Falling BRL, is it good news for international property investors?

Despite the slow-down in Brazilian economy, on the upside of this story is arising the opportunity to buy Brazilian real estate at lower prices. Property prices across the country have become substantially cheaper for overseas investors in real terms simply thanks to a depreciated exchange rate in Brazil.

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Source: Economist Intelligence Unit March 2015

The US dollar is currently at its highest point in the last 10 years against the Brazilian real and it has depreciated against other foreign currencies including the Singaporean dollar too. The exchange rate against the Singaporean dollar is currently 2.25 BRL/SGD is, whilst in 2011 it stood at 1.2 BRL/SGD.

So does this fall in the real present opportunity for overseas investors including those from the US, Middle East and Asia, to buy into the Brazilian property market at cheaper prices?

In short, yes! If the due diligence process (both legal and property) is done thoroughly, more overseas property investors can take advantage of the current favourable exchange rate and yield some optimistic medium and long-term returns, once the economy recovers and the Brazilian real starts appreciating once again.

Consider Natal, the ‘City of Sun’ with 3,000 hours of sunshine per annum and an average 27 degrees Celsius. This vibrant and relatively large city of around 900,000 residents is situated on one of the most beautiful coastlines in North East Brazil.

Natal is famous for its natural beauty, offering many tourist attractions including crystalline waters of Maracajaú (in proximity of Natal), and the largest cashew tree in the world. Natal is particularly known as the City of the Dunes, famous for its buggy rides alongside miles of unspoiled beaches and sand-dunes.

The most famous beaches in Natal include Ponta Negra, Pipa and Genipabu. The city is also known for its off-season carnival, the Carnatal, and for its historical monuments and buildings, such as the Forte dos Reis Magos, the Alberto Maranhão Theatre and Newton Navarro Bridge. The city also boasts the second largest urban park in Brazil, the Parque das Dunas. All of this makes Natal a highly beautiful and attractive holiday destination for both domestic and international tourists alike, as well as a very attractive property investment proposition.

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In terms of location, Natal is strategically located as the Brazilian city closest to Africa and Europe. The Greater Natal International Airport, São Gonçalo do Amarante, which opened in 2014, connects Natal to many Brazilian cities as well as operating a number of international flights.

Opportunities for overseas investors to buy real estate are available from Ritz-G5 Group, an award-winning Brazilian developer that offers a variety of residential and commercial real estate projects in Natal.

One of the Group’s most recent property investment opportunities is the Piramide Hotel Natal. Piramide Hotel is a 315 bedroom beachfront hotel with conferencing facilities situated in Natal’s exclusive hotel area known as ‘VIA COSTEIRA’. The hotel, in its prime, was considered the best hotel in Natal due to its unrivalled location and facilities. Spotting the opportunity to restore this hotel to its former glory, Ritz-G5 purchased this property asset last summer, and now refurbishment works are under way. Once completed, the hotel will be handed over to ACCOR – one of the largest hotel chains in the world, to administer over the next 20 years under their ‘GRAND MERCURE’ brand.

For more information on Ritz-G5 or investing in the Piramide Hotel Natal, contact the team on +44 207 183 7565 or visit www.ritzproperty.com.

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