FM Logistic Announces Early Departure from Property in Canoas; A Look at the Region’s Industrial Properties Landscape

In September, Natura, which occupies over 80% of the property, also announced plans to vacate the premises ahead of schedule

Ronaldo Silva, president at FM Logistic in Brazil

By: SiiLA News

11/18/2024

FM Logistic Brazil, a transportation and logistics company, announced last week that it will vacate the Bresco Canoas property in Rio Grande do Sul earlier than scheduled. The company, which signed the lease in April 2021 with plans to remain until March 2026, will fulfill a nine-month notice period, with rent set at approximately R$280,000, adjusted according to the IPCA/IBGE index. The early termination will also include a penalty equal to three months’ rent.

In response to inquiries from REsource about its exit, FM Logistic stated that due to commercial strategy and confidentiality, it could not disclose its plans for Rio Grande do Sul. However, the company affirmed its “commitment to the logistical growth of the state, a market with strong business potential.” FM Logistic also leases 66,942.75 m² at the Anhanguera Distribution Center – SERBOM, a class A+ property in São Paulo.

The property is part of the portfolio of the Bresco Logística Investment Fund, BRCO11. According to Bresco, the contract with the tenant stipulates a notice period, which provides time for re-marketing the property.

“The Canoas property has been receiving weekly visits from interested parties. With full vacancy of the property, we foresee increased liquidity and flexibility, including the possibility of dividing the asset into smaller units to enable cross-docking operations, given its strategic location to serve Greater Porto Alegre,” stated the management company.

Currently, the property is fully leased, with FM Logistic occupying 12,488 m². The remaining area of 20,807 m² is occupied by Natura, which is also in its notice period for early exit. The cosmetics company had a lease set to run until March 2029 but announced its early exit in September of this year.

With a six-month notice period, Natura will be required to pay a contract termination penalty exceeding R$2 million, along with rental costs of R$478,000 during the notice period.

The Industrial Market in Rio Grande do Sul

The severe rains that recently led to a tragic situation in the state have impacted the logistics real estate market in the region. At the time, Bresco reported that the Canoas property, responsible for 5% of the fund’s monthly income, had been directly affected by flooding in the area, and tenant activities were suspended until operations could resume.

Read more: Rio Grande do Sul Faces Climate and Humanitarian Crisis Affecting Entire Industry, Including Industrial Properties

During the flooding, Bresco utilized its Flex Viracopos facility in Campinas (SP) to help distribute supplies to the region. This effort was carried out in partnership with Azul Cargo. Today, Bresco Canoas is fully operational again.

According to data from SiiLA’s Market Analytics platform, Rio Grande do Sul currently has 540,079 m² of logistics stock across A+, A, and B classes, with a vacancy rate of 1.33%. Following slight stability between 2021 and 2022, the market rent per square meter has been rising and now stands at R$19.26/m².

By: SiiLA

And more: Rio Grande do Sul's Recovery: Companies Gaining Momentum Toward Normalcy

Bresco Canoas

Photo: Disclosure

With a total area of 33,295.00 m² and managed by Colliers, Bresco Canoas is located near Salgado Filho Airport in Porto Alegre. FM Logistic is the second company to announce its exit from a Bresco property in November. Last week, with a multi-million reais penalty, Americanas S.A. also terminated its lease on a property in Minas Gerais, Bresco Contagem, vacating three years before the contract’s end.

Read more: Americanas Terminates Lease on Contagem Property Three Years Early

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