Real Estate Funds (FIIs) were one of the assets most affected by the restrictions of the pandemic, especially in the Shopping Malls and Lajes Corporativas classes. Despite the advance of vaccination and the gradual recovery of the economy, the scenario is still not the best for the segment, but a reheating of the real estate market could reflect positively on the funds.
According to a survey by the Brazilian Chamber of Construction Industry (CBIC) released on Monday (23), Brazil registered a 46.1% increase in property sales in the first half of 2021, compared to the same period last year.
“The increase in property sales reflects a more favorable business environment, which could reflect positively on real estate funds. The heating up of the real estate market is another thermometer for the FIIs”, explains Ronaldo Candiev, Head of FIIs and FIPs at XP.
According to the economist at Golden Investimentos João Cruz, a heating up in the real estate market can impact the price of real estate and, consequently, the share of real estate funds, especially brick funds, which are composed exclusively of physical properties, which comprise the logistics warehouses , shopping malls, bank branches and corporate slabs.
Cruz also says that the civil construction inflation index (INCC), with an increase of 13.5% in the year and 22.6% in the last twelve months, has not yet been fully incorporated into the share of brick funds. “The funds that are at a discount may have an appreciation of shares due to the heating of the real estate market as well as the calculation of inflation on assets that are within the portfolio”, he assesses.
Candiev also points out that FIIs are quite defensive in an environment of higher inflation. “The real estate assets have rental contracts that have the capacity to pass on inflation”, he says.
However, experts warn that FIIs are quite volatile and the rise in the Selic could harm their performance. “The scenario is causing investors to migrate from risky investments, such as REITs, to low risk ones, such as fixed income, which are offering good rates of return”, says Alkeos Saroglou, partner at Alta Vista Investimentos.
the most recommended
The FIIs most recommended by specialists are paper and logistics warehouses. “In the FII class, we recommend logistics and paper, because they have more defensive characteristics. Logistics because of the strong e-commerce driver, and paper because of its defensiveness and ability to pass on the price index”, advises Candiev.
Logistics warehouse funds are properties focused on logistics operations, such as e-commerce distribution centers. According to Colliers International Brasil, the leased area of logistics warehouses reached more than 2.6 million m² last year, a record gross absorption. The reason for the good performance was the growth of e-commerce, of more than 70%.
Among the logistics warehouse FIIs available on the market are XP LOG Fundo Imobiliário (XPLG11), CSHG Logística Fundo Imobiliário (HGLG11), VINCI LOGÍSTICA Fundo Imobiliário (VILG11) and Bresco Logística Fundo Imobiliário (BRCO11).
Paper funds are similar to bricks, the investment also takes place in physical real estate, but the allocation of money is made in fixed income securities in the real estate sector. The main paper funds are Real Estate Receivables Certificates (CRIs) and Real Estate Credit Bills (LCIs).
“The paper FIIs linked to the purchase and sale of real estate units remain with good profitability, as inflation positively impacts their results, and the trend is that there is always a premium between the Selic and the pre-target rate of these funds”, says Caio Braz, partner at Urca Capital Partners.
This Wednesday (26), the Ifix index, an indicator of the average performance of the prices of real estate funds traded on the B3, ended with a slight increase of 0.10%, at 2.723.55 points.