Argentine construction tycoon Jorge Pérez says real estate prices in São Paulo are ridiculously low

RIO DE JANEIRO, BRAZIL – Jorge Pérez, Argentine billionaire of Cuban-Spanish descent based in Miami, and president of ‘The Related Group’, intends to increase his investments in the real estate market in São Paulo.

As one of ‘Parque Global’ partners, which is being developed in São Paulo’s South Zone, Pérez will return to Brazil in October to develop more exceptional projects. With investments in the United States and Latin America, the businessman believes the sector will continue to grow in São Paulo’s capital in the coming years.

Parque Global has a general sales value (GSV) of R$11.5 (US$2.3) billion and includes five high-end residential towers, a shopping center, and health, education, and innovation complex. The residential portion accounts for R$2.5 billion of the GSV. Four of the five towers have already been commissioned, and the next one is scheduled to be unveiled within three months. By the end of the year, all residential buildings will be under construction.

“The market expects a luxury product, at a good price, with the safety and recreational amenities we offer. During the Covid 19 pandemic, the common areas became very important because people want to be outdoors, where the coronavirus transmission is lower,” says the entrepreneur.

According to him, the marketing of the first three residential towers reaches 90% and the fourth, 30%. “When the sale of the last tower we launched reaches 50% or 60%, we will present the fifth tower,” he says.

The businessman says that when he comes to Brazil in October, he wants to “celebrate the great success of the Parque Global.”

According to Pérez, given the high price of land and construction costs, there is a tendency for residential prices in the São Paulo market to go through a cycle of sharp increases, as has been the case in Miami, where the group is headquartered.

The margins achieved by The Related Group are under pressure in Brazil, but the businessman points out that property values are already rising.

Global Park’s next residential tower will come to the market with higher prices per square meter than the previous ones. “Real estate prices in São Paulo are ridiculous internationally, even compared to other Latin American markets like Mexico City and Buenos Aires,” says the businessman.

The values of the units are considered by Pérez to be favorable for buyers, even if the relationship between the prices and the salaries of the middle and high classes is established. “In a year or two, the current prices will seem extremely good,” he says.

Due to the need created by the pandemic, the partners of Parque Global have decided to expand the area of the apartments in the next tower. The units will range from 142 square meters to 330 square meters with “home office” space and air filters. “Previously, the units were between 10 and 15% smaller,” compares the businessman.

Pérez is investing in the Global Park through Related Brasil, which has The Related Group and Related Companies as majority partners. Related Brasil’s first project was the VHouse, a high-standard residential building.

Pérez’s next investments in Brazil may involve new partnerships with Bueno Netto. “There is no good business with a bad partner. It’s important to have good partners,” Perez says.

THE RELATED GROUP

The Related Group was launched in 1979 as a builder of affordable housing. Pérez teamed up with New York developer Stephen Ross in 1979 to start the company. Over the following decades, it expanded to developing mixed-use luxury condominiums, hotels, commercial spaces, and rental apartment buildings incorporating extensive amenities and museum-quality amenities into sophisticated living and working environments.

Pérez was an economic development director with the City of Miami before he entered the development business. The firm became the largest affordable housing builder in Florida by the middle of the decade and subsequently one of the largest multifamily, luxury residential developers in the Southeastern United States.

Related Group has built projects in Argentina, Brazil, Panama, Uruguay, and Mexico. The company has many completed skyscraper condo projects, including 50 Biscayne, Icon Brickell, Icon South Beach, Murano at Portofino, and Paraiso Bay.

In 2017, the company commenced work on a 400-unit luxury apartment project in Tampa, Florida, and plans to build more than 700 units in West Florida.

The Related Group opened an office in 2017 in Dallas with plans to build apartments in Las Vegas, Phoenix, and other major Texas markets. The Related Group opened Icon Midtown, a high-rise apartment in the Midtown section of Atlanta, in 2018.