|Sam Zell Breaks Into Brazil Housing Arena Again, Acquires Stake in Local Builder Grupo Tha a 117-year regional homebuilder based in Curitiba located in south Brazil.|
Chicago entrepreneur Sam Zell surprised the international real estate community today with an announcement that his privately held Equity International company has acquired an equity interest in Grup Tha, a 117-year regional homebuilder based in Curitiba located in south Brazil.
The amount of Zell's stake was not disclosed in either dollars or percentage amount.
The Brazilian company was established in 1895 and is based in Parana state.
In August 2011, Equity International sold all of its shares in Brazilian home builder Gafisa (GFA).
In February of this year, Equity International and investment fund GP Investimentos made a joint offer to buy control of Gafisa but the Brazilian firm turned it down.
Zell's re-entry into Brazil's residential sector comes as the country cries for more affordable housing product. It needs at least 6,000 more new homes today, according to most international housing analysts. There is little competition in the specific area Grup Tha and Zell's company will be building.
Obviously pleased at the timing of the deal, Gary Garrabrant, chief executive officer of Equity International, says, "We are excited to begin the next chapter of homebuilding investment in Brazil.
"The regions of Brazil are vast and varied, further characterized by high growth and barriers to entry. The Thá Family has built a singular brand and reputation in southern Brazil and we are thrilled to join Grupo Thá as a significant shareholder."
Garrabrant says Equity International "looks forward to working with Thá's highly capable management team to realize the full potential of the Company's homebuilding and construction services businesses."
"We are honored to have EI as a strategic partner in Grupo Thá," said Sandro Westphal, chief executive officer of Grupo Thá.
"Equity International is recognized as a global investor with extensive experience in the homebuilding sector throughout Latin America, making them an ideal partner to help us grow and institutionalize our Company."
Grupo Thá is led by Westphal and Arsenio de Almeida Neto, chief operating officer.
Garrabrant and Vijay Jayaraman, EI's senior vice president of investments, will join the company's board of directors, which also includes Claudio Tolentino, Meritum Consultores Associados, representing the Thá Family.
A fourth-generation family owned business, Grupo Thá is a recognized brand across southern Brazil. The company's primary business is homebuilding, which is focused on the development of middle and upper-middle income residential projects in Paraná and Santa Catarina states with operations in Curitiba, Camboriú/Itajaí and Joinville.
Grupo Thá has two additional operating units: a national construction services platform that builds residential and commercial properties across Brazil primarily for third parties, and a residential real estate brokerage that provides marketing and sales services for the vompany and third parties.
In total, Grupo Thá has built and developed more than 2,000 projects comprising over 64 million square feet across a wide range of property types including residential, commercial, hospitality, retail, industrial, education and health care.
The Brazilian homebuilding sector remains attractive with a housing deficit of approximately six million units. This housing deficit, together with an increasingly populous and prosperous consumer class - since 2003, 40 million people in Brazil entered the middle class - is expected to fuel an increase in demand for housing for the foreseeable future.
The South Region of Brazil holds particular appeal due to its strong industrial and broader economic base that includes a highly educated population with high levels of disposable income.
Grupo Thá has a large, well-located land bank in key cities across southern Brazil. Along with its integrated real estate platform, this positions the company to capitalize on a growth opportunity in the home-building industry.