Sotheby’s Sells Million-Dollar Properties in Brazil and Business Is Good

Minas Gerais, Brazil, farm offered by Sotheby's Crisis, what crisis? Fábio Rossi Filho, director of the Brazilian real estate branch of famous auction house Sotheby's doesn't believe there is any. According to the executive, with the global financial crisis, which affected sector credit, the country is gaining space in the global real estate market.

"Buying real estate is, once again, a good deal. It is a safe haven in times of crisis and Brazil has great opportunities to offer investors," stated Rossi.

With the market on the rise, Sotheby's Brazil hopes to end the year with sales of 1 billion Brazilian reais (US$ 481 million). "For 2009, the target is to double this figure," he added.

Currently, around 70% of the Sotheby's real estate buyers are Brazilian and 30% are foreign, but this figure should rise next year. A thermometer, according to Rossi, is the receptiveness that the group's offices in 30 countries worldwide have shown for real estate in Brazil.

This includes two branches in Arab nations, Morocco and Qatar. "In the last general meeting we had (there are four a year), in September, with all the Sotheby's offices worldwide, several Brazilian items of real estate were among the best options offered by the group," says Rossi. In the meetings, the most interesting business opportunities out of the company's 400 units were presented.

Sotheby's arrived in the country at the end of 2006, with the opening of an office in São Paulo. At the time, the company invested around US$ 5 million. The company's first year of activities was 2007. The Brazilian real estate potential, mainly for the sectors supplied by the company – the luxury market -, was being studied by Sotheby's in recent years.

"Brazil has what is necessary to offer buyers of individual units, like apartments in São Paulo, Rio and cities in the Northeast, to farms and agribusiness investment and hotels on the coast, for example," said Rossi.

The latter sector, incidentally, was reason for interest by an Arab fund, whose name was not disclosed, and is one of the Sotheby's bets to attract foreign buyers in the country. According to Rossi, in November Sotheby's is going to get a new unit turned to agribusiness, to be based in the city of Campo Grande, in the state of Mato Grosso do Sul.

Currently, among the 200 main kinds of real estate offered by the company, there are agricultural properties like Ilha and Santa Cristina Farms, in Minas Gerais, and Bahia Farm, in Bahia – which is among the most expensive properties, going for US$ 10.8 million. "The country's potential for trade of this kind of real estate is enormous," said Rossi.

In São Paulo, the value of the company's real estate varies. The client portfolio includes apartments costing US$ 700,000, US$ 1 million, US$ 2 million and US$ 3 million. The price, according to the executive, is attractive to foreigners.

"Real estate in Brazil is much cheaper than abroad," said Rossi. The company site (www.sothebysrealty.com) confirms that, mainly when comparing the cost in Brazil and in other countries in which Sotheby's operates.

According to Rossi, real estate generally arrives at the company in three ways. Either found by company professionals or through people who want to reorganize their real estate portfolio, as they no longer use their beach house, or they want a smaller house, etc. There, according to the executive, comes the Sotheby's differential, which is "knowing what the person has to offer and what she is seeking and trying to find the best solution."

To reach foreign buyers who, in general, visit the English site, the concern is to "provide safety", in which the name, of international renown, helps very much. Explaining how the Brazilian legislation works is also an important factor. "But that is calm, there is no bureaucracy, in this case. The Brazilian legislation is favorable to this kind of deal," said the executive.

This year, the company should also open another three units: one in Natal, Rio Grande do Norte, another in João Pessoa, in Paraí­ba, and one in Maceió, in Alagoas. "We are also studying the opening of offices in Rio de Janeiro and in Florianópolis, in Santa Catarina," said Rossi.

All of these regions attract a great number of foreign tourists, so they are already known by the buyers, which makes negotiation easier. Apart from second hand real estate, Sotheby's also offers newly released ones. "And we also plan to be recognized for this service in Brazil," finished off Rossi.

Anba

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