XP Properties (XPPR11), a Brazilian Real Estate Fund (FII), announced on March 23, 2023, the sale of two commercial properties and a partial sale of two other buildings in São Paulo state. The transaction, which was completed for R$ 200.7 million (approximately USD 38.13 million) marks the second-largest transaction in terms of value in the Sao Paulo office market for 2023. 

As per the Fund's report, it sold 25% of its stake in Faria Lima Plaza, which corresponds to 4,146 m² of gross leasable area (GLA). The transaction also includes their full participation in the Módulo Rebouças building (1,053 m² of GLA), and 100% of the participation in the Box 298 building (886 m² of GLA), both located in the Pinheiros region, and 12.9% in the I-Tower, in Alphaville, which represents an additional 3,038 m² of GLA. 

The buyer's name was not revealed by the fund's administrator and manager, Vórtx and XP Vista. According to the SiiLA Market Analytics platform, all assets involved in the transaction are high-end, except for Box 298, which is classified as C.

Giancarlo Nicastro, CEO of SiiLA, believes that the fund's strategy with this sale is to reduce cash exposure in a scenario of rising interest rates. "The corporate real estate market has suffered from the pandemic and remote work, causing some companies to rethink their investments in office assets. However, the prospects for the segment are improving, particularly considering that the Faria Lima region closed 2022 with a vacancy rate of only 5.07% for high-standard buildings and an average price per square meter 11% higher than before the health crisis”, he says.

We recently published an article on SiiLA Insights about the outlook for the Brazilian office sector, which you can read here.

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Faria Lima Plaza is an A+ property, with a total of 32,744 m² of private area, delivered in March 2022. While still under construction, XP purchased its 40% stake in this property from HSI in September 2020. The property is now the headquarters for Uber and Shopee in São Paulo and currently has an occupancy rate of 61.87%. The property was visited by Giancarlo Nicastro, CEO of SiiLA, in a special vídeo about the Faria Lima region.

Módulo Rebouças is a class A property located at the intersection of Rebouças Avenue with Capote Valente Street, delivered in 2015, and is the headquarters of Nubank, Box 298 is located on Wisard Street in Pinheiros and is 100% vacant. I-Tower, on the other hand, is an A+ property located in Alphaville, with over 40,000 m² of private area and tenants such as the telecommunications company Vivo and electronics company HP.

Previously, the XPPR11 Fund had a portfolio of six properties, including those mentioned above and the office towers Santa Catarina and Evolution Corporate Alphaville.

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