Barzel Properties Signs Billion-Dollar Contract with Carrefour

Barzel Properties, a real estate investment management firm, recently announced a major deal with Carrefour for the acquisition of 4 Distribution Centers and 5 stores. The billion-dollar contract, valued at R$1.2 billion, follows a common trend in the commercial real estate market known as Sale and Leaseback.

Under the terms of the agreement, Barzel Properties secured a 20-year lease contract, renewable for an additional five years, ensuring a stable long-term revenue stream through an annual rental income of R$10 million, adjusted for inflation.

In an interview with REsource, Cassiano Jardim, Director of Investments at Barzel, discussed the company's recent acquisition and its prospects. "The structuring process was quite challenging, but we managed to make it happen within 45 days, including the approval from CADE. This agility and available capital were essential for the success of the agreement. In the end, we acquired a total value of R$1.218 billion and secured atypical 20-year contracts with Atacadão S.A. (a subsidiary of Carrefour)", he said.

The acquired assets include 4 Distribution Centers located in Osasco (SP), Salvador (BA), Jaboatão dos Guararapes (PE), and Jacareí (SP), covering a total built-up area of over 380,000 square meters. The Osasco Distribution Center, Carrefour's largest, is considered a key asset due to its strategic location near the Anhanguera Highway. The five stores are situated in the municipalities of Jacareí, Guarulhos, Jandira, Santo André in São Paulo state, and one in Pinhais, Paraná.

"These acquisitions were made at a very opportune time when we were able to align a series of factors that are quite rare to find in a single deal. We have a top-tier tenant, a long-term atypical contract (20 years), assets in excellent locations, and a very appropriate entry cap rate. Our perspective is to wait for the REITs market recovery, which has already begun, and gain momentum when the interest rate cutting cycle begins. This will lead to the migration of investors, currently in fixed income (post-fixed in CDI), to real estate investment funds", said Mr. Jardim.

These acquisitions directly impact Barzel's Real Estate Investment Trusts (REITs), namely the Barzel Log Fundo de Investimento Imobiliário and Barzel Retail II Fundo de Investimento Imobiliário. "The funds were exclusively created for this kind of deal. Our goal, reflected in the construction of our entire portfolio, is to maintain the highest quality of assets under our management. After all, we are a real estate company transitioning into fund management, not a fund management company venturing into real estate. We believe this is the recipe for long-term success in the REIT market", added Cassiano.

In June, Barzel made headlines on this portal regarding an industrial property development in Ribeirão das Neves (MG) and the industrial market in the region. Read the full report here.

Do you know what Sale and Leaseback is?

Sale and Leaseback is a financial transaction where a company sells a real estate asset, such as a property or building, to another company or investor and then leases back the same asset for a specified period of time.

In this type of operation, the selling company becomes a tenant of the property, paying rent regularly to the new owner. This allows the company to release the capital invested in the real estate asset and obtain immediate financial resources for other purposes, such as business expansion, technology investments, or debt reduction.

SLB offers benefits for both the selling company and the buying investor. The selling company gains working capital, retains the use of the property, and continues to operate in the same location, while the investor acquires a real estate asset with a stable and predictable income stream through the lease.

This transaction is commonly used by companies that have significant real estate assets but require financial liquidity for other purposes. It is also a strategy adopted by companies during times of crisis or financial restructuring, enabling them to release capital without interrupting their operations.

Want to read more interviews with commercial real estate market players? Keep following SiiLA on social media and send us your topic suggestions! Write to comunicacao@siila.com.br.