Week 4 Sao Paulo

This week was a great week because I visited two different companies and talked with them about a different aspect of the real estate market, housing. I learned much regarding the credit system and Brazil’s movement toward making housing more affordable. I learned of a major program created by the Lula administration called Minha Casa Minha Vida (My House My Life). This program is intended to provide subsidies and tax breaks for those families who make up to 10 times the minimum wage. This creates a great opportunity for homebuilder and those families looking to buy a home. I talked with two major companies, Gafisa and Itau Bank, to get an idea as to what this project entails. Itau Bank gave me great insight into future projections of the real estate market. Working with both companies gave me great insight into the housing market. My previous internship focused on the smaller shopping centers. This was a great opportunity to learn about residential real estate market.

I also had the opportunity to work at Shopping Metro Santa Cruz Mall. The mall is exactly the type of mall I wanted to study while I was down here. This mall focuses on the B and C class incomes and works to create a safe a memorable experience for its clients. The mall location is perfect because it is located above a subway station and is adjacent to a bus station. This mall is 100% owned by BR Malls and is has the 3rd largest NOI/m2 (indicator of profitability for the mall). This reveals that focusing on the emerging middle class can lead to a very profitable business. In my report I plan on making comparisons from all the malls I visit with a special focus on malls like this one.

Aside from work, I have been enjoying Sao Paulo. Today I was able to take a tour of the city and learn about the history and development of Sao Paulo. I was able to visit the business center on Paulista Av. and see the Bovespa exchange. The most interesting experience, for me, was seeing the Central Church. When I walked in I could feel the history. The choir was singing and the room was filled with people. I also saw different income areas of Sao Paulo. I was able to visit the wealthiest parts of the region and also drive past some of the Favelas. It was very interesting to see the difference between the two areas. The upscale areas were in gated communities that were comparable to nicest houses in the United States. The favela areas were poorly kept and the infrastructure looked old. The favelas did not look like were in good enough shape to provide satisfactory living conditions. I hope to further analyze how the government is working to make better housing establishments for these people.