O Globo: In Faria Lima, square meter breaks new record and 11-story building is valued at more than R$800 million

O Globo - Judging by the figures that investors are willing to pay for it, the office space has certainly not died. The asset manager VBI, which has been acquiring properties in the new financial heart of São Paulo, has just purchased a portion of Vera Cruz II, located on Avenida Brigadeiro Faria Lima. Its fund, VBI Prime Properties (PVBI11 on the stock exchange), is paying nearly R$294 million for a 36% stake in the 11-story building, which is home to firms such as investment managers Captalys and Riza, law firm /asbz, and Paper Excellence.

With this transaction, the building has been valued at R$816 million, and the price per square meter is coming out to R$40,800 — an unusual figure even for the blocks where the Brazilian GDP competes to establish its offices. Last year, when a group of investors bought a 62% stake in the Infinity Tower, one of the key buildings on Faria Lima, the price per square meter was R$39,200 — a record in transactions involving a single asset, as reported at the time.

'The pay or find another region' 

— This is the value the region is accepting, given that the vacancy rate is below 10%, and leases are around R$240 per square meter. In other words, it's expensive but not absurd, considering the replacement cost. In the Faria Lima region, there is not much more space to build. The logic then is almost like a "pay or find another region" ... — Giancarlo Nicastro, CEO of SiiLA, specializing in real estate market data, jokingly remarks.

According to SiiLA data, there was even a recent transaction that reached a staggering R$61,000 per square meter, but it only involved a floor of the Pátio Victor Malzoni building, not multiple floors.

The figure for Vera Cruz II is also a record for the VBI Prime Properties portfolio, of course. A few weeks ago, when it acquired a large portion of The One building nearby, it paid R$32,800 per square meter — until then, the highest price in its portfolio.

In total, the fund now has six high-standard assets in its portfolio, with an average of R$28,000 per square meter in acquisitions. The vehicle, which is raising a new issuance of up to R$600 million, is valued at R$1.3 billion on the stock exchange and has more than 134,000 investors.

VBI, its manager, focuses on the real estate market and manages R$9 billion distributed among various funds.

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