The real estate fund market resumed raising new resources in 2023 and FIIs wasted no time in investing the capital obtained in new offers. Throughout the year, portfolios have already disbursed almost R$8 billion to purchase properties.
In recent years, real estate funds have lost their attractiveness and value on the Stock Exchange due to the restrictions imposed by the Covid-19 pandemic and the cycle of rising Selic rates, which rose from 2% to 13.75% in 18 months – a movement that favored fixed income investments.
In this way, the scenario of devalued shares made it impossible to carry out new issuances of real estate funds. This is because the value of new shares is normally set above the fund’s asset value.
With the market recovery in recent months – an increase of more than 15% from April to now – issuances have returned and so have FII investments, especially those made by “brick” funds, which invest directly in real estate.
Transactions already total more than R$7.8 billion in 2023. Among the highlights is the one carried out by CSHG Logística (HGLG11), which purchased the portfolio of the real estate fund GTIS Brazil Logistics (GTLG11) for R$1.373 billion. Check out the ten biggest deals of the year.
Source: relevant facts
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Manager acquired properties to create an office fund
(**) unlisted fund
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How new acquisitions affect FII operations
In general, Marcos Baroni, head of real estate funds at Suno Research, gives a positive assessment of real estate fund acquisitions in 2023. He considers that not every asset purchased will please the investor, but this type of business is still part of the construction portfolio. [super oportunidades]“A fund will always buy one or two excellent assets, two or three good ones, one or two more reasonable ones and one asset that is not so pleasing”, he explains. “It is unlikely that the FII will buy the five ‘trophy’ properties
but this is part of the portfolio construction process”, assesses Professor Baroni.
He also says that investors tend to have a short-term view of fund negotiations, only evaluating the immediate impact of the new asset. However, the Suno analyst suggests paying attention to the potential of the acquisition over time.
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Baroni also notes that the investment made by FIIs in 2023 demonstrates that the funds are more relevant and significant from the point of view of greater participation in the property purchase and sale market.
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Leveraging FIIs is a point of attention
Amid the movement of new acquisitions, the market is also observing possible risks with the possible leverage (debt) of real estate funds.[A falta desta análise] “When the first leverages began, many investors did not differentiate between leveraged and non-leveraged funds”, recalls Daniel Viana, managing partner of real estate investments at Inter Asset. “
it generated pricing distortions and allowed the growth of leveraged funds”, he adds.
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In Viana’s opinion, most investors are now more aware of this issue, which is now one of the items that make up the current management reports of funds and analysis houses. But the point should not be ignored, he reinforces.
“There are leverages that are healthy and can make sense in the fund’s medium and long term”, he points out. “It is important to understand both the costs of leverage and the anticipated manner of repayment or deleveraging,” he suggests.
Given the prospect of falling interest rates both in Brazil and abroad, Viana projects an even greater number of issuances of new FII shares in 2024 – which could keep the property purchase movement heated.
FIIs raised more than R$21 billion in 2023
The Securities and Exchange Commission (CVM) registered 203 real estate fund issues throughout the year. If all of them raised the target amount, the market would receive more than R$37 billion in new resources.
Considering only the 102 closed offers, the volume raised reaches R$21.7 billion, according to CVM data. In 2022, this number was just above R$20 billion.
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Responsible for the largest transaction of 2023, CSHG Logística (HGLG11) also owns, so far, the largest issuance of the year: R$1.9 billion – including the fees charged in the offer.
Source: B3
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The article is in Portuguese
Tags: FIIs purchased billion properties check ten biggest transactions
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