The entry of big investors definitely put lots of companies on the radar of the market. With an entire country to break while the large urban centers are saturated, the sector is touted as the next frontier for groups that work with construction.
While in big cities the shortage of land has made the square meter prices go up, the urbanization of peripheral areas gains momentum, stimulating the synergy between vertical and horizontal mergers with land urbanization projects.
The land urbanization(loteamentos) is undergoing a process of consolidation, and the opening of capital of companies in the sector is “inevitable, a matter of time,” in a move similar to what happened with the developers. With the recovery in demand in the property market after two decades of stagnation, companies are now taking their projects out of the drawer.
The opportunities for companies increase as the need for expansion of cities, either to the outskirts or neighboring municipalities in the same region, say experts and executives. The “loteadoras” also feature a large barrier to entry that reduce competition, unlike the traditional building incorporation. This is due to the complexity involved in the approval of projects. While the developers work only with local governments, based on a relatively common procedure, the approval of a subdivision follows specific rules from various government organs.
With information from O Estadao.
An example of a loteamento in Brazil