A new type of tenant is racing to rent luxury penthouses and mansions in high-end neighborhoods in Sao Paulo, Brazil's richest city: young tech entrepreneurs.
After a year of booming equity offerings and record venture capital investment in startups in Latin America's biggest nation, the newly rich now are trading up for better digs. Many are willing to pay more than top executives from multinational corporations, the more traditional tenants for such properties.
One owner of a digital company in his 30s rented a penthouse close to Ibirapuera Park, Sao Paulo's equivalent of New York's Central Park, for 110,000 reais (US$21,000) a month, including taxes and furniture, according to Amir Makansi, chief executive officer of Anglo Americana Consultoria de Imoveis SA, a boutique brokerage that specializes in upscale properties.
Other examples include a mansion in the Jardim Paulistano neighborhood that three 20-something founders of a tech startup rented for 75,000 reais a month, Makansi said. Another property in the swank Vila Nova Conceicao neighborhood goes for 52,000 reais a month.
Venture capitalists invested about 46.5 billion reais in Brazilian startups last year, more than three times what they did in 2020, according to ABVCAP, the industry association. Tech companies and their shareholders raised about 13.3 billion reais in public stock offerings in 2021, after raising 14.7 billion reais in 2020, data compiled by Bloomberg show.
Rents in Sao Paulo fell 0.9 per cent last year, according to the FipeZap index, which includes prices as high as 58.40 reais per square meter. At Anglo Americana properties, rents are as high as 150 reais to 200 reais per square meter, and were stable during 2021, Makansi said.
"Since Brazil improved levels of vaccination against Covid-19, the market became hot again in the second half of 2021, with many foreigners from big international companies coming to Sao Paulo to rent houses, penthouses and apartments," Makansi said, adding that those costumers are agreeing to pay rents from 25,000 reais to 30,000 reais a month. They also put up with heavy paperwork and months of waiting in order to close a deal, he said.
Tech entrepreneurs tend to be quicker, renting properties in about two weeks, according to Fernando Bigi Makansi, Amir's son and a partner at Anglo Americana.
"Traditional property owners who are used to dealing with older executives from big global firms sometimes are more conservative and get leery about younger Brazilian tenants, but they will need to adapt," he said. - Bloomberg
