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Zell ready to get involved in financing real estate development in Brazil

Zell, who declared a couple of months ago that Brazil is the 'number one country in the world for investments, is looking for a partner for his Equity International real estate investment company with a view to grow Brazil's 'still nascent' real estate financing market.

The company's, chief strategic officer Thomas McDonald confirmed that the move is on the cards and added that it may open its own company to provide financing to real estate developers.

Zell, regarded as one of the wisest voices in the global real estate industry, has spoken extensively about the benefits of investing in real estate in Brazil. He has pointed out that it is a country with a shortage of affordable housing and infrastructures that support foreign investment.

He said recently that Brazil is self-sufficient, has a strong pool of skilled professionals and otherwise unlimited resources. It also offers scale, he said, and described how Equity International-owned malls have seen 12% growth over the past year.

'If you look at all of the facts, I don't think there is a better environment in all the world than Brazil,' said Zell, who has also suggested that the country could surpass China in economic might in 30 years.

McDonald said that a 5% cut in Brazil's Selic interest rate this year to 8.75% and a $18 billion housing stimulus plan announced by the government in March have boosted demand for residential and commercial real estate investments.

'Real estate specialty financing is a sector that is still nascent in Brazil and there are opportunities here that aren't being met in a scalable way. We haven't yet found the right platform to do that. At some point we'll find the right one or we'll create it ourselves,' he declared.

'Real estate financing in Brazil is tenant-based, depending on the quality of the tenant, rather than the quality of the property. The banks have to get an understanding of real estate and look beyond the tenant. We'd love to help jumpstart that,' he added.