Friday, June 12, 2009
Dear Reader,
As I suspected, it was confirmed last week that Fortaleza will be one of the host cities for the World Cup soccer tournament in Brazil in 2014.
The state of Ceara’s infrastructure spend leading up to the games will be 9 billion reais ($4.5 billion). It’s too early to say exactly how much of that will flow into Fortaleza—I’ve requested details from the governor’s office. Once I have that list, I can tell you what this billion-dollar facelift will mean for our investments in and around this city.
Now that Fortaleza has been named as a host city, the first major benefit for the real estate investor will be demand for accommodation for corporate lettings linked to 2014 infrastructure projects. Look to see this trend develop throughout 2009.
The second major benefit will be the influx of foreign investors looking to profit from the so called “World Cup Effect.??? Real estate prices in South Africa rose by a whopping 35% in 2005. Hosting the 2010 World Cup was a major driver (although there were other strong trends at play). Fortaleza could immediately get the attention of foreign investors. I expect the impact of this World Cup Effect to peak in 2010 as attention turns from South Africa to Brazil.
The third major benefit will be the marketing exposure in the lead up to and during the tournament. Imagine England v Germany in Fortaleza. Now that would put Fortaleza on the map. Visitors will come for the tournament…many will return. Soccer fans who watch from home will be lured to visit Brazil by the pictures of this coastline that are beamed into their living rooms. Remember, today this stretch of coast is relatively unknown outside of Brazil. How this could change. Look for this to peak from early 2013 to kick off in the summer of 2014.
As I’ve been telling you, now is the time to position yourself in the short-term rental market in Fortaleza. This is the type of inventory I’m actively scouting on your behalf.
Ronan McMahon
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brazil, appreciation potential, rental yield
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