FII Market Loses Value as Trading Activity Slows

Funds’ market capitalization has fallen by around BRL 5 billion since March, while trading volume dropped nearly 15% in June; brick-and-mortar FIIs continue to trade below net asset value

Bianca Maria, Cash Equities Product Manager at B3, the division responsible for real estate investment funds traded on the stock exchange

By: SiiLA News

07/28/2026

The Brazilian real estate investment fund market began to lose momentum in June. Data from B3 show that the funds’ market capitalization declined again after reaching its highest level of the year. The financial stock, which represents the market value of the shares held by investors, fell from approximately BRL 201 billion in March to BRL 196 billion in June — a reduction of around BRL 5 billion in just three months.

The loss in value was accompanied by a slowdown in trading activity. After generating around BRL 11.4 billion in transactions in May, the market closed June with approximately BRL 9.7 billion traded, a decline of nearly 15% in just one month. Average daily trading volume followed the same trend, falling from approximately BRL 537 million to BRL 483 million.

From an annual perspective, 2026 recorded the sharpest decline in trading activity since 2023, when accumulated volume reached BRL 64.7 billion. The improvement seen the following year, of more than BRL 20 billion, was not sustained and, through June this year, volume fell again to a level even lower than the initial benchmark.

FII Trading Volume Falls 28% Through June 2026, While the Number of Trades Plunges 56%

The figures make June a weaker month for the FII market, both in terms of market value and liquidity. It is still too early to determine whether the movement represents only a temporary adjustment or the beginning of a more prolonged period of weaker momentum.

Discounts Persist Among Brick-and-Mortar FIIs

The loss in value is also reflected in how the market prices the leading brick-and-mortar FIIs. Even funds with established portfolios, high-end properties and well-located assets continue to trade below their net asset value.

The trend is particularly evident among logistics funds. LVBI11, which owns logistics warehouses and is being incorporated into HGLG11, trades at a price-to-book ratio of 0.86, representing a discount of approximately 14% to its net asset value. XPLG11 has a price-to-book ratio of 0.87, while HGLG11, one of the country’s largest FIIs, trades at 0.89 times its net asset value, a discount of around 11%. BTLG11, although trading closer to book value, also remains below that level, with a price-to-book ratio of 0.96.

Among office funds, the discount is even more significant. PVBI11, which owns high-end office buildings in São Paulo, trades at a price-to-book ratio of 0.67. In practice, the market values its shares at around 33% below the fund’s net asset value.

The Challenges Facing FIIs

These discounts show that the decline in share prices is not necessarily linked to a deterioration in the underlying properties. Many assets remain occupied, continue to generate recurring income and distribute dividends to investors, as is the case with HGLG11, which has a vacancy rate of 3%.

The high-interest-rate environment helps explain part of investors’ caution. With the Selic rate at a restrictive level, fixed-income investments such as government bonds, bank deposit certificates and other CDI-linked assets have begun to offer higher returns with a lower perceived level of risk. In this context, real estate funds need to deliver a higher risk premium to remain attractive to investors, which tends to put pressure on share prices in the secondary market.

The impact is more noticeable among brick-and-mortar FIIs. Unlike the properties in their portfolios, whose values are usually reassessed periodically, shares traded on the stock exchange respond daily to investor expectations regarding interest rates, inflation and economic activity.

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