Strategic portfolio rotation was another key topic in the interview. Abbud advocated for strict asset pricing and shared real examples, such as the sale of Block D at the JK Complex in 2022 to Brookfield, and the Vila Olímpia Corporate building—both transacted at valuations above book value. “We are an active manager. Did we hit the value? Then we sell. That shows the market that our assets are maintaining their value,” he said.

This philosophy is backed by proprietary valuation models and a structure designed to avoid conflicts between the firm’s own funds. “We don’t want competing funds with the same thesis. If we can’t justify separating them, it’s better to consider a merger—as long as it fully benefits the shareholders.”

On the industrial properties front, Patria sees low vacancy and strong demand but notes that high capital and construction costs are reshaping the sector. “The new rental rate reality is here. Today, seeing contracts between R$ 35 and R$ 45 per square meter is normal. And even so, the current portfolio is not easily replaceable.”

Abbud sees this scenario as an implicit valuation gain for existing funds like HGLG and LVBI. “It’s not worth building below the cost of capital. So, those who already have positioned portfolios are protected and ready to capture future appreciation.”

In the office sector, the focus remains on São Paulo, especially the Faria Lima region, which Abbud says remains resilient despite a vacancy rate of around 9%. “Faria Lima is still highly liquid. The market quickly absorbs any temporary discounts.”

He also highlighted changing workplace demands driven by the hybrid work model: “Companies now require more video conferencing rooms, relaxation areas, and collaborative spaces. This has increased space needs by up to 20%, even with the same headcount.”

Regarding sector risks, Abbud warned against excesses. “The industry has grown a lot but is still young. Share price cannot be ignored—it needs to be analyzed with discipline and a fundamentalist view.”

With a clear strategy and a robust portfolio, the closing message was one of stability and responsibility. “Will we grow? Yes. But with discipline, governance, and always with the shareholder in mind.”

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The SiiLA PODCAST is a content initiative by SiiLA aimed at broadening the discussion around key topics in the Brazilian real estate market. With biweekly episodes, the show brings together executives, investors, and industry experts to discuss data, strategies, and trends shaping the national real estate landscape.

Hosted by Giancarlo Nicastro, CEO of SiiLA, the podcast offers in-depth analysis by connecting the views of top market leaders with insights from a platform that works daily with real estate data intelligence. Each episode focuses on a different sector, such as real estate funds, logistics, office buildings, multifamily, shopping centers, and urban revitalization.

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