Monday, December 20, 2010
Dear Reader,
Fortaleza is getting a major upgrade in its infrastructure. $6 billion is being spent on improving roads, bridges, tourism amenities, ports and airports. This state capital (Fortaleza is the capital of Ceará) is working hard to ensure its infrastructure improvements keep pace with its booming economy. More Brazilians are drawn here than anywhere else in their vast, beautiful country. They come here for the wide, white- sand beaches, blue waters and year round warm, sunny comfortable weather. Brazil is set to grow by close on 8% this year. Growth in the Fortaleza region continues to outperform the country as a whole.
For example, passenger traffic at Fortaleza’s international airport increased 23% year-on-year to the end of August 2010, and cargo traffic rose by 40% in the same period. This increase is on a record previous period. This tells us how quickly economic activity is increasing here.
Job growth, car purchases, beach vacations, property purchases…they all follow a similar upward trend. This trend is playing out all across Brazil. The biggest real estate opportunities for us are on Brazil’s northeast coast, centered on Fortaleza.
I consider the area around Fortaleza’s new convention center to be a pocket of opportunity. Blocks away from the central park, the convention center is located on Ave. Washington Soares. This is the axis of growth of Fortaleza, towards the rich suburbs of Eusebio and Aquiraz (home to Beach Park, with South America’s biggest water park). The exterior of the convention center is practically complete. It will be the second biggest in Brazil. With two million square feet of space, it can hold up to six events at the same time.
A new metro system will provide modern and reliable public transport here. The first two routes (south and west) are already operational. In October, the contract was awarded for the east line. This will be the only fully underground line. It will run under leafy residential and commercial areas (such as Aldeota) as far as the new convention center.
Next door, UNIFOR (University of Fortaleza) is the largest private university in northeast Brazil with 25,000 students. Across the street is another private university and Fortaleza’s main courthouse. 140 judges sit here and 2,403 people work here. This is Fortaleza’s legal hub. Nearby buildings house the association of federal judges, the public defender’s building and the Tribunal of State accounts. Two office buildings close by house legal professionals.
Nearby is Iguatemi, the largest mall in Fortaleza, with over 300 stores. Hundreds of businesses are located in this area.
This is a nice area to live and work. The central park is 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, 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.
Directly opposite the convention center, you’ll find the site for the project Vitale. This is a two-tower project where you can get in on the deal with only 12,120 reais ($7089) down and monthly payments of 2302.80 reais ($1347.06), with adjustments for inflation. Vitale is composed of 133 units. Every unit is 70 square meters (753 square feet) with two bedrooms. Amenities include a pool, party lounge, gourmet room to cook and entertain, gym, recreation area and even a kid’s room.
The developer (Magna Group) is strong. In fact, they are one of Fortaleza’s strongest and largest business holdings. The have been in business for over 40 years. Their main companies are Magna Locações, Magna Praia Hotel, Mareiro Hotel and Magna Construções.
Magna Locações is the largest heavy equipment-leasing firm in the state of Ceará. They have been in business for more than 30 years. They also have hotel interests on Fortaleza’s boardwalk.
Magna Construções is their construction arm. The have delivered several buildings in Fortaleza like Ed. Saveiros, Magna Abolição, Magna Aquidabã, Magna Rui Barbosa and Las Palmas.
Pricing in Vitale starts at 3,463 reais ($2025) per square meter. Across the park in Aldeota, you could pay 6,000 reais per square meter. Along the boardwalk, you could pay up to 10,000 reais per square meter. This area (around the convention center) is seriously on the up. As prices rise across the rest of Fortaleza, I expect they will rise here.
Demand in this area is set to set to soar between now and when your unit will be delivered in March 2014. The new metro line will have arrived by then and a new office tower nearby will also be well advanced. Across the park, Aldeota has been the most desirable commercial/residential area to date. Today, Aldeota is pretty much fully built out. There is a shortage of plots suitable for development.
The area around the convention center is the next big place. And Vitale is today’s best opportunity here.
My broker contact on the ground in Fortaleza, Daniel Neves, is standing by to send you an information pack.
Ronan McMahon
Posted Under:
brazil, appreciation potential
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