Brazil’s Billion-Real CEPAC Auction Falls Short of Target, Raising Doubts About Appetite for São Paulo’s Faria Lima

Nunes explained that prices are defined through a supply-and-demand analysis.
“The auction has a direct correlation with supply and demand. An economic study is carried out; we could set the auction at R$ 5, but the press often says, ‘the last one was R$ 17.’ The previous price doesn’t apply—this time it just coincided,” the mayor said.

The bitter taste for Nunes goes beyond limited participation. Less than a week earlier, São Paulo’s Public Prosecutor’s Office (MP-SP) tried to block the issuance of CEPACs, alleging undue enrichment for certificate holders. The court suspended both a free 30% increase in building rights and the retroactive application of the new rules.

Nunes attributed the weak demand to factors such as legal uncertainty triggered by the MP-SP’s action and the current economic climate.
“The result was excellent—it was the largest CEPAC auction in history. Obviously, with 15% interest rates, the government forcing an IOF tax down our throats, later struck down by Congress and adjusted by the Supreme Court, these things have an impact—not only on this auction but in any situation,” Nunes told REsource in a press conference after the event.

The lack of enthusiasm also suggests that Faria Lima is losing some of its appeal for expansion. Once the country’s most coveted and expensive corporate address, the avenue may be ceding priority as São Paulo’s office market begins shifting toward other regions.