Rio’s construction boom on the eve of the Olympics
As a result of hosting major world sports events in recent years, many of the Brazil‘s large cities have been undergoing large urban renewals. Rio de Janeiro‘s construction boom and urban renewal initiatives have been attracting special attention, particularly in light of next year’s 2016 Olympic Games. The fact that all developments are either public-private partnerships or thoroughly private enterprises means there’s a wealth of great opportunities for both foreign and local investment in Rio. It couldn’t come in better time: more and more ultra-high net worth individuals (UHNWI), i.e. those who own at least USD 30 million worth of assets, have been realizing how profitable foreign markets can be and are now starting to invest luxury property abroad.
| Brazil’s Ultra-High Net Worth Population |
Meanwhile, Brazilians have also been contributing a great deal to the process; the number of UHNWIs in the country is actually expected to grow 50% more than the global average over the next ten years. That trend follows the impressive growth of Brazil’s middle class and the reduction of the country’s rampant inequalities over the last decade. The Brazilian economy has therefore been mostly fueled by consumption from all income levels during the last few years.
The enlargement of Brazil’s UHNWI population can be more clearly illustrated by recent business aviation by region rankings, as the country’s and China’s figures have been challenging the position of the Middle East, currently the third largest market worldwide. The Brazilian super rich have been flying 20% more every year since 2010, mostly into the UK, Spain, Portugal, and France. They’ve been investing a lot in the foreign real estate market as well, which matches UHNWI’s typical interest in benefiting from property increases.
| What Can We Expect For Rio? |
Well, actually a lot. While the main project for next year’s Olympic Games is the Olympic Park in Barra da Tijuca, other small venues in Copacabana, Maracanã, and Deodoro are being built or renewed, which in most cases brings about an increase in real estate prices in the surrounding areas. Of course, that also means underpopulated and older buildings tend to be replaced by brand new constructions, especially in Zona Sul, where Copacabana is located and where empty lots are scarce and luxury apartments are in abundance. Barra in contrast still boasts empty areas that are now being occupied by huge high-end condos, in a new Rio’s construction boom that hadn’t been heard of for at least a decade.
As for the urban renewal initiatives, an immense city-hall-led project is currently being implemented in Rio’s port area, under the name of “Porto Maravilha”. Much like what happened in Barcelona in 1992, the local government plans to renovate a chronically degraded area in the city center that would have a lot to offer if given the proper attention. Centrally located and extremely rich in history, Rio’s port area is nonetheless ugly, sketchy, and underpopulated. The administration therefore wishes to bring a new life to the neighborhood. Major actions with that purpose include tearing down downtown’s infamous elevated ring road, implementing a modern tramway system, stimulating the construction of several high-rise corporate buildings, and establishing a cultural corridor in the area, with the dedication of two world-class museums and Latin America’s largest public aquarium.
So whether you’re an investor looking for a new chance of profit during Rio’s construction boom or just a regular tourist after a mix of beachside resting and sport-related excitement while staying in a luxury Rio apartment, the 2016 Rio Olympics will give you the best of both worlds.