The rise of the middle classes is a big demand driver behind the current boom in Brazilian property. Zona Norte in Natal, north east Brazil is an example of a new middle class district expanding because of this demand.
Natal, the capital of Rio Grande do Norte, is one of the fastest growing cities in north east Brazil. Within the city is the district of Zona Norte, a rapidly expanding suburb with huge opportunities for new businesses and Brazilian real estate investment.
Residential Demand Fuels Investment Opportunities
Zona Norte is home to around 37% of Natal’s population and the area has seen big migration over the last few years with over 300,000 Brazilians moving there. This migration in tandem with increasing purchasing power among the growing Brazilian middle classes has led to vast expansion of the suburb.
Essentially a residential area, Zona Norte is popular with Class C – the largest and fastest growing sector of Brazilian society – and Class D. This means the area meets criteria for investment in Brazilian social housing projects under the Minha Casa Minha Vida government programme. Obelisk International is one of the social housing developers in Zona Norte and is currently involved in a large Minha Casa Minha Vida project near the Lagoa Azul area.
“Along with big residential development, Zona Norte has seen a massive increase in the number of businesses and shops setting up in the area since 2007,” says Gary Hardacre, CEO of Obelisk International. “The two impulses – residential and commercial – mean Zona Norte is turning into the up-and-coming area in Natal, part of our reason for choosing it as a focal point for one of our Brazilian real estate investments,” he adds.
Massive Commercial Demand
Norte Shopping, the first large shopping mall in the region, was built in 2007. The success of Norte Shopping has been such that the mall is still growing. Expansion is due to continue until 2013 with a multi-screen cinema opening this autumn.
Alongside Norte Shopping are hypermarkets and megastores selling household appliances. But not all businesses are large scale in Zona Norte – dozens of small companies and shops have set up in the area to make the most of the investment opportunities offered by Zona Norte’s expanding population.
The combination of a growing middle class with increasing purchasing power plus the employment opportunities offered in the area make Zona Norte an extremely attractive location to open a new business in north east Brazil. According to the local small and medium business organisation Sebrae/RN, Zona Norte currently has the highest number of new business applications.
For Obelisk International, the expansion of Zona Norte powered by the growing middle classes illustrates the strength of demand for investment in Brazilian real estate from the local population. “This demand is real and tangible,” says Mr Hardacre, “and because of this, we believe the Zona Norte area represents excellent potential for Brazilian property investment.”
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