In a strategic expansion, Melnick, the Porto Alegre-based real estate developer, has announced its entry into São Paulo’s competitive market. The company revealed its plans to NeoFeed on Wednesday, January 29th.
Melnick will partner with Even, its former shareholder, to develop a high-end condominium in Vila Madalena. The project boasts an impressive R$ 700 ($115) million General Sales Value (VGV).
It will feature 80 units, each spanning approximately 355 square meters. The development also promises a comprehensive leisure area for residents. This move marks Melnick’s first venture outside its home state of Rio Grande do Sul.
Leandro Melnick, the company’s CEO, explained the rationale behind this expansion. “Our market in Porto Alegre isn’t expanding. Growth in the city has become more challenging,” he stated. The company sees São Paulo as a natural progression for its growth strategy.
The partnership with Even takes a different form this time. Previously, Even held a 43% stake in Melnick following its 2020 IPO. Now, the collaboration is project-specific, facilitated by Melnick Partners.
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This subsidiary was created to form joint ventures with other developers. Melnick’s expansion isn’t limited to São Paulo. The company has already ventured into Santa Catarina and Paraná.
In December 2024, it announced a partnership with Müze for a project in Praia Brava de Itajaí. Curitiba also saw Melnick‘s entry with a R$ 190 million VGV project.
Melnick’s Evolution and Strategic Approach
The company’s history dates back to 1970 when Milton Melnick founded Melco. Leandro Melnick took over in the 1990s, professionalizing the business. In 2008, Melnick formed its initial partnership with Even, fueling growth in the high-end segment.
Melnick’s financial approach remains conservative. The company maintains a robust cash position and low leverage. Since 2020, it has distributed R$ 334.8 million in dividends. This strategy prioritizes profitability over rapid growth.
The market responded cautiously to the announcement. Melnick’s stock closed at R$ 3.65, down 0.82% on the day. Over the past 12 months, it has declined by 15.9%. The company’s current market value stands at R$ 753 million.
Leandro Melnick emphasizes that the company faces no pressure for growth. It will continue to pursue partnerships based on opportunities. This approach allows Melnick to maintain its focus on high-end, profitable projects.
The move into São Paulo represents a significant step for Melnick. It showcases the company’s ambition to expand while staying true to its core strengths.
In short, as Brazil’s real estate market evolves, Melnick’s strategy may set a new standard for regional developers seeking national prominence.