Gazit-Globe Makes Second Brazil Buy for $38M Retail Center Development
- May 27, 2008
Gazit Brasil, a subsidiary of Gazit-Globe, Israel’s largest publicly traded real estate investment company, said today it had acquired its second property in Brazil, a shopping center under development in Caxias do Sul.The company paid $24 million in cash for the property and said it expected to invest another $14 million to complete the development. Gazit Brasil bought the site from a group comprised of about 300 separate owners. Located within walking distance of the city center, the shopping center will have 16,300 square meters. Leasing is under way and the company said it already has a number of signed letters of intent from tenants. Michael Bar-Haim, Gazit-Globe CEO said in a release today that the number of owners involved in the project had delayed development of the shopping center. He said the company’s experience in building and running shopping centers will be valuable as it gets the development online. It is the second Brazil acquisition for Gazit-Globe since the beginning of the year. In January, the Brazil subsidiary purchased a 14,238-square-meters shopping center in Sao Paulo for $31.3 million in another all-cash transaction. The center is anchored by a Carrefour supermarket and also has room for expansion, the company said at the time of acquisition. Bar-Haim said today that the company would be looking for more opportunities in Brazil.“We still see a healthy pipeline of potential acquisition and development in the country that will further enlarge our portfolio,” he stated.Gazit-Globe is not the only commercial real estate investment company making inroads in Brazil, which has a population of over 180 million people and has the 9th largest economy in the world. A recent report by CB Richard Ellis, How Global is the Business of Retail?, noted that while Brazil is currently low on the list of countries with a large representation of international retailers, it is growing. “In South America, Brazil is the largest and potentially most attractive retail market on the continent, and has also started to see increased penetration of foreign brand retailers. The size and growth potential of the country is likely to encourage many more new entrants over the next decade,” the CB Richard Ellis report stated. Houston-based developer Hines has been active in Brazil since 1998. On Feb. 11, CPN reported noted that Hines and the California Public Employees Retirement System (CalPERS) were expected to create a third fund for investment in Brazilian real estate that could total up to $800 million. Hines has developed more than 11 million square feet of office, industrial and residential space in the country and manages about 9.5 million square feet of space in Brazil. More recently, Accor announced a partnership with one of Brazil’s leading real estate investors to develop 20 hotels in Brazil for a total investment of about $317 million, according to an April 8 CPN article.