In April, BR Properties unveiled its inaugural real estate investment trust (REIT) on the B3 exchange, known as BRPR Corporate Offices (ticker BROF11). The REIT commenced trading with two assets in its portfolio. The REsource team reached out to the company, one of Brazil's largest commercial income property investment firms, to gain further insight into this significant development.

With 16 years of experience in the real estate market, BR Properties has established itself with a focus on office buildings and industrial properties, primarily in the states of São Paulo and Rio de Janeiro. The foray into the REIT segment with BROF11, valued at R$ 1.23 billion (around 246 million dollars) in net asset value, marks a new phase in the company's history.

BR Properties CEO, Martin Jaco, revealed that the desire to manage third-party funds had been under discussion within the company between 2018 and 2019. "We wanted to have specific vehicles with well-defined target audiences, enabling us to create more targeted products for those seeking income from established office spaces. This would allow us to have a leaner company structure", he explained.

However, the plans for REITs at BR Properties were put on hold due to the COVID-19 pandemic, which significantly altered market dynamics, particularly in the office sector. During this time, the company focused on reducing its debt and executed the largest direct asset sale in the commercial real estate market in Brazil. This sale involved the acquisition of 12 corporate buildings by Canadian firm Brookfield, valued at R$ 5.9 billion (close to 1.19 billion dollars), including iconic developments like Parque da Cidade.

"In 2023, our plans came to fruition, and we launched our first REIT focused on established office spaces, catering to investors and shareholders seeking regular monthly dividends with low risk. It comprises the two assets that remained in our portfolio, both performing well. One of them is a Built-to-Suit property with income from Vale, while the other is in the heart of Rio de Janeiro, with an occupancy rate above 95%. Together, they create a diversified portfolio with high diversification, which generates risk dilution", stated Jaco.

"The REIT entered the market with significant size, valued at R$ 1.23 billion, making it one of the five largest offices REITs in Brazil", Jaco added. The Rio de Janeiro asset mentioned by Jaco is Passeio Corporate, a Class A+  property monitored by SiiLA Market Analytics platform.