This is a site of 96 smaller family apartments and is predominantly 2-bedroom apartments for first time buyers, under the Caixa Scheme, in the flourishing suburb of Piabeta.
The location and local market
The town is growing rapidly as a dormitory suburb of Aracaju for lower income families working in the City. There is extensive development in the growing dormitory town and sales take-up of apartments is rapid.
The City has grown by 20% in the last 18 months, as new jobs are created in Aracaju due to the expanding oil, raw material and tourism businesses. The Strategic Plan foresaw this development and these first time buyers are typically buying in Piabeta, which accounts for its popularity.
We have entered into a joint venture with both the site owner and our main joint venture partner, who has been a developer and land owner in Aracaju for over 30 years. We expect this project to be completed by late 2013.
This site has been acquired and the joint venture agreed. The architectural master plan and detailed scheme have been designed, and application for Planning Permission was made in November 2011. Planning application in Brazil is very different from the UK, the Government wants new housing built as quickly as possible, so although the technical requirements are rigorous, the presumption is that applications will be accepted, and the vast majority of applications are. We have had preliminary approval and the formal application is in process, with a positive result expected in the first few months of 2012, immediately after which marketing and sales will then start.
Development in this rapidly growing suburb is extensive and the rate of sales is fast. We have entered into a very advantageous land purchase deal with the land owner and we project a return on our net investment in excess of 40% per year.