Leme: Benefiting from Pacification

By Mary Carroll, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Leme remains the understated neighborhood among the popular beach-side famous foursome of Zona Sul (South Zone); in the shadow of Copacabana, Ipanema and Lebon. Sharing the long stretch of sand with Copacabana, and banked behind by mountains and favelas, there has not been much room to grow in the past.

The unmistakable sense of tranquility in Leme is partly because the Metro subway doesn’t stop here, bringing less people to its streets. The main roadway to Centro – Avenida Princesa Isabel – turns on the border between Copacabana and Leme, creating a noticeable difference in traffic once it is cleared.

Certainly the biggest constraint to the neighborhood’s growth is the geography, being sandwiched between the ocean and Morro do Leme and Morro da Babilônia. And for generations, both of these steep hills have been the home for the favela communities of Babilônia and Chapéu Mangueira.

Now with the pacification of the communities, and the successful transformation following the arrival of the UPP (Police Pacification Units), these favelas have become more accessible, increasing the opportunities and property values in the whole area.

Juraj Vajda, Senior Manager at Lisetonga Hostel, saw a great opportunity to invest in a business while riding around Leme on his motorbike checking out property. Vadja says he was “looking for a place to set up a hostel. When we realized that this beautiful building with a white round tower, just across the street from FAETEC at the very bottom of Chapéu Mangueira was for sale, the decision was easy.”

“We knew immediately it was the right spot, both charming and romantic. When we spoke to the previous owners they explained that there were sailors in the family and the tower served to receive and send signals to the ships in the sea in Copacabana.” remembers Vajda.

The new sense of security in Leme, coupled with the massive real estate boom in recent years has driven prices up. Claudia Cruz, real estate agent at Sóimóveis, believes that buyers “lost out if they didn’t buy last year” or even better would have been three or four years ago, when a one bed apartment in Leme would have only cost R$100,000.

Cruz says “the people who we are selling the properties for are ringing up and asking for more money for their property, and the people are buying at these prices.”

Those in search of a one bed apartment at 50m², be it a holiday home or purely investment purposes, are looking at paying in and around R$495,000 – R$520,000. A two bed apartment (70m²) in Leme can be upwards of R$650,000. “To rent a one bedroom apartment in Leme, it costs around R$2,000 per month” says Cruz. “At the moment we have some three bed apartments for rent, they are going for R$5,000 a month.”

While real estate in Leme, Babilônia and Chapéu Mangueira show little sign of slowing, Brazil as a whole has not escaped the effects of the European financial crisis, and according to Agente Imóvel, in June and July “the aggregated real estate prices have started to slope downwards in the city of Rio de Janeiro … the market overall has cooled down substantially,” says owner and Swedish expatriate in Johan Jonsson.