Zell Ready to Invest $500 Million in Brazil, China and Vietnam Properties

Zell Ready to Invest $500 Million in Brazil, China and Vietnam Properties

Commercial News » Commercial Real Estate Edition | By Kevin Brass | May 26, 2010 8:00 AM ET

Billionaire investor Sam Zell may not know the media game -- evidenced by his disastrous ownership of the Tribune Company -- but he's still a master of real estate, with his every move closely tracked. And these days Zell is focusing on Brazil.

This past week Zell's Equity International announced plans to raise $500 million to invest in overseas property, with as much as two-thirds earmarked for South America's largest economy. The fund will focus on Brazilian companies tied to both residential and commercial, according to Equity co-founder Gary Garrabrant.

"Our enthusiasm for Brazil could not be higher," Garrabrant told Bloomberg. "You've got this local demand that's unparalleled."

Growing income levels and a blossoming economy will help offset rising interest rates, Garrabrant said. Brazilian property companies are well-positioned compared to "overvalued" U.S. companies, he said.

Equity recently sold part of its stake in Gafisa SA, Brazil's second-largest home builder, but Garrabrant said it was part of Zell's normal investment cycle.

"This is, for 10 years, what we do: we invest in businesses," he told Bloomberg. "And then at appropriate points in time we'll monetize our position. It doesn't mean we have any less enthusiasm for Gafisa."

In addition to Brazil, Zell's firm is looking at China and "frontier markets," including Vietnam, Indonesia and Morocco, the news service reports. But is has sold interests in Ukraine and Venezuela because of "political risk," Garrabrant said.


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