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12,5% fixed annual return
PROJECT DURATION
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In general we aim for projects with a total maturity period of about 2 to 3 years.
Time frames vary from project to project, however, we can presume certain constants. From the moment of the actual land purchase until the initiation of the construction works we compute a period of 9 months. During this period several studies (topography, groundwork and architecture) are executed. Furthermore, it can take several months for a project study to get approved by the local Brazilian authorities.
The actual construction works may take up to 1 to 2 years depending on the size and type of the construction. As demand for social housing in Brazil is extremely high, the project's commercialization is started, and often terminated, during the construction period.
ANNUAL RETURNS
We offer a fixed annual yield of 12,5% IRR and are only too aware that double digit returns can make Western investors wary. However, make no mistake; interest rates in Brazil are still among the highest in the world. Double digit annual returns are therefore very common in an emerging market like Brazil.
PARTICIPATION
Depending on the investor's preference and the size of the initial investment we offer the possibility to either participate in an existent project, or to develop a new project particularly for one individual investor (or group of investors).
For each project a separate Brazilian Limited Liability Partnership (LLP) is structered, ensuring tax and liabilty advantages for the participants. Investors can either directly buy shares of the Brazilian LLP or participate through a foreign entity that in turn becomes a foreign shareholder of the Brazilian LLP. The choice here depends largely on the personal and fiscal preferences of the investor
(or group of investors).
Profits are disbursed by form of dividend payments which are tax-exempt in Brazil, also when disbursed abroad.
- 12,5% fixed annual return
- separate project entities
- clear and open accountancy
- 2 to 3 year project maturity
Keeping it safe & simple!
RENE SCHILDER
Customes & VAT lawyer
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"Considering the crisis in Europe, spreading risk and diversifying my investment portfolio is one of my main investment strategies. It has become very difficult to make reasonable and steady yields in Europe. I realized I had to start looking overseas."
SIMON KLAPWIJK
Property developer
"As a developer, Brazil attracts me. With a population of 200 million people it has a large domestic market, making it relatively independent from external forces. Considering the rising middle class, I truly believe that the demand for social housing will continue to grow in the coming years.
TONCO ARONDEUS
Financial & tax advisor
"I was thinking about investing in a rising market like Brazil for a longer time already.
Orbis Property provided the right combination of a solid structure together with profound local knowledge and experience."
Brazil considered more secure to invest in property
Orbis
in the Dutch
Financial
Daily
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Brazil Rated 2nd Most Attractive International Property Destination for 2012
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January 2nd, 2012 by Ruban Selvanayagam
www.brazilinvestmentguide.com
A survey of members of the Association of Foreign Investors in Real Estate (AFIRE) has placed the Brazilian real estate market in second place in terms of attractiveness in 2012 above China and all countries within Europe. São Paulo was also indicated as the fourth most attractive metropolitan region (after New York, London and Washington) moving up from 26th position in 2011.
The investors surveyed are stated to have a collective global portfolio value of US$ 874 billion. Pointing to factors such as the impending sporting events, improving legal guarantees and strong economic performance, CEO of AFIRE James Fetgatter commented: Brazil has now become considered as a more secure region to invest in property, whilst also being able to achieve a solid appreciation of capital.
The research showed that low property prices were seen as a major factor that looks set to keep 42 percent of those surveyed searching for opportunities in the USA. 18.6 percent of AFIRE members believe that Brazil is offering the best global prospects in 2012 a growth of 14.2 percent on the year.
28-04-2010
24-12-2010
Why social housing and what are the risks?
WHY BRAZIL?
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Prior to the financial crises the country was already rapidly developing an increasing attraction on foreign investors looking for greener pastures for their investments. But even now that the financial crisis has shaken many other countries, Brazil remains surprisingly stable in its appeal to the economic world. Some reasons why an investment in Brazil is a lucrative and stable investment:
Positive growth estimates
As one of the BRIC countries, Brazil has become one of the world's most impressive economic success stories. Brazil is now a net creditor nation and has in recent years experienced sustained growth, strong exports, healthy external accounts, moderate inflation, decreasing unemployment, and reductions in the debt-to-GDP ratio over the last several years.
A conservative financial system
Brazil has a conservative financial system, which has shielded it from the devastating effects of toxic mortgages. Mortgage loans represent a mere 5% of Brazils GDP, compared to 69% in the US. On 17th November 2011, Standard & Poors announced that it had upgraded Brazils sovereign rating from BBB- to BBB.
WHY SOCIAL HOUSING?
The social housing market in Brazil offers huge opportunities for national and international investors, developers and construction companies. Some reasons why investment in the social housing is a lucrative and stable investment:
Fast growing middle class
Brazil's economic success means that its population is becoming increasingly prosperous. In the last years more than 50 million Brazilians escaped from poverty and emerged into the middle class, which nowadays represents almost 50% of the population and with consumer spending at record levels.
Government support
The Minha Casa, Minha vida (my home, my life) program is a project of the federal government, in partnership with the federal states, municipal districts and companies to construct one million new homes for the Brazilian population by the end of 2016. The support consists of government financing of construction companies and low interest mortgage plans for the lower (middle) income groups for a value of 100% of their house. It is for the first time in Brazilian history that this significant part of the population has access to a personal mortgage plan and thus to a private home.To qualify for assistance, households must earn no more than 10 times the minimum monthly wage (around BRL510). Read more
Enormous housing deficit
Why Brazil needs so many new homes is because of the fast growing population and the current housing shortage of 8 million, due to inadequate housing and cohabitation and the substitution of many houses of the current housing stock.
There are even waiting lists!
WHAT ARE THE COUNTRY RISKS?
Country risk refers to the risk which dependents on changes in the business environment that may negatively affect operating profits or the value of assets in
a specific country.
Economic risk
Brazil has shown very stable and sustainable growth over the last 5 years and is expected to continue to do so. With the World Soccer games and Olympics ahead
we expect the Brazilian economy to live up to its expectations and maintain a steady growth rate for the coming years.
Exchange rate risk
Brazil's currency is the Real. In terms of market value the Brazilian Real proved to be one of the strongest currencies during the past few years. This is mainly due to the success story of the Brazilian economy. A high Real value is however not desirable for the country as it negatively effects its exports. The Brazilian government is therefore very focused on stabilizing their currencys value.
Political risk
The present government, run by Lula's successor President Dilma Rousseff has proven to maintain the pillars of economic policy during the first period of this presidential term, while pursuing more vigorous economic growth. Although structural reform progress is slow, Brazil's institutions are now stronger than they were before and are less likely to suffer from political setbacks. Brazil's attractiveness to investors relative to other major emerging-market destinations such as India or Russia also partly stems from its adherence to the principles of protection of property rights and free trade. As a result, the country now appears poised to regain its status as the largest recipient of FDI among emerging-market economies after China.
Cultural risk
The cultural distance between the home country and Brazil may contribute to explaining the possible adversity of foreign investors. Contrary to many other emerging markets (Russia, China, India, etc.) culture differences between Brazil and the West are surprisingly small. The domestic language is Portuguese and their primary religion is Catholicism.
CAN I GET MY MONEY OUT OF THE COUNTRY?
Yes you can! Capital that has entered Brazil the correct way, i.e. through the Central Bank, can always be repatriated to the country of origin.
O
HOW ARE THE UNITS SOLD?
We have partnerships with several local real estate brokers, all of which specialize in this type of social housing. They have an extensive client base, handle all inquiries and marketing, and are responsible for the sales process. Site visits are scheduled in accordance with the local licensee.
WHO ARE THE COMPETITORS AND HOW DO YOU COMPETE?
There are plenty of small, midsized and large constructors and developers active in all regions of Brazil. We consider us to be a small to midsized developer and compete with local architects, developers, small constructors and real estate agents who all want a piece of the pie. However, these smaller operators usually have limited financial resources and costly infrastructures. The fact that we are able to attract foreign investments and manage and develop our projects within our own organization, gives us a considerable edge over the local competition.
WHO FINANCES THE HOME PURCHASE?
Home financing is provided by the federal bank Caixa Econômica, which is part of the Minha Casa Minha Vida (My House My Life) program. This is a project of the federal government with the goal to construct one million new homes for the Brazilian population by the end of 2016. As the program is mainly directed to the low-income population, the credit is provided with a fixed interest rate as low as 5% p.a.
As a reference, the current interest rate for housing financing in the open market goes from 7.98% to 13.11% in major Brazilian banks. Read more
Moreover, Orbis only charges a very modest monthly management fee plus a small percentage share (depending on the project size) of the final return, allowing us to disburse very attractive returns to our investors.
If you would like to know more about our projects, how it works and how you could participate, feel free to contact us.
Rua Alexandre Câmara 1857 Tel. Nl: +31 85 785 2269
Capim Macio, Caixa Postal Nº02 Tel. Br: +55 11 3042 0859
Cep. 59082-200, Natal, RN, Brasil Email: info_orbisproperty.com
Copyright © 2009 Orbis Property Ltda.
