December 21, 2023

Spotlight on recent transactions in Brazil

The retail sector has been a key area of focus for Ivanhoé Cambridge in Brazil ever since the inception of our longstanding partnership with the Carvalho family, which led to the creation of the Ancar Ivanhoé platform in 2006. Today, Ancar Ivanhoé is the second largest Brazilian mall company, growing from three assets to 26 shopping malls under management, 18 of which we own.

In recent months, this dynamic sector has undergone a shift in asset allocation, with minority stakes changing hands. We actively participated in this transaction activity, seizing the opportunity to further optimize our Ancar Ivanhoé portfolio.

We captured additional investments in two partially owned strategic assets, both located in the metropolitan region of Rio de Janeiro. We increased our ownership stake in Shopping Nova Iguaçu by 44%, effectively gaining control of the asset, and we acquired the remaining 25% stake in Botafogo Praia Shopping.

Botafogo Praia Shopping, Rio de Janeiro, Brazil

Alongside these acquisitions, we crystallized significant gains by selling partial stakes in three other owned assets: Via Sul Shopping in Fortaleza, Conjunto Nacional Brasilia Shopping, and Natal Shopping. This combined transaction, which totalled nearly R$300 million (approximately C$80 million), marks our second partial portfolio sale to Vinci FII, a Brazilian REIT.

“In alignment with our strategic plan, these moves have allowed us to increase liquidity by reallocating capital towards high-performing assets in order to improve the overall quality and risk-return profile of our portfolio to benefit from the growth of consumption in Brazil,” explains Adriano Mantesso, our Managing Director of Latin America.

Adriano Mantesso, Managing Director, Latin America, Ivanhoé Cambridge

Fuelled by persistent demand, Brazilian shopping malls maintained their robust performance in 2023 despite a higher interest rate environment. With street retail lacking in security and convenience, shopping malls remain a more attractive proposition for consumers and retailers alike, which presents substantial growth prospects and untapped opportunities. The Ancar Ivanhoé portfolio certainly reflects this positive trend, with occupancy rates currently at 95% and a steady stream of interest from prospective tenants.

In addition to our shopping mall portfolio, Ivanhoé Cambridge’s strategy in Brazil also focuses on the logistics sector, with investments made through the Prologis Brazil Logistics Venture (PBLV), a leader in the development and leasing of state-of-the-art logistics warehouses. Embracing both physical and digital retail, we are taking advantage of the sector’s strong fundamentals supported by the rise in e-commerce and robust demand for new assets.  

Our targeted investments in high-performing assets, strong alignment with strategic partners, and proactive approach to enhancing the local retail and logistics landscape reinforce our continued confidence in the Brazilian market.

An overview of our recent activity in Brazil was also featured in Bloomberg Línea. The article is accessible here (in Portuguese).

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