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 ‘sweet spot’ for investment. Inflation, interest rates and currency are all close to historic lows and GDP forecasts are improving; after its worst recession on record Brazil is re-entering a growth cycle. Having weathered the Covid-19 pandemic relatively well from an economic standpoint, rising commodity prices are expected to provide further support for the recovery. Meanwhile an unprecedented fight on corruption that took place in recent years has changed Brazil for the better, reinforcing the strength of its institutions and paving the way for the middle class to continue its emergence.
Prolifico believes that for many years to come attractive investment opportunities will present themselves in the commercial real estate space. We focus on medium to large assets in up-and-coming areas that are well suited to Prolifico’s alternative real estate strategies and core operating business models. These alternative asset classes are less susceptible to the inherent cyclicality of the more mainstream real estate sectors.