Sam Zell to Increase Portfolio in Brazilian Real Estate Market

May 20, 2010

On Monday, we reported about Sam Zell selling off some of his shares in Gafisa S.A., one of Brazil’s largest homebuilders. Speculation that the brilliant investor was growing sluggish with the Brazilian market was apparently off since now comes word that Zell’s Chicago-based Equity International is raising $500 million to invest in other Brazilian real estate firms.

Sam Zell

Last year, Zell called Brazil the “number one country in the world for investments” and seemingly hasn’t changed his stance. The Brazilian economy is rapidly improving, Brazilian builders are a better deal right now than U.S. ones, and the population in Brazil is increasing faster than housing is being built. Sounds like a good investment.

According to Bloomberg reports, at least 1.5 million new households are formed in Brazil each year, but builders are only constructing half that amount of housing. The economy is expected to grow 6.3 percent this year, and since Brazilian President Luiz Inacio Lula da Silva took office in 2003, he has more than doubled the minimum wage.

While Equity International reportedly will put approximately two-thirds of that $500 million in Brazilian real estate, the firm is also investigating other countries in which to invest the rest. Leading candidates include Colombia and China as well as Vietnam, Indonesia and Morocco.

Categories: Economy

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