According to the recent report, BBA's current selection has a current dividend yield of 10%. (Image: Leung Cho Pan/ Canva Pro)
O Itaú BBA remains optimistic about the real estate market in the medium and long term, even with the rise in the Selic rate on the radar. For the month of October, the bank chose not to change its recommended portfolio of real estate funds (FII).
According to the recent report, the current BBA selection has a performance of dividends 10% current. This corresponds to a premium of 3.62 percentage points (pp) over the Treasury IPCA+ 2035, and below the weighted average of the dividend yield of IFIX, which is at 10.8%.
The real estate investment fund index (Ifix) closed September in the opposite direction of last month and marked the worst month of the year with a drop of 2.58%, accumulating a devaluation of 0.16% for the year. The BBA portfolio, in turn, fell 3.08% in the month, but will increase 1.29% in 2024.
In September, the highlight at Ifix were financial asset funds with an average drop of 1.7%, while funds that carry fixed income assets in the portfolio, and logistics funds fell 2.2%. Both were the only sectors to show a performance above the index for the year.
The real estate market
BBA analysts Larissa Nappo and Rebecca Nossig, who wrote the report, highlight the month's beginning of a new cycle of rising Brazilian interest rates. The Monetary Policy Committee (Copom) announced a 0.25% increase in the Selic rate, which rose to 10.75%.
As a result, inflation-indexed securities that offered IPCA +6.2% (Treasury IPCA+ 2035) at the end of August now, at the end of September, offer IPCA +6.39%. “This movement significantly harms the performance of real estate funds”, they explain.
Analysts also remember that the house's economic team had already revised Selic projections to 11.75% at the end of 2024, with an additional increase in January 2025, reaching a terminal level of 12.00%. For 2025, the BBA's projection is that the Selic rate will end the year at 11.00%.
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“With the start of the rising interest rate cycle, funds that invest in bricks are the most affected in this scenario”, say the professionals. “The downward movement seen in September is already starting to present opportunities for long-term positioning, which does not mean that we have reached the bottom.”
For the coming months, Nappo and Nossig estimate that financial asset funds should still continue to lead gains.
See 12 FIIS to invest in August
| Bottom | Ticker | Weight | DY (annualized) |
|---|---|---|---|
| HSI Malls | HSML11 | 7,5% | 10,4% |
| Bresco Logistics | BRCO11 | 7,5% | 9,4% |
| VBI Logistics | LVBI11 | 7,5% | 9,2% |
| Kinea Real Estate Income | KNRI11 | 7,5% | 8,6% |
| CSHG Real Estate Receivables | HGCR11 | 10% | 11,2% |
| CSHG Renda Urbana | HGRU11 | 7,5% | — |
| XP Malls | XPML11 | 7,5% | 10,3% |
| VBI Prime Properties | PVBI11 | 8,5% | 7,8% |
| RBR Properties | RBRP11 | 6,5% | 12,3% |
| Kinea Price Indices | KNIP11 | 10% | 9,7% |
| Kinea Real Estate Income | KNCR11 | 10% | 10,7% |
| Kinea High Yield CRI | KNHY11 | 10% | 11,6% |