This money dripping into the account monthly makes the investor's brain put the FIIs in the fixed income box, even if they are variable income investments, such as stocks. This attracted many people with a more conservative risk profile to an investment with a more aggressive profile. In 2017, when the Selic rate was still above 10% per year, 100,000 people had these funds in their wallets. By the end of last year, the number had reached 1.5 million.

The people who have joined won an average of 8.73% last year. R$100 thousand would get R$700 per month and double the money invested in nine years. It looked like an excellent deal in reality, with Selic at 2%.

But that very low-interest rate lasted much longer than expected. Six months, to be precise. Brazilian inflation began to rise to such an extent that the Central Bank tightened the turbo mode on interest rate soaring, the tool it has to contain the high prices. If the Selic took four years, from 2017 to 2020, to drop from the double digits and reach the low of 2%, the inverse path was much shorter. It only took a year for interest rates to return to the 10% – 10.75% range.

If XP itself, which sells real estate funds, was decreeing the end of offices, it is natural for investors to jump out of that boat. And the broker was not alone, of course. The vacancy rate jumped to 25% in São Paulo, according to Giancarlo Nicastro, CEO of SiiLA, a multinational that monitors the real estate market. In 2019, it was 19%.

Read full story (in Portuguese).

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