Tuesday, August 7, 2012

Brazil: Surfing the real-estate wave

Favelas, the longtime feared Brazilian slums that were traditionally known as some of the most dangerous neighborhoods on the planet, have transformed into the diamond in the raw for real-estate. Today, there are many American companies who are finding it harder and harder to compete in local markets, but have not realized there are interesting opportunities in emerging markets that are yet to be discovered. As a graduate student at Northwestern University's IMC program, I have developed a special interest in Brazil and the emerging markets of Latin America. My international background, and experience launching products and brands in these areas, have given me a unique perspective on the broad range of opportunities that lies ahead for those wanting to explore new territories.

A good way to start is by taking a look at companies like GTIS, who have figured out a way to profit from Brazilian growth. By gathering investment from the outside, GTIS is funding growth and profiting from it as well. Today, they have offices in New York as well as Sao Paulo. As seen in an article by the New York Times, there are many opportunities to be taken advantage of by those who see them.

Metropolis like Rio de Janeiro, São Paulo, and northeastern cities like Recife are experiencing unprecedented growth. The slums of these cities, which are scattered close to proliferous neighbourhoods like Rio’s Leblon and Ipanema, have begun acquiring new value as land becomes scarce. Finding these types of opportunities may be more than half the battle when it comes to investments. Today, with foreign money being injected into the country, not only have inhabitants of the favelas increased their purchasing power, but the land around them is increasing in value. Favelas are often located close to some of the most sought after neighborhoods, creating a great opportunity to become a part of the imminent real-estate wave.

However, it is not all reais and dollar bills. For those willing to take the plunge and put in the effort, it is important to understand that the Brazilian real-estate market operates very differently than its American counterpart. Making assumptions can be the death of any well-intentioned business venture, in a market as different and fast paced as this one. I recommend you surround yourself with experienced people, and stay up-to-date with the news. Understanding the Brazilian culture and market dynamic can be a difficult task for foreigners, but learning how to do it is well worth the effort. The United States Department of Commerce, for instance, is a good place to get started. Finally, going to local experts such as Connection Consulting, and finding the right alliance to help you in your efforts to penetrate the Brazilian market.

Background: Laura Lozano is a student of Integrated Marketing Communications at Medill, in Northwestern University. She has experience working with international brands from a broad range of industries, ranging from fast-food to real-estate.

Skype: laura_loz
Twitter: laura_lzo

 


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