Multifamily Expands to Brasília with Luggo’s First Project in the City; Sector Surpasses 11,000 Units in Brazil

The growth of the multifamily market is not an isolated phenomenon in Brazil. In the United States, according to a report by Banco Inter, the segment saw a significant surge after the pandemic, with the total number of units sold increasing by 35.7%. Today, multifamily properties account for approximately 30% of the U.S. real estate stock.

In Brazil, the sector's steady growth is already evident. Despite the quarterly rise in new project deliveries, occupancy rates remain high, signaling strong demand.

"In the U.S., the multifamily sector has already surpassed both shopping malls and office buildings, establishing itself as the largest real estate segment. I see solid growth in this market, but pinpointing the exact trajectory of this curve is challenging, as various economic factors influence the trend. The first quarter has proven particularly difficult, adding uncertainty. Still, one thing is clear: the multifamily sector's upward trajectory is undeniable," explains the managing partner at Inter Asset.

Between the second and fourth quarters of 2024, the number of units increased from 9,900 to 11,100, with the completion of 13 new towers, adding 1,800 units to the market.

The INRD11 real estate investment fund, which holds multiple Luggo developments in its portfolio, has been posting strong financial results. In its latest management report, the fund reported an occupancy rate of 94.1% and a record gross revenue of R$ 1.02 million. This performance secured dividends of R$ 0.62 per share, pushing the annualized dividend yield to 11.8%.

"The fund's profitability has remained solid. In the United States, a healthy vacancy rate is considered to be around 15%, while in Brazil, this threshold is approximately 5%. This difference exists because replacement rent—the rent price set for a new tenant—tends to be slightly higher than the previous contract. As a result, tenant turnover not only keeps occupancy stable but also captures additional value for the fund," explains Mauro Lima.

When analyzing six real estate investment funds (FIIs), data from Clube FII shows that funds focused on residential leasing have an average yield distribution of 7.98%, with a current average daily liquidity of R$ 85,000 and an average market value of R$ 72.1 million.