Amid an uncomfortable inflationary pressure that shows no signs of cooling down anytime soon, economists have been gradually revising the projections for the Selic rate considered sufficient to contain the rise in prices.
In the last Focus report, experts estimate a rate of 8.75% at the end of this year, reaching 9.5% in 2022 — in January, estimates were 3.25% and 4.75%, respectively. —, and it is likely that new adjustments will occur after the increase of 1.5 percentage points by the Copom (Committee on Monetary Policy of the Central Bank), which took the Selic rate to 7.75%.
In addition to reducing the attractiveness of stocks on the Stock Exchange, the rise in interest rates, which rose even more in recent days due to uncertainties about the government’s fiscal policy, has had negative impacts on the real estate market.
After a drop of 10.2% last year due to restrictions imposed by social isolation, the Ifix, an index that brings together the main real estate funds, accumulates a devaluation close to 6.5% in 2021, until October 27th.
In the opinion of specialists working in the sector, despite the ongoing resumption allowed by vaccination, the constant revisions in the market projections for Selic, which ultimately reflect the uncertainty for the short-term scenario, have contributed to the performance erratic fundraising.
“What has somehow hindered the pricing in the secondary market of real estate funds is the lack of visibility on what the interest level will be in the coming months”, says Luis Stacchini, partner and co-director of real estate investments at the Navi manager.
“The big debate at the moment in the market today is to know where the Selic will end up”, endorses Carlos Martins, partner and manager of real estate funds at Kinea Investimentos, who expects the rate to stop at a level well above what the market initially expected.
In a context of rising interest rates on real estate financing, managers point out that some accommodation in the pace of expansion in the sector should be expected, mainly from the thousands of investors who entered the market recently.
Attracted by the tax exemption for individuals, the investor base in the real estate fund market jumped from approximately 650,000 at the end of 2019 to around 1.17 million in December last year, according to data from B3. In September 2021, the number had already approached the 1.5 million CPF mark.
For this mass in search of a periodic return, managers emphasize that, despite the challenging environment ahead, it is possible to find good opportunities for a diversified portfolio of real estate funds.
They cite those who invest in shopping malls, due to the perspective that the advance of vaccination will allow the gradual return of social activities, as well as the so-called paper real estate funds, which invest in CRIs (Certificates of Real Estate Receivables), indexed fixed-income private securities the IPCA (Extended National Consumer Price Index) or the CDI.
Stacchini says that about two months ago he built a position in the shopping mall sector within the portfolio of the fund of funds Navi Imobiliário Total Return, through funds dedicated to the thesis of managers HSI, XP Asset and Hedge Investments.
“The pricing of mall funds reached an exaggerated level and we understand that there is room for some recovery, as the dynamics normalizes”, he says.
Martins, from Kinea, also expects the resumption of shopping centers, which are already without limitation in opening hours and with reports of even greater movement than in the pre-pandemic period.
“This resumption will be captured by shopping mall funds, which will end up distributing more dividends,” he says.
He adds, however, that he sees paper funds with inflation-linked CRIs as the safest option at the moment, as prices are expected to remain under pressure.
“Until inflation starts to converge towards the target, CRIs funds that follow the IPCA will have a good performance”, says Martins.
Stacchini, from Navi, adds that, with the rise in Selic, funds that allocate a good part of their resources to certificates whose index is the CDI, such as CSHG RecebÃveis Imobiliários, should show an increasing payment of dividends over the next few months.
In the corporate sector, he says that he has concentrated his bets on logistics and retail funds, such as Succespar Varejo and Guardian LogÃstica, with long-term contracts indexed to inflation and large tenants such as the wholesale network AssaÃ, BRF and British American Tobacco.
On the other hand, in an environment of high interest rates and uncertainty about the new work model going forward, Stacchini claims to have a more cautious view in relation to corporate slab funds and commercial offices.
“These are funds that even seem cheap, but our assessment is that there are no triggers for a stronger performance looking to the short term”.
At RBR Asset, partner and manager Bruno Nardo states that the office and corporate slabs sector is currently the largest position within the portfolio of the RBR Alpha Multiestratégia fund of funds.
“We like excellent quality corporate properties in the best regions of São Paulo,” says Nardo. He highlights the Tellus Properties and CSHG Real Estate funds among those that best combine these characteristics.
According to the specialist, among the high-end buildings located near av. Faria Lima, the financial center in the west of São Paulo, the level of vacancy is close to zero, with rent prices having risen about 10% on average over the last 12 months.
Nardo adds that he has observed throughout the pandemic that many investors, especially individuals, sell shares of real estate funds out of fear that the work-at-home scheme would make the offices lose their function.
“But what we’ve seen in practice is a gradual return to the workplace,” he says.
He recognizes, however, that a more expressive valuation of the category should only occur when the risk premium offered by government bonds has some decompression.
“There is already a lot of bad news on prices, which doesn’t mean it can’t get worse. But looking at a post-election scenario, I’m optimistic about the appreciation of these assets.”
Martins, from Kinea, states that, before making an assessment of the best opportunities in the market, investors need to be clear about the investment horizon they have available to maintain their portfolio position, as well as their risk tolerance.
“Brick funds are not going to be able to surpass the return level of paper funds in the short term. But for an investor who is looking for the medium term, around three years, it may be an interesting time to buy shares of investment funds. very discounted corporate slabs,” says Martins.
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