Breaking all records for televised soccer matches in the US, the Brazil World Cup has redefined the sport for American audiences.
For international-minded investors, the event is also proving a turning point. “We knew nothing about Natal before we came here,” said Jim Loseley from Miami, one of 24,000 Americans who made the trip to support the US team in Natal, where they beat Ghana 2-1 watched by 11 million fans back home. He’s now looking for a holiday property and has been surprised at the opportunities.
Condominiums in the gated, beachfront Palm Springs development 20 minutes from the new international airport in Natal are on the market at $90,000. Investment rooms in a new five star Mercure Hotel in downtown Natal, currently under construction, are $160,000 upwards, with the prospect of fat returns as the city extends its current economic boom.
Natal has a population of just 800,000 but gets around 1.8 million visitors a year, drawn by the year round sun (just 18 days of rain), the 27 degree warmth and the endless beaches. The World Cup has prompted investment in better roads, water systems, town layout and tree planting programs, on top of the new airport and soccer stadium.
Americans of a certain vintage may enjoy the new World War II Museum opening in late 2014 celebrating the role of US forces in the conflict. Around 10,000 US troops were stationed in the Rampa garrison, described by President Roosevelt as the ‘trampoline to victory’, with air missions flying over to Europe and Africa.
Younger visitors enjoy roaring through the vast dune system on buggies, taking a zipwire down a 100 yard dune cliff into a lake, or drinking in Natal’s late night bars.
At the USA-Ghana match during the World Cup, Vice President Joe Biden was a prominent guest, turning up with his young relatives and chatting to local State Governor Rosalba Ciarlini. “He went to see the players in the changing room and seemed to know quite a few of them,” said Ciarlini. “He invited me to visit him in the US.”
Like most Brazilians, Ciarlini is football crazy (as well as medical doctor), so could help Biden understand the rules of soccer, should he need it. Biden had to apologise to his hosts after (like the US in World War II) turning up late to the match and missing the first goal – scored after just 27 seconds.
Liberal property ownership laws, a stable democracy, falling interest rates (compared with recent years), a policy of transferring wealth to the north of the country from the traditional affluent south, new airlines planning routes into Natal, a rising Brazilian middle class with high disposable income, a more welcoming regime for international investors and an enthusiasm among regional politicians to do business with private companies and the surge of optimism that has accompanied the World Cup… It could help make Natal a magnet for international investment.
“We’re seeing both Brazilian and overseas investors showing a lot of interest in new developments,” says Luiz Fernandes, CEO at Ritz Brazil (www.ritzproperty.com), which is developing Palm Springs and the Mercure Hotel in Natal. “Investors from Sao Paulo come up here and find that properties are a quarter of the price and there’s no traffic.”
According to a Forbes article from 2011, there were 19 Reis REIS +3.22% millionaires created every day in that year. Today that number is doubtless much higher, as disposable income continues to rise.
Brazil is on a winning streak.
David Nicholson, Forbes.com