Brookfield Creates $700 Million Brazil Property Fund
By Telma Marotto and Daniel Taub
Sept. 8 (Bloomberg) -- Brookfield Asset Management Inc., which owns $50 billion of property on three continents, created a real estate fund to buy shopping centers in Brazil, where rising incomes are providing a boost to retailers.
The fund has more than $700 million of commitments, $200 million of that from Brookfield and the rest from four institutional investors, Brookfield said today in a statement. George Myhal, managing partner at Toronto-based Brookfield, declined to name the other investors.
``There is a growing middle class in Brazil, and the shopping center industry in Brazil is highly fragmented,'' Myhal said in an interview. ``There are very few shopping centers that are owned by the same organizations, unlike in North America, and we believe there is an attractive opportunity to consolidate the industry.''
Brazilian retail sales grew by 5.3 percent in the 12 months through June, and household monthly income adjusted for inflation rose 3.4 percent in July from a year earlier. Brazil's government expects the economy to expand by 4 percent to 4.5 percent this year, faster than last year's growth of 2.3 percent.
Property sales in Sao Paulo, Brazil's largest city, rose to a five-year high last year, according to the city's real estate association.
Brookfield shares fell 58 cents to $43.99 as of 3:03 p.m. in New York Stock Exchange composite trading. They have gained 31 percent this year, more than the 4 percent rise in the Standard & Poor's 500 Index.
Brookfield Asset Management has a 50 percent stake in New York-based Brookfield Properties Inc., owner of the World Financial Center. Brookfield Asset Management was formerly known as Brascan Corp., a name that came from its early investments in Brazil. The company was known as Brazilian-Canadian Traction Co. in the early 20th century, when it built the electricity, light and streetcar systems of Rio de Janeiro and Sao Paulo. It was forced to sell the Brazilian power assets in the 1970s.
To contact the reporters on this story: Telma Marotto in Sao Paulo at Tmarotto1@bloomberg.net ; Daniel Taub in Los Angeles at dtaub@bloomberg.net . |
