Green Street



Specialist Brings International Lessons to the FII Market

According to GRIHub,

The market for real estate investment funds (FIIs) in Brazil has been evolving intensely in recent years, but there are still important steps to be taken to consolidate it. Nothing better, therefore, than extracting and applying practical learning from countries where this segment – known as Real Estate Investment Trusts, or simply Reits – is already fully established, as is the case of the United States.

"The most important lesson is that Reit capital is global", says Jim Sullivan. "Overall, creating a Reit vehicle that is easy for investors to understand, and which attracts the interest of institutional investors from Europe, North America, Asia, Europe and Australia, is a way to ensure that the FII and Reit markets expand in an exciting way", he adds.


What is the potential of the FIIs/Reit market in Brazil, in particular, and in Latin America as a whole in the short, medium and long term?
The publicly listed real estate market has a future in Latin America that could be very exciting.  But that potential will require Reits and Reit-like vehicles to be structured the right way. Alignment of interests, transparency, tax efficiency, and long-term vision are all important ingredients to creating a successful market.  Real estate players who want to simply use the public market as a means of taking advantage of investors will surely fail, and those missteps will create high hurdles that subsequent companies will need to overcome. Economic growth will spur development, which will generate a growing appetite for real estate capital in Brazil and across Latin America.  Well-structured Reits should attract more than their fair share of attractively priced capital.

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