Monday, August 30, 2010
Dear Reader,
Right in the heart of Fortaleza, you’ll find Parque do Cocó, spread over 2,854 acres. This huge urban green space is perfect for jogging, rollerblading or just relaxing in the green shade of one of the large mango trees. This is a great amenity for the people of Fortaleza. Straddling both sides of a river and dividing the city in two, it is one of the largest urban parks in South America. It has sports courts where friends, young and old, gather to play basketball, tennis, and volleyball. There is a jogging track, amphitheater and nature trails, where you can see colorful birds and butterflies, and small monkeys as they hop from tree to tree. Early in the morning and again in the evening you can enjoy free yoga, Tai Chi Chuan and aerobics classes in the park.
As real estate investors though we need to be conscious of what this park— combined with local preferences—means for demand.
Let me explain. I’m bullish on office space in Fortaleza… but I’ve passed on a few recent deals. Not every deal here makes sense. You need to understand local dynamics.
There are two Fortalezas when it comes to prime office space. One is in the north of the city, in Aldeota. Businesses and professionals like to be based here. Then you have another Fortaleza in the south of the city. This area is past the park, which separates the city. It is here that the new convention center is being built. Businesses and professionals also like to be based here. Thing is: residents of each side of the city prefer to stay on “their” side of the park. The park is a major bottleneck for traffic jams. Just crossing it can take up to 20 minutes at peak times on weekdays.
So, for office space you want to be on either the north or south side of the park. Office space in between is too far from Aldeota for Aldeotans, and on the wrong side for south-siders.
Demand has been building on the south side of the park. There hasn’t been any new office project there for many years, even though the wealthy southern suburbs have kept growing. The juridical complex next to the courthouse here is already the center for legal and associated services in the city. It continues to grow. Residential demand is also strong here. Remember, Fortalezans don’t like to commute. They want to live close to where they work, and work close to where they live.
There’s an office project in this area set to be released in the near future. The developer is ready to go…just waiting on final permits. Stay tuned. I’ll keep you posted.
Meantime over at the city’s Iracema beach, construction of the new boardwalk and the aquarium are ahead of schedule.
To remind you, Iracema is a way we can get in on Fortaleza’s boardwalk at the ground floor. Iracema is getting a major facelift. The result will be to extend the boardwalk to include Iracema Beach.
This project is part of the $5.6 billion investment in tourism and infrastructure in the lead up to the 2014 soccer World Cup:
- $135 million will be spent on the new aquarium (set to be the largest in South America)
- $30 million is being invested in a general upgrade of the area including the extension of the boardwalk
- $10 million is to be spent on the culture center renovation (this is Fortaleza’s art and theater center)
For those of you familiar with Fortaleza, the boardwalk is to be extended from La Casa restaurant as far as the new aquarium. Dingy bars will be replaced with more family-friendly restaurants and cafes…shiny new condos and hotels will take the place of the current 3-star hotels. This area will also benefit from the $19m that is being spent upgrading the boardwalk. Three years from now, there will be no visible break from the boardwalk to Iracema beach and the cultural center.
Families on vacation will want to stay here…as will visiting executives. Yet today, prices here are 22%-60% lower than along the boardwalk. As Iracema becomes part of the boardwalk, its prices will catch up with boardwalk prices.
Four weeks ago, I told you about Jardins de Iracema, a project in the heart of Iracema Beach, with 2-bed units from 260,000 reals ($148,571). These units are ideal for long-term rental. Indeed, fellow readers who bought here are already seeing monthly rents for furnished units of up to 2,000 reals per month ($1,140).
A small number of units are still available in the Jardins de Iracema project. Contact Daniel Neves here to find about current availability.
Ronan McMahon
You might also be interested in:
A New Boardwalk, and a New Opportunity
Posted Under:
Want More?
Sign up here for your free Pathfinder Alert e-letter, and we’ll send you our $50,000 Report...showcasing seven real estate opportunities for $50,000.
