Arbitration in the real estate market

As in any market that is organised in time, conditions of inefficiency create opportunities for arbitration. In real estate funds, such a maximum is no different.

In the pandemic, the Fii market went through changes. First, the prices of many of them fell, reflecting challenges imposed by the scenario: closed malls, Empty offices with the massive adoption of the Home Office. The drastic deterioration of the macroeconomic and political strategies caused the fall in actual asset prices; However, the real estate market has adjusted to the new reality. The population learned to make orders online, driving, for example, the boom of the logistic sheds for e-commerce; With more time at home, the residential space took a new sense and value in our day-to-day life.

New investment theses have emerged in Real Estate Investment Funds (REITs), previously little explored and known, such as Urban Income, Residential for Income, Agro Logistics, and Logistic Development. The sector has seen a 140% increase in investors in two years, with over 1.5 million individual taxpayer numbers (CPF) by the end of 2021. The volume of offerings has also grown significantly, totaling approximately R$ 100 billion in new issuances in the 2020/2021 biennium. Daily trading in the secondary market has increased from R$ 130 million in 2019 to R$ 269 million in 2022.

Despite these indicators, discounted real estate portfolios can be observed based on the prices of shares on B3 (Brazilian Stock Exchange). The majority of these discounts are seen in brick-and-mortar assets, with an average of 14% below the net asset value (NAV) of the REITs that make up the Ifix (Real Estate Investment Fund Index).

Read the full story (in Portuguese).

Source: Valor Econômico