Modular Santa Cruz: The Newest Industrial Asset in Rio de Janeiro's Santa Cruz/Campo Grande Region

In a groundbreaking achievement for the industrial real estate sector in Rio de Janeiro, the Modular Santa Cruz emerges as a Class A asset with an expansive gross leasable area (GLA) of 27,416 square meters. According to SiiLA Market Analytics, this property, developed by the FIP TRIX Desenvolvimento Modular Santa Cruz investment fund and managed by BV Asset, not only attains Class A status but also holds the distinction of being the sole high-end asset delivered in the city during the first quarter of 2023.

Located in the Santa Cruz/Campo Grande region, specifically on Avenida Brasil, near the Rio-Santos Highway, with easy access to Santos Dumont Airport and the Port of Itaguaí, the industrial property is available for lease. The editorial team at REsource interviewed Steven Shieh, Real Estate Portfolio Manager at BV Asset, about the asset's delivery and its differentials. Shieh recalled the boom that occurred in the region from 2009 to 2016. "Santa Cruz has always been a promising region for warehouses. Rio de Janeiro reached the highest rental values, both for offices and warehouses. We even had many BTS projects for large retailers", said Shieh.

Initially planned as a built-to-suit (BTS) endeavor, the Modular Santa Cruz project underwent a shift in response to evolving economic conditions during its construction phase, leading the fund to pursue a speculative project instead. Having completed the first phase, the project's management now prioritizes optimizing its performance. Looking ahead, the team plans to embark on the second phase, which involves the construction of an approved expansion project encompassing an additional 67,000 sqm of leasable area. This expansion will elevate the asset's total leasable area to an impressive 95,000 sqm in the coming years.

Shieh highlighted the unique features of the asset compared to the existing stock in the region, stating, "Today, most of the available warehouses in the region are big box. So, practically any tenant who wants to rent a warehouse cannot rent less than 10,000 sqm and cannot find docks on both sides, which makes it difficult for smaller occupancies." He further explained that Modular Santa Cruz offers a more flexible and modular design, allowing it to be sliced into smaller modules of 1,000 sqm. The property also boasts cross-docking capabilities and ensures high efficiency. According to Shieh, "This allows us to cater to smaller tenants, which is our main advantage. Additionally, being located in a logistics-friendly area adds to its appeal."