JiveMauá's New Fund Completes Acquisition of Four Properties but Exposes FII to Tenants with Troubled Histories

Despite a high Cap Rate, the properties are leased to companies facing financial challenges, such as Casas Bahia, which recently underwent an out-of-court restructuring, and Ford, which may struggle with import restrictions

Brunno Bagnariolli, Partner and CIO of Real Estate Strategy at JiveMauá

By: SiiLA News

02/13/2025

JiveMauá has announced the acquisition of four industrial properties worth R$ 1 billion for its new fund, MCLO11. The assets are located in the states of Rio de Janeiro and São Paulo. According to SiiLA's intelligence team, the overall acquisition registered a Cap Rate of 9.65%.

Although the announcement was made on Tuesday (11), the acquisition process was completed on January 30, according to the official disclosure. The total gross leasable area (GLA) of the properties amounts to 599,000 m², resulting in a price of R$ 1,700 per square meter.

The acquired properties include the Icon Realty Cajamar, leased to Ford, and three standalone warehouses leased to Grupo Casas Bahia, located in Jundiaí and Ribeirão Preto, São Paulo, and Duque de Caxias, Rio de Janeiro.

In a press release, Bruno Bagnariolli, Partner and CIO of Real Estate Strategy at JiveMauá, stated that the acquisition was a solid investment considering the asset quality and pricing.

“We believe a successful real estate strategy combines acquiring high-quality assets in strategic locations at competitive prices with a margin of safety. With a healthy capital structure and the time to navigate the real estate cycle, it is possible to negotiate strategically and maximize returns for investors,” Bagnariolli added.

All individual Cap Rates are available on the exclusive subscriber platform, Market Analytics.

Tenants

Despite the high Cap Rate, the acquisition exposes the fund to financially unstable tenants. The retailer Casas Bahia recently faced management turmoil, leading to an out-of-court debt restructuring request.

This measure aimed to renegotiate the company’s debts without judicial intervention. The retailer reached an agreement with Bradesco and Banco do Brasil, committing to repay R$ 4.8 billion over six years, with a minimum payment of R$ 500 million by 2027.

Additionally, high interest rates create an unfavorable environment for the retail sector. In Casas Bahia’s case, Banco Safra downgraded the company’s stock rating from neutral to sell.

Safra’s evaluation states: “Compared to its peers, we still see the company as a laggard in terms of returns (1% return on invested capital vs. 6% for MGLU and 41% for MELI), while its operating cash burn remains high at R$ 1.4 billion over the past 12 months.”

Meanwhile, automaker Ford operates in Brazil exclusively through vehicle imports from North America. In 2021, the company shut down its manufacturing operations in the country, and all its vehicles currently available in the market are imported.

Recently, Ford’s CEO, Jim Farley, warned that tariffs imposed by Donald Trump could "blow a hole" in the U.S. automotive industry.

"Let’s be very honest: in the long term, a 25% tariff at the Mexico and Canada borders would create a hole in the U.S. industry that we’ve never seen before," said Farley.

Exposure

Since the fund holds only these four properties, it has a tenant exposure of 13% to Ford and 87% to Casas Bahia. According to SiiLA's intelligence team, tenant concentration is not ideal for a fund, as greater diversification would mitigate the impact of potential tenant departures.

Another concern raised by experts is sectoral diversification. A fund composed entirely of companies from a single sector may suffer significant negative impacts if a widespread crisis hits that industry.

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