Brazilians turn from buying property to invest in real estate trusts

For generations of Brazilians raised under the prospect of skyrocketing inflation and the forfeiture of savings accounts in the 1980s, purchasing a property to rent out in your golden years was seen as the ultimate retirement goal.

Fast-forward to 2020 and the prospect of a much more stable economy than the turbulent 1980s and the lowest benchmark interest rates of all time have once again kickstarted Brazilians’ dreams of becoming property moguls. As a result, Brazilian real estate investment trusts (FII, in Portuguese) are enjoying their heyday. 

The number of investors in these assets jumped from 121,000 in December 2017 to over a million in August 2020 — and 99 percent of them are retail investors, according to data from the B3 stock exchange. Such booming growth has attracted the attention of major players and, by the end of September, brokerage XP had its first FII Summit — a digital conference with some of the biggest fund managers to discuss the market prospects for these assets. 

Juliana Pedroza, the head of Investor Relations at Habitat Capital Partners credits this astounding popularity to a combination of factors: the lowest benchmark interest rates in history drew increased...