Brazil has powerful fundamental growth drivers, including strong demographics and an abundance of natural resources. It has the world’s 5th largest population, with a median age of 32 (vs. 40 in the UK and 38 in the USA). Today, over 70% of Brazil’s population belongs to the middle and upper classes, while just 15 years ago, that same percentage used to represent the country’s lower class.
Brazil is one of the only three countries that, along with the USA and China, have simultaneously a GDP over USD 1 trillion, a population of more than 100 million and a territory larger than 4 million km2.
The issues that the country faces today, such as improving productivity, seem eminently surmountable, especially when compared to issues such as water scarcity, over-population and terrorism, faced by many other countries. Brazil is a self-sufficient country whose renewable water resources (greater than Russia and Canada combined) the world seems increasingly dependent upon to feed itself.
Along with the positive base fundamentals, Prolifico currently sees Brazil at a suit spot for investment. After its worst recession in history, Brazil has re-emerged in 2017, returning to a solid growth path. Inflation and interest rates are at record lows and GDP forecasts for 2018 and 2019 are very promising, while the BRL has been at very favourable levels in USD terms. Coupled with that, over the last years, the country has seen an unprecedented fight on corruption, which has changed Brazil forever, reinforcing the strength of its institutions and creating new and more transparent foundations for business and politics.
Prolifico believes that for many years to come a constant flow of acquisition opportunities will present themselves in the commercial real estate space, particularly medium sized assets in up-and-coming areas that are well suited to Prolifico’s alternative real estate strategies and core operating business models. These assets and areas are far less susceptible to the inherent cyclical nature of the more mainstream real estate sectors, assets and areas.