Saturday, January 12, 2008

Ponto Frio Completes $62 Million Sale Leaseback of Four Distribution Centers in Brazil

Gazeta Mercantil - January 9, 2008

Bracor real estate investment company bought four distribution centers (CDs) of Globex Utilidades - which controls the retail chain Ponto Frio - for R$109 million.

The operation was carried out through the sale-leaseback system, in which the owner sells the real estate and rents it by means of long-term contracts. In this case, the rent contract closed between Bracor and Globex has an initial term of 180 months or 15 years, renewable for the same period. The CDs purchased by Bracor are located in Guarulhos (São Paulo), Irajá (Rio de Janeiro), Brasília (Federal District) and Goiânia (Goiás).

'It is a trend that has been growing every year in Brazil,' observed Ricardo Betancourt, director of Colliers International no Brasil, a Canadian consulting company specialized in administering real estate properties. He noted the maturing among companies of the concept of focusing investments on primary activities and not immobilizing capital. 'In the United States and Europe, only 20% of companies own their own buildings. Here approximately 80% of them do,' he said.

Another indicator of the expanding practice is the length of the contract, 180 months, renewable for equal and successive periods. 'That's equivalent to 15 years. Until recently, contracts were not closed for periods of more than ten years,' said Betancourt. The stability of the economy has contributed positively to this trend. Sphere: Related Content

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