Beyond Selic: real estate needs its own benchmarks

Every investment is affected by the Selic rate, but the benchmark rate alone does not tell the full story of every asset class. Although this is an introductory concept in the world of investment funds, it is still common to see different parameters being used as benchmarks in Brazilian real estate. As the sector advances, assessment tools are also evolving to reflect its complexity with greater precision.

While FIIs, or real estate investment funds, generate income according to the operational performance of the asset, receivables-based investment vehicles, such as FIDCs, are fundamentally structured around lending. As a result, the real estate market is influenced by the performance of the underlying asset, while the receivables market is directly affected by benchmark interest rates.

The premises behind these two types of investment are entirely different. Even so, they are often compared using the same principles, without any specific distinction. This practice hinders the macroeconomic reading of the markets, according to Professor Dr. João da Rocha Lima Junior, coordinator of the Real Estate Center at EPUSP.

“These are very different products. They cannot be compared, because the origin of their income is completely different. And it is important to remember the following: real estate receivables funds are not real estate market funds,” he explained.

To ensure that analyses are complete, benchmarking tools such as the IFIX are essential. However, it is necessary to look beyond dividends and real estate fund quotas: analysts must examine the statistics of the assets themselves and interpret what they reveal about the market.

“The IFIX only tells the story of changes in the value of quotas; it has nothing to do with the real estate market. To assess the market, you need to measure market variables: prices, rents and occupancy rates,” the professor noted.

Today, the market already has tools that support these assessments, such as the SBI, or SiiLA Brasil Index, developed through a comprehensive evaluation based on each asset’s income and investment returns. While traditional indicators measure market sentiment, this analysis is grounded in less volatile aspects, related much more to the asset than to the fund to which it is linked.

The logic works in the opposite direction: while the IFIX measures how external economic factors affect real estate funds, the SBI evaluates the metrics of the assets themselves, analyzing their impact in real time.