BRAZIL Law and Practice Contributed by: Alberto Malta, Davi Ory, Ana Vogado and Maria Eduarda Amaral, Malta Advogados
in São Paulo, showed recovery, supported by increased formal employment. Hospitality con - tinued to rebound, boosted by resumed travel and PERSE (the COVID-19 pandemic recovery programme). Capital markets responded to rising construction costs with increased issuance of CRIs, which grew 21.6% in volume and 35.3% in transac - tions. FIIs faced volatility during this period, but there is a trend toward recovery driven by the expectation of future stabilisation of SELIC and the appreciation of rental income, supported by rising construction costs and the value of strate - gic land in major urban centres, which is a posi - tive indicator for long-term investors. In logistics, e-commerce and supply chain mod - ernisation drove record activity. In 2024, São Paulo’s logistics hub saw net absorption of 1.3 million square metres (up 18% from 2023), with a decade-low vacancy rate of 7.7%. In a complex macroeconomic scenario, block - chain and fintech have opened new paths for innovation in Brazil’s real estate sector. Smart contracts have streamlined payments and guar - antees, while tokenisation has improved asset liquidity and efficiency. The Brazilian Securities and Exchange Commission (the Comissão de Valores Mobiliários or CVM) has clarified that tokens representing property rights or receiva - bles may qualify as securities, subject to capital markets regulation. The proptech ecosystem now includes over 1,200 companies applying big data, geoloca - tion, virtual reality and blockchain to transac - tions. Platforms like QuintoAndar and Loft have enhanced digital contracting and credit analy - sis, while fintechs explore models such as home equity and crowdfunding. Notably, aMORA
raised BRL40 million via a CRI, using a model that allows property use before purchase. Regulatory advancements, including the CVM’s sandbox for tokenised CRIs, have promoted innovation and broadened access to alternative funding. Adaptive reuse of commercial proper - ties, encouraged by programmes like Reviver Centro (Rio) and Requalifica Centro (São Paulo) have gained traction through tax and zoning incentives. Institutional investors have increased their expo - sure via FIIs and CRIs. To navigate high interest rates, developers have offered discounts, sub - sidised rates and direct financing. Investment decisions in the commercial sector continue to reflect monetary policy trends, with real estate returns assessed against public bond yields. The Legal Framework for Guarantees ( Marco Legal das Garantias ) has strengthened the credit system, expedited out-of-court mort - gage enforcement and allowed multiple assets to back a single loan. Meanwhile, home equity solutions have expanded, offering competitive credit alternatives linked to property value, help - ing mitigate interest rate impacts. 1.3 Proposals for Reform Legislative proposals are also advancing in land use, environmental licensing and land regu - larisation. PL No 2159/2021 (formerly PL No 3729/2004) seeks to establish a General Environ - mental Licensing Law, with standardised rules and broader exemptions. PLs No 2633/2020 and No 510/2021 aim to simplify land legalisation on federal lands, introducing self-declaration, waiv - ing INCRA inspections and extending deadlines. In urban areas, PL No 1436/2023 intends to streamline the conversion of possession legiti - misation into formal title deeds.
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