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Property in Fortaleza is profitable and low-risk, says real estate investor

Date added: 30th April, 2010 at 10:45
(view all articles from April, 2010)

Categories: Property News

Property in Fortaleza in North East Brazil is a shrewd investment, according to real estate investor and executive director of Pathfinder Ronan McMahon.

Fortaleza is the capital of the state of Caera in North East Brazil. The city has a population of three million and is growing rapidly due to the proximity of offshore oil, new industrial construction and a booming tourism industry.

Less affluent than the major cities of South Brazil, Fortaleza can offer real estate at a lower price and with the potential to produce high yields.

It can cost as little as $1,000 (£652) to invest in commercial property in Fortaleza if you get in on pre-construction deals and with strong capital appreciation you can expect yields of ten per cent and over.

Brazil's economy is the largest in Latin America and is growing quickly. In 2010, the country's huge Tupi oil field will commence operations, transforming it into an energy-independent nation and an international energy player.

It is also one of the world's largest food producers with a strong manufacturing sector also expected to grow. Brazilian food production is set to gain from the cultivation of cast plains in the state of Bahia which will increase agricultural capacity.

This year, the country is expected to see a rise in foreign investment of 74 per cent, up to $45 billion.
"You should have exposure to Brazil in your portfolio ... With real estate, you retain control and flexibility. Plus, I see a stronger upside - rental yields will throw off more income than stocks," McMahon commented.
With the economy expanding fast, Brazil is becoming more middle-classed and its people are becoming consumers. Car sales were up $20.3 million on March 2009 last month and credit is continuing to open up, allowing even more spending.

More disposable income also means more holidays for the Brazilian people, which is great news for Fortaleza as it is the most popular domestic tourist destination. Tourism is already seeing an expansion with 9.8 billion reais being spent to improve infrastructure and tourism amenities in the lead up to the 2014 World Cup.

With Fortaleza on course to profit from Brazil's economic boom, businesses are eager to set up shop there. However, office space is in short supply so new developments are ripe for investment.

McMahon warns that office space needs to be in the right location to see good yields so you should make sure you buy from a developer with a strong track record.

Other than that, he enthuses that buying office space in Fortaleza is hassle-free and low-risk. You can negotiate lease-agreements of as long as five years and any problems or expenses relating to the property are paid for by the tenant.ADNFCR-1477-ID-19752347-ADNFCR

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