Real estate funds have declined by up to 40% in the year, and only three are positive; see balance | Real Estate Funds

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Real estate investment funds (FII) continue to record heavy losses in 2020, despite the cooling of the new cases of covid-19 and the economic recovery, and although devaluations have decreased considerably compared to the peak months of the pandemic.

According to a survey by investment search engine Yubb based on the 81 funds that make up the IFIX, B3 index known as “the real estate fund Ibovespa”, only five FIIs did not record losses in the accumulated of 2020, and only three went from zero to the positive ground.

The best performing fundCSHG Prime Offices, managed by Credit Suisse Hedging-Griffo – rose just 1.15%. It is less than the 2.28% that the CDI earned in the period, the benchmark for savings, fixed income investment considered as conservative as possible.

But, remember, real estate funds are income tax exempt investments, which helps to keep this alternative on investors’ radar.

At the other end, some funds currently lose more than 40% of the quota value, in the comparison between January 1st and October 8th. The product that fell the most – Bradesco Carteira Imobiliária Ativa – lost 43.51% in value in the period. And, in the list of the ten funds that lost the most, all fell below 30%.

The main reason for the negative scenario is the uncertainties that remain about social isolation as part of the fight against the new coronavirus pandemic.

Check out the ten IFIX funds that fell the most so far in 2020:

Top 10 casualties among IFIX FIIs in 2020

TickerReal estate fundProfitability
1BCIA11Bradesco Active Real Estate Portfolio-43,51%
2FLMA11Continental Square Faria Lima-38,90%
3PATC11Homeland Corporate Buildings-37,85%
4XPIN11XP Industrial-35,17%
5BPFF11Brazil Plural Absolute-34,89%
6HTMX11Hotel Maxinvest-34,76%
7RCRB11Rio Bravo Corporate Income-34,48%
8RBFF11Rio Bravo IFIX-33,61%
9SDIL11SDI Logística Rio-31,78%
10RNGO11Black river-30,74%

And here are the ten IFIX funds that performed best between January 1st and October 8th:

The top 10 performances among IFIX FIIs in 2020

TickerReal estate fundProfitability
1HGPO11CSHG Prime Offices1,15%
2VTLT11Votorantim Logistics0,88%
3GTWR11Green Towers0,60%
4SARE11Santander Rental Income0%
5XPSF11XP Selection0%
6GGRC11GGR Copevi Renda-0,04%
7HABT11Habitat II-1,06%
8MFII11Real Estate Development Merit I-1,73%
9IRDM11Iridium Real Estate Receivables-2,79%
10RECR11Real Estate Receivables-4,03%

According to Bernardo Pascowitch, CEO and founder of Yubb, the preponderance of “brick” funds – as the products that invest in real estate, already built and functional – are called attention, among those with the greatest losses.

The strategy, in this case, is to make it possible for these properties to generate more income, usually via rents; tenants’ payments remunerate initial investments and generate returns to FII shareholders.

In detail, he says, the products that invest in corporate slabs seem to have suffered more, in line with the growth in the adoption of remote work (“home office”) after the pandemic.

“Despite being one of the favorite sectors of Brazilians who like to invest in real estate funds, corporate slabs are being directly affected due to the instability of the economic recovery. Companies are still afraid to return to their physical spaces, and many have already adapted so much to the ‘home office’ that they no longer see use in renting large buildings to work ”, says Pascowitch.

But he sees signs of improvement in the segment’s outlook. “In May, we made this same comparison about the situation of real estate funds during the year, and it presented a different reality from what we see today. The falls reached more than 60%. The economy is recovering, little by little, with due caution ”, comments the Yubb CEO.

On the other hand, he points out, funds with assets in Brazilian states that stimulated the face-to-face return to work managed to escape the tendency to fall sharply.

Pascowitch also highlights a perception of improvement in the subsegment of funds invested in shopping center assets. “Today, most of these establishments are already in operation, fully adapted to current health conditions. This means a commercial resumption, which directly affects quotas. No wonder, none of the funds corresponding to this segment appear in the ranking [das dez maiores perdas]”.

— Foto: Getty Images

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