A recent study by Incorporating Plant points out that, despite the city of São Paulo having one of the largest real estate markets in the worldwith 28 thousand buildings and 1.4 million apartments — totaling an area of 190.4 million square meters —, much of its inventory is old and underused. This occurs especially in the center of the municipality, whose buildings have an average of 52 years of “validity”, compared to the total Brazilian average for the rest of the properties, which is 25 years. Based on this, the municipal government has promoted revitalization measures in order to enhance the urban and real estate development of the area.
Taking advantage of this scenario, real estate companies have been looking for homes in the center of São Paulo with high potential for appreciation and requalifying them. The name given to this process is retrofitwhich basically means a reform. Guil Blanche, founder of the real estate management company Planta, explains that the trend in the market is requalification with a change of use. “When these properties were built, they used a lot of materials, labor, energy and oil. The possibility of recycling them activates a property that was previously underused, also emitting 70% less polluting gases”.
In addition to reducing the carbon footprint, recycling homes instead of building new ones reduces energy consumption by up to 95%, according to the study carried out by Planta. This process is not only a solution to the high commercial vacancy rate — portions of a real estate investment that are not generating profitability — worsened by the pandemic, but also meets the growing demand for apartments for short and long-term rentals, as well as offering a more sustainable alternative.
“Normally, we give the property a new purpose. A project that was previously an office for lawyers can have its project reprogrammed to welcome new users, who are more suited to the contemporary lifestyle model”, comments Guil. The portfolio developed in the company's first phase includes seven buildings — ready or under development —totaling 520 residential units and 32 commercial units, with a total area of more than 38 thousand square meters. The Vila Buarque region is the real estate company's main focus, due to the gastronomic and cultural hub it has become.
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Of a total of approximately 100 buildings in the neighborhood visited by the Plant, 50 are under analysis, totaling more than 291 thousand square meters of private area, 2000 residential units and one Capex estimated total of 2.7 billion reais, with an estimated average Capex of 9500 reais per square meter and 65 stores. The institution aims to generate annual returns of at least 20% through rental income. “Our approach is to develop properties at relatively low costs, ensuring an attractive and quick financial return”, highlights the founder of Planta.
Part of its portfolio was recently sold to Brookfield, a global asset manager. With the acquisition, the manager becomes the owner of the Renata Sampaio Ferreira building, listed in 2012 by the Municipal Council for the Preservation of Historical, Cultural and Environmental Heritage of the City of São Paulo for its historical and architectural value. In 2023, it was requalified and its use changed: it stopped being corporate and became a residential, cultural and gastronomic complex. The project signed by Metro Arquitetos was awarded in the 4th edition of the Monocle Design Awards 2024.
