new investors to work with them to aid expansion plans. If you are interested in Investing in an affordable housing project, contact Property Bond Brazil. 
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