The Southeast Continues to Lead in Brazilian Industrial Property Inventory

Brazil boasts 25 million square meters of industrial properties spanning classes A+, A, and B. To put this into perspective, this figure surpasses the total land area of Sergipe, a Brazilian state covering 21 million square meters. Alternatively, it's equivalent to the combined size of five Federal Districts.

However, the total square meters are not evenly distributed throughout the Brazilian territory. In an exclusive analysis obtained through Market Analytics, the accumulation of industrial developments in the Southeast region is evident, with 19.3 million square meters, equivalent to almost 77% of the national inventory of industrial properties A+, A, and B.  

Right after the Southeast, the Northeast region occupies the second place in total inventory of industrial properties, representing 10.24% of national developments, totaling 2.5 million square meters. A region that has been consolidating as a logistics hub, as Giancarlo Nicastro recounted in an interview conducted in 2023.   

SiiLA's data indicates a shifting trend as occupying companies increasingly set their sights beyond the Southeast axis, driving demand for prominent developers. In the Northeast, for instance, we observe the establishment of consolidated operations by major retailers, among them multinational giants like Amazon and Mercado Livre," remarks Giancarlo Nicastro, CEO of SiiLA.

By the end of 2023, SiiLA's monitoring identified that Mercado Livre expanded its occupation to 94,000 m². Amazon, on the other hand, occupies 196,400 m², with operations in Log Fortaleza II, Log Recife, Armazenna 4 Centro Logístico, in Pernambuco, and in MJA Log, in Salvador.   

For André Romano, Industrial, Logistics, and Data Center Manager at JLL, the Northeast region boasts significant appeal as an industrial and commercial hub, particularly due to its sizable population and consumer base, trailing closely behind the Southeast region in these aspects.

"The Northeast region stands as a pivotal economic force, ranking third in the country in terms of GDP. Moreover, it harbors a substantial potential consumer market, ranking second nationwide in population size, following closely behind the Southeast region," he remarks.

Romano underscores the region's significance owing to its robust port infrastructure, facilitating the movement of over 300 million tons of cargo annually, with notable ports like Suape (PE) and Pecém (CE) leading the way.

"These ports have seen considerable investment from operators to enhance competitiveness compared to other major ports in the country. Capitalizing on these factors and leveraging the surge in online sales during the pandemic, e-commerce operators have expanded their footprint in the region by nearly 200%," he concludes.

Following closely behind the Northeast, the South region boasts 2.3 million square meters, accounting for 9.51% of the national inventory.

However, the North and Midwest regions lag behind, representing less than 2% each, with only 1.69% and 1.58%, respectively, of the total inventory of class A+, A, and B industrial assets.