Spanish and Portuguese developers who rushed to build mega projects in Brazil are coming unstuck as ambitious coastal developments are thwarted by conservation concerns.
Strict regional environment are becoming increasingly protective of the country’s natural resources and big developers have also been hit by lack of funds. There are an increasing number of developments being delayed and even shelved, it is claimed.
One Spanish developer that wanted to build a golf resort with thousands of homes on beachfront land was thwarted by IDEMA, Rio Grande do Norte’s environment agency. It became apparent that provision for sewerage and water was inadequate and the sand dunes were protected so a planning licence was refused. The developer is now in receivership.
‘Agents and investors alike have been seduced by the ambitious coastal developments with their slick advertising campaigns and tempting pre-release pricing, but many, although by no means all, are falling by the wayside leaving some investors unstuck,’ explained Samantha Gore, Sales & Marketing Director for specialist Brazil agents uv10 which specialises in smaller developments that are more sustainable.
She also reckons that some developers didn’t take into account the concerns of a country that is increasingly sensitive about its environment. ‘Some developers will conduct pre-release sales whilst they await the results of independent environmental assessment but fail to realise how fiercely protective Brazil is of its natural resources and beauty,’ said Gore.
‘Many large ambitious projects are difficult to get off the ground and to sustain, particularly in today’s challenging economic times. Boutique projects require less funding and are often privately built. You can get to know the developer by name and establish a relationship based on trust and ease of communication. Additionally, the lower the environmental impact and need for large scale new infrastructure, the more likely the development is to be approved,’ Gore explained.
She also cautions potential buyers to ask the estate agent if they have actually visited the projects they are selling. ‘A worrying amount still sell blind. A site visit will soon determine whether the low entry pricing is due to cheap land picked up in an undesirable location or whether the creative team has been merrily airbrushing out towns or sprucing up beaches. Similarly the estate agent will be able to identify the nearest town, transport connections and other essential infrastructure to give an investment longevity and profitability,’ she added.