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News Release

Two decades evolving with the Brazilian real estate market


JLL is celebrating 20 years in Brazil. Present in various segments, JLL is today a leader in the Brazilian real estate market, has about 900 employees and operates on an almost nationwide basis from its headquarters in São Paulo and its regional offices.  In this interview to Panorama, CEO Fábio Maceira talks about the evolution of the Brazilian real estate market and the challenges and outlook for the coming years.

The Beginning

How was the start of JLL in Brazil?

We started through Compass Birmann—a company that would later be acquired by LaSalle Partners, which merged with Jones Lang Wootton—as property managers for office buildings. Three years later, we started operating in the transactions segment in order to meet the needs of our international corporate clients in their search for new offices, a warehouse or manufacturing facilities.  That’s how we started diversifying our business portfolio, which now includes facilities management, project and development management and construction, engineering and maintenance, consulting and advisory services, valuations, agency leasing and tenant representation, property sales and acquisitions, and consulting and advisory services for hotels. And recently, in late 2014, we brought into Brazil the design & build company Tétris.

What have been the most significant developments in the Brazilian real estate market over these 20 years?

Buildings evolved and so did how to be a building owner. I joined Jones Lang LaSalle in 1998 and came down to Brazil in 2001.  The local market was fledgling.  There were some 20 prime buildings in São Paulo and 3 or 4 in Rio de Janeiro.  On average, the buildings had 20 floors and 350 sqm floor plates.  Today, however, there are areas that are home to trophy buildings with floor plates as large as 2,500 sqm, and mixed-use developments comprising shopping malls, convenience areas and other facilities.  Twenty years ago, most of the buildings were multiowner.  There was no bank lending and no foreign investors.  A few local pension funds invested in the industry.  To construct a building, a developer—even in the case of corporate office buildings—had to pre sell floor by floor.  In short, today’s industry is much more professionalized.

How did this affect the market?

I recall the case of a client that occupied about 10 floors in a building owned by some 20 different owners. At lease renewal time, we had already negotiated with almost all of them, but we had to wait for the answer of one particular owner for literally one year, as the lease was not a priority for him.  Today, investors are increasingly sole owners of whole buildings.  Even if a building is owned by multiple owners, the control is exercised by a single entity, which may be a real estate fund or an SPE (when several investors team up in a venture).

Helping the market to evolve

How has JLL contributed to the development of the Brazilian market?

We pioneered the introduction of the ‘facilities manager’, who supervises the care of the internal spaces and infrastructure of medium and large sized corporations, and the ‘building manager’ figures, as before there was only the ‘resident manager’ role. As managers, we also changed the way of hiring service providers.  We are experts at making the best procurement decisions and managing contractors.   So, instead of buying labor, we buy services.

In transactions, we pioneered the releasing of market indicators, such as vacancy, rental price changes, etc. Today, we publish information about each of the corporate office buildings in the core areas of São Paulo, in addition to white papers with relevant market analysis.

Another new concept JLL introduced in Brazil is ‘project management’.   We started with a small group of people.  Today, we have a team of 50 project management professionals (PMPs) who work to ensure projects meet quality and safety standards and are delivered on time and within budget.  It’s a differentiated service in relation to competitors’ offerings of ‘construction management’.

Opportunities in sight

In relation to JLL’s international portfolio, are there opportunities to enhance the service portfolio in Brazil?

JLL has a strong presence in the residential markets in England, Asia and Australia. This is a sector that interests us in Brazil.  We will soon start managing residential buildings and intend to expand into the transactions market.  There are other service possibilities, such as investment banking—an advisory service to clients interested in taking a loan or refinancing their loan portfolio—, and investment fund management.  We expect to deepen market segmentation, as it is the case in mature markets, with the segments of healthcare, logistics, law firms and public institutions.

What are JLL’s differentiators in the Brazilian market?

We invest in technology and knowledge to provide the best service to clients. But there are some more important aspects.  For us, business ethics and observance of the laws and regulations prevailing in the country come first.  Our employees receive much information and training in this regard; a hotline is in place to enable communication of suspected improper conduct or corruption.  We only do business with clients who share those values and do not accept illegal practices.  We also invest in employee training and foster an open and transparent communication.  We adopt innovative practices that allow working remotely, and our new headquarters do not have private offices and cubicle walls, partitions and fixed workstations.  That way we foster collaboration and the exchange of experiences, including between generations.

Check our timeline:

http://www.jll.com.br/brazil/pt-br/sobre-a-empresa/historico