Commercial real estate in Brazil: what's the outlook for 2025?
After years of subpar performance, 2024 saw Brazil’s real estate market begin to show real signs of recovery, with high-end real estate transactions in the third quarter significantly higher in volume compared to the same period in 2023. The signs remain promising for 2025, even in the face of macroeconomic uncertainty, such as higher interest rates and inflationary pressures. Irrespectively, the indicators for various segments remain positive – including data centers, high-end offices, logistics, shopping centers, and residential property.
The shopping center segment saw considerable activity in 2024 and is expected to remain so in 2025. Examples include the Iguatemi Group’s acquisition of a significant stake in Rio Sul and Syn’s sale of six shopping centers from its portfolio to FII XP Malls for BRL 1.85 billion. 2024 was also a busy year for the logistics segment. Among the most significant transactions were BTG’s acquisition of GLP’s warehouse portfolio for BRL 1.8 billion, as well as Prologis and WTorre’s continued investments.
Moreover, big tech companies continue to search for and negotiate properties for their data center operations, reflecting the significant growth of this segment within the real estate sector.
The market for residential property in Brazil also performed well in 2024, driven by adjustments to housing programs and improved overall purchasing power among Brazilian citizens. This was particularly reflected in ultra-high-end properties, with developments and sales surging in comparison to 2023. In contrast, the country’s middle class faced more difficulties as a result of being more dependent on loans and credit.
Finally, the rural real estate segment saw a wave of activity in 2024, with certain transactions recording billions of Brazilian reais. This segment is expected to remain prominent in 2025, especially given the appreciation of the US dollar.
Brazil's data center sector continues to attract investments and has already secured a strong place as the main area of interest for various players. The hotel sector is also expanding, with significant growth expected in 2025 – increased demand and rising hotel rates are driving the opening of new hotels in many of the country's most sought-after cities and tourist destinations. In addition, there is a surge in demand for rural property to produce cocoa and raw materials for biofuels
Mariana Cobra
Partner
We are expecting an even more promising 2025 across various segments of the real estate market, as the momentum created in 2024 is maintained and further boosted with an increase in M&A transactions. However, together with the current macroeconomic scenario, we cannot ignore the legal uncertainty stemming from a lack of clear rules for foreign investment in rural properties, as it has a strong impact on the market. This uncertainty affects the market as a whole – both transactions involving rural land and investments in property for industry and logistics, as well as land required for infrastructure projects such as wind farms and solar parks. The government urgently needs to address this issue
Rossana Duarte
Partner
