Independent asset management firm Cy Capital believes that the industrial properties market in Brazil is entering a new phase due to rising costs and a trend of absorption levels stabilizing. Despite the challenging scenario for the capital market, the firm is optimistic about the performance of the warehouse market, which it believes will continue with consistent demand and controlled supply throughout this year. 

Cy Capital's Funds Manager, Bruno Ackermann, spoke with the REsource team about the performance of industrial properties for the coming months and the company's prospects. 

"We are optimistic about the performance of the warehouse market, which should continue with consistent demand and controlled supply throughout this year", Ackermann said. According to data from SiiLA Market Analytics, the year 2022 broke another record in the volume of new stock of industrial properties delivered (Classes A+, A and B), with an additional 2.7 million m² added to the existing stock. Currently, Brazil has more than 23.6 million m² of industrials assets. 

For 2023, SiiLA projects that approximately 2 million square meters of new stock will be delivered, taking into account the statistical analysis, with the majority of assets being of high standard (classes A+ and A). 

Talking about high-end properties under construction in the country, Cy Capital accounts for 7.7% of the total predicted gross lettable area (GLA) to be delivered during the currently year. In Ackermann's view, tenants' main demands are for asset that offers both: efficiency for the tenant´s operation and proximity to consumer centers. 

In the first quarter of 2023, the company delivered Cy Log Embu, an A+ asset with 36,307 square meters of GLA and 75 docks in the state of São Paulo. The firm has 2 industrial projects under construction. One is located in Guarulhos and is expected to be rated as an A+ property, and the other development is in Extrema, in the state of Minas Gerais. 

Focusing on the industrial market in the Southeast region at this point, Cy capital is looking to expand into other areas for its future projects. "In addition to the Southeast region, we have noticed that Belo Horizonte and Salvador offer a good opportunity as well. Several capitals in Brazil have become demanding centers for space, attracting investors, with the advent of e-commerce. This is very positive for the market.", Ackermann pointed out. 

Established in 2021, Cy Capital is part of the Cyrela Group and was born as a branch for the group's capital and external investors' capital in the commercial real estate sector, focusing on warehouses, offices, and credit funds. Ackermann provides further details on the establishment of the firm in this video recorded during a site visit by SiiLA ACADEMY students to Cy Log Embu, when the asset was still under construction. Check it out!