New concept boulevards on the target of investors
Valor Econômico
A new concept is attracting several types of investors to the real estate market: it is the convenience centers that replicate the American "one stop shop" concept. They are boulevards that gather, in the same address, banks, food courts, drugstores, dry cleaners and even small supermarkets with the purpose of saving the time in the lives of busy citizens with a single stop - preferably with an inviting parking spot. It is the real estate product that is on the radar of the American mega investor Sam Zell's Equity International. The investors' demand for this type of product has grown so much that, in March, Credit Suisse Hedging-Griffo launched a real estate investment fund structured with the income from the rental revenue of such undertakings.
The undertakings are erected on lands ranging from 1.5 thousand square meters up to 5 thousand square meters in privileged locations, preferably residential or near areas with large residential concentration. Its success is directly related to the mix of stores and to the number of parking spots - some land developers already build underground parking. "It is a faster alternative to the malls and they are safer and more convenient than a street store", says Marcos Saad, Director of REP Centros Comerciais, which belongs to the LDI group, on the market for 17 years. The company is a partner of Credit Suisse in real estate fund.
REP has 19 undertakings in operation and three other are under development, one in Lapa, one in Indaiatuba and another one in São José dos Campos. Even though the model has been developed in the large cities, according to Saad, it also works in the interior. "In cities with more than 300 thousand inhabitants, it is possible to invest in this type of product", he says. The company is also present in Jundiaí and São Bernardo do Campo. This year, according to the Executive, REP estimates growth of 300% in the gross rentable area.
"It is important to have at least two anchor stores to attract the transit of people to the other stores", says Guilherme Rossi, heir of the Rossi who has created his own company - GR Properties - and, besides logistics warehouses and offices, is investing in convenience centers. He is wrapping up the construction of an undertaking in Interlagos, which should be inaugurated at the end of June. With an area of one thousand square meters of gross rentable area and 60 parking spots, ha has already closed with McDonald´s. The next project, with seven thousand square meters will be erected in Souzas, district of Campinas. It will feature a supermarket, a restaurant and office suites above the stores - concept that is becoming increasingly more common in this type of undertaking.
Although it is attracting the attention of investors from different places and sizes and has gained the preference of the retailers - the condominium cost of a convenience center tends to be less than half of that of a shopping -, the model faces major challenges. It has to be located in a residential area - often higher class areas - where the price of the land is much higher and there is direct dispute with the residential land developers. "It has become a fad for everyone with money to invest in the real estate market, but there are risks", says the real estate consultant, Eduardo Preto. "They don't work on cheap land and, if that is too expensive, the numbers don't close", he says. The choice of location, with a lot of traffic and the nearness to stores, is also important.