Memorandum of Investments Vetor Norte
Transcrição
Memorandum of Investments Vetor Norte
Memorandum of Investments Vetor Norte Memorandum of Investments Vetor Norte September, 2013 Disclaimer _____________________________________________________________________________________________ 1. The present document, Memorandum of Investments, was produced by Investor Consulting Partners (“Investor”), under Mrs. Júlia Caiado and Mr. Eder Campos’ request, representatives of Vetor Norte Developers Association (AV Norte) for development of a report aimed at the promotion of the investment opportunities available in the region of Vetor Norte. 2. Information presented in this document was obtained from reliable sources until September 30th, 2013. 3. Investor did not carry out an independent review of the data collected, thus cannot vouch for its accuracy or authenticity, nor guarantee the occurrence of the forecasts presented hereby. 4. Investor declares that it does not hold any inside information regarding Vetor Norte, neither have any shares, stocks, any type of participation in the businesses of the region, nor any type of information that could compromise Investor’s impartiality in the development of this Memorandum. All costs regarding the development of this document were supported by AV Norte. ________________________________________ Lucas Vidigal Technical Director Investor Consulting Partners Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 - www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 1 Table of Contents I – Introduction to the Memorandum .........................................................................................................2 II – Business Environment in Brazil ..........................................................................................................3 2.1 Introduction ........................................................................................................................................... 3 2.2 Economic Indicators ............................................................................................................................... 4 2.3 Relevant Sectors .................................................................................................................................... 9 III – The Vetor Norte ...............................................................................................................................23 3.1 Introduction ......................................................................................................................................... 23 3.2 Economic Environment Overview ......................................................................................................... 32 3.3 Developments and Opportunities ......................................................................................................... 34 IV – Investor C.P.’s Opinion....................................................................................................................69 Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 2 I – Introduction to the Memorandum The present document, Memorandum of Investments, was produced by Investor Consulting Partners (“Investor”), according to Vetor Norte Developers Association’s request for development of a report that compiles all information available about investment opportunities in the region of Vetor Norte of Metropolitan Region of Belo Horizonte, as well as all the projects that have been finished or are already in progress. Vetor Norte is one of the regions included in the Director Plan of Integrated Development (PDDI) of Government of Minas Gerais, which was created to enable the planned development of the Metropolitan Region of Belo Horizonte (RMBH). Among the regions laid down in the PDDI, Vetor Norte is certainly the one which has most received investments from the State Government in the last years, including some major works such as “Linha Verde”, Administrative City and refurbishments made in the Tancredo Neves International Airport (AITN). According to the PDDI, each vector must receive incentives to achieve sustainable development of its economy in relation to its own peculiarities. In this way, cities will become regional hubs, attracting people and investments from neighboring municipalities. The main axis of development for Vetor Norte is AITN and the fulfilment of a new project: the Aerotropolis. This concept, developed by John Kasarda – renowned consultant of the aviation sector – consists basically in the construction of a metropolis surrounding an international airport, acting as its main social and economic development propeller. In order to demonstrate in which stage of development Vetor Norte currently is, several researches were made alongside the Government of Minas Gerais, national and international research institutes and private companies. The data collected were then analyzed and processed to be included in this Memorandum. However, Investor Consulting Partners did not carry out any independent reviews of the data collected, thus cannot vouch for its accuracy or authenticity, nor guarantee the occurrence of the forecasts presented hereby. The first section of this report describes the Brazilian economic context and the macroeconomic scenario in which Vetor Norte is inserted. The analysis includes some of the country’s main economic indicators, such as inflation rate, basic interest rate, unemployment levels and exchange rate, among others. The second section is dedicated to a deeper analysis of Vetor Norte and the most relevant aspects of each of the cities located in the area, as well as its most representative endeavors by sector. Finally, when analyzing the Memorandum, it is possible to understand the plans for Vetor Norte made by the State Government and its entire economic potential for the region, as well as to compare what has already been done. In one hand, it is evident that many large companies and high profile projects are already established in the region, from different economic sectors. In the other hand, bearing in mind the government’s plans for the region, the economic potential has scarcely begun to be explored by the private initiative. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 3 II – Business Environment in Brazil 2.1 Introduction The indicators of economic activity, in the first months of 2013, highlighted a scenario of moderated growth, which has been observed since the second term of 2012. The Gross Domestic Product (GDP) growth rate of 0.6% in the first quarter of the year, compared to last year’s fourth quarter, was below expectations. However, the second quarter’s performance has already reflected the country’s economic activity recovery, with a GDP growth rate of 1.5% versus the first quarter of the year, exceeding market expectations and promoting a better scenario for companies and consumers for the year. Some specific aspects, such as a favorable environment and depreciated exchange rate, boosted a recovery of agricultural and industrial production in the end of the second term, reducing the economy’s dependence from the third sector. From the demand perspective, investments were more relevant than government’s expenditures and families’ consumption. This positive scenario is reinforced by a growth of productivity and the labor market situation, in which the unemployment rate has reached one of its lowest levels in the recent history and the value of salaries are still growing above the inflation, even with a decline in the generation of new job positions. GDP’s growth, in the first term of 2013, was focused on investment, with an increase of 6.0% in contrast to a moderated growth of families and government’s consumption (2.2% and 1.3% of increase, respectively). The external sector contributed negatively to these numbers, with an increase in the number of imports versus a stabilization of exports. Some industrial performance indicators point to an upcoming expansion at moderate levels and still subject to fluctuations over the year, but with a positive tendency. The industrial production accumulates growth of 1.6% in the period between January and April, regards to the same period last year, with expansion of the transformation industry of 2.1%, according to the Applied Economics Research Institute (IPEA). The general industry indicator was not the best expected due to retraction of 6.5% in the mineral extraction industry, reflected mainly by a drop in oil production. This event is expected not to happen again from now on. It is particularly marked by the performance of capital goods, which the production had a 13.4% rise from January to April. These numbers, however, must be analyzed with caution, considering the atypically low basis for comparison. The current situation is far from representing any immediate risk to the external balance, considering the maintenance of bulky capital influxes, sufficient enough to finance the deficit, as well as taking into consideration the huge amount of accumulated reserves. In this sense, the recent movement towards depreciation of the Brazilian Real (BRL) versus the American Dollar (USD) reflects changes made by international investors in their portfolio allocation. These changes were mainly guided by a possible modification in USA’s monetary policy, which has already been signaled by FED and early priced by the market, causing impact on currency quotations all around the world. In relation to the forecasts, there are divergences between the “official” scenarios and those set out by the main Market analysts. For these, exchange rate is expected to remain in a depreciated level in the short term (until the end of 2013), at around BRL/USD 2.25. In the long term, however, the difference in productivity between the two economies stimulates the depreciation of BRL versus USD. As for the official inflation rate, analysts’ projections point to an IPCA closer to 6.0% per year in 2013 and a bit better in 2014. Moreover, according to the Market, unemployment rate is set to remain stable, with a decrease in the creation of jobs during the second term of 2013. In general terms, it is believed that Brazilian economy performance will have some little increase in 2014 versus the previous year, in line with global economy recovery, especially in the United States, European Union and China. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 4 2.2 Economic Indicators GDP: Brazil’s GDP expansion will be stronger starting in the second term of 2013 and throughout the whole year of 2014, accompanied by possible improvements in the international economy. According to the Focus Report, published by Central Bank of Brazil (BACEN) on August 23rd, 2013, GDP is expected to grow 2.21% in 2013, compared to the previous year. For 2014, growth expectations are of 2.50%, boosted mainly by domestic demand. GDP breakdown by industry 5,2% 26,3% 68,5% Generally speaking, growth of the emerging countries will be higher than of developed ones until the end of the decade. This more representative internal expansion requires a significant recovery of investments, which decreased during 2012, and which will only be possible if a gradual reduction of the global uncertainties occurs and the perspectives of growth for China, United States and Eurozone are maintained. Agriculture Manufacturing Services Brazil’s GDP, in 2013, will reach US$ 2,456 trillion, according to IMF. The services sector continues to be the most representative in Brazilian economy, generating 68.5% of the entire domestic product, followed by industry (26.3%) and agriculture (5.2%). The GDP per capita, in turn, will reach the level of US$ 12.290 in 2013, remaining stable if compared to 2012 (US$ 12.078). Nominal GDP and GDP per person Nominal GDP US$ Trillions (Left) GDP per person US$ Thousand (Right) 4,0 25,0 3,0 2,5 2,4 2,5 2,6 2,8 3,0 20,0 2,1 2,0 1,7 1,6 12,7 11,0 1,0 8,6 8,4 2008 2009 12,1 12,3 13,0 13,8 14,6 15,0 10,0 0,0 5,0 2010 2011 2012 2013 E 2014 E 2015 E 2016 E Source: International Monetary Fund, World Economic Outlook Database, April 2013 FOREIGN DIRECT INVESTMENT (FDI): Expectations are that the amount of FDI in Brazil will rise in the second term of 2013, recovering partly from the losses verified in 2008. An increase of 9.4% is expected compared to last year’s FDI, reaching nearly US$ 70 billion by the end of 2013. For 2014, growth of the volume of Foreign Direct Investment is expected to be more modest. Credit Suisse, the Swiss investment bank, forecasts FDI levels to reach US$ 75 billion in 2014, mostly due to a warmer global activity and a weaker risk perception of global instability. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 5 In the last years, Brazil has become one of the most important investment destinations for foreign investors, moving from 21th (2006) to 5th (2011) place on the ranking of countries which most received investments. The sectors that most received investments are those related to the domestic market (foods & beverages; commerce; insurances; welfare and health plans; financial services) and to the production and extraction of commodities (metallurgy, Oil&Gas). Since the end of 2011, the tax rate of IOF (Financial Operations Tax) and Income Tax (IRPF) has been reduced to zero for foreign investments in infrastructure debentures, stimulating a mass influx of cash to finance infrastructure projects in Brazil. Furthermore, in the beginning of June of 2013 Federal Government reduced to zero the IOF tax rate for fixed income investments made by foreign investors. FDI USD Milions Foreign Direct Investment (FDI) - Nominal Values FDI - % change 100,0 100,0% 87,3% 75,0 66,7 64,0 70,0 75,0 60,0% 37,5% 50,0 48,5 45,1 9,4% 20,0% 7,1% -4,0% 25,9 25,0 -20,0% -42,6% 0,0 -60,0% 2008 2009 2010 2011 2012 2013 E 2014 E Source: Credit Suisse, 2012 EXCHANGE RATE: The amount of foreign exchange transactions whether it is as FDI, exports of goods and services or other types of national investments has impacted directly the exchange rate and fostered the establishment of international reserves, which Government uses to guarantee the National Financial System (SFN) stability and to finance new investments. Those reserves will move from US$ 380 billion, in 2012, to US$ 415 billion in 2013, coming to US$ 455 billion in 2014 (what is equivalent to 17% of Brazil’s GDP), according to Credit Suisse. The Exchange rate has been reflecting, since the beginning of the year, international investors’ appetite for Brazilian currency, as well as the effects of the anti-cyclical economic policies adopted by authorities of the main developed countries after the 2008 financial crisis. From 2009 to the middle of 2011, Real (BRL) was kept appreciated against U.S. Dollar give mainly to the expansionary measures adopted by FED, to cushion the crisis impact. However, in the last 24 months, the US currency again appreciated against Brazilian Real due to reduction in the demand for the currency and recovery of the North-American economy. More recently, expectations that the currency expansion cycles adopted by the primary Central Banks in the world could be coming to an end, and the consequent portfolio relocation by international investors have led to depreciation of the BRL against the USD. Also, the higher productivity of the north-American economy enables a dollar appreciation in the long term. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 6 Fx Rate USD / BRL 2,50 2,32 2,38 2,25 2,00 1,90 1,94 1,98 1,84 1,75 1,74 1,50 2008 2009 2010 2011 2012 2013 E 2014 E Source: BACEN According to the Focus Report published by BACEN on August 23rd, 2013, the Exchange rate forecast for the end of 2013 is BRL/USD 2.28, while for 2014 it is BRL/USD 2.30. The key determinants of the Exchange rate in the short term are the Country Risk (+), the difference between the domestic and external interest rates, risk aversion (+) and the commodities prices index (-), bearing in mind that Brazil is a commodities exporting country, especially minerals. INFLATION: The National Extended Consumer Prices Index (IPCA), the official Brazilian inflation measure, closed at 5.84% in 2012, a level above the established target of 4.50%. According to the Focus Report published by BACEN on August 23rd, 2013, the IPCA will reach 5.80% and 5.85% in 2013 and 2014, respectively. These levels are high indeed, but still within BACEN’s target of 6.50%. Among some of the factors that most pressure the inflation, three of them deserve more attention: the Exchange rate more depreciated; higher acceleration of economic activity and higher expectations on the inflation itself. Such an inflation scenario above the target should prevail, at least, until 2016, according to studies published by Credit Suisse. Official Inflation - IPCA 8,0% 7,0% 6,6% 6,0% 5,7% 5,0% 5,8% 5,9% 2013 E 2014 E 5,4% 4,9% 5,0% 4,0% 3,0% 2008 2009 2010 2011 2012 Source: Historical Series: IMF 2013 Forecast: Focus Report, August 23rd, 2013 Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 7 Interest Rate (SELIC): Brazil’s basic interest rate, SELIC, has suffered a cycle of successive increases throughout 2013, after a long period of decreases finished in the last year. This cycle aims to contain the inflationary pressures, which have demonstrated to be persistent, and which have avoided a more sustainable growth of the Brazilian economy. BACEN’s Focus Reports predicts that at the end of 2013 and 2014 SELIC will be at the 9.25% level. On such level, it becomes attractive again to foreign investors, possibly generating appreciation of the Exchange rate. Along with this, new measures of tax reduction could help maintaining SELIC on levels below 9.25%. Official Interest Rate - SELIC 15,0% 13,7% 12,0% 10,7% 9,0% 10,9% 9,5% 9,5% 2013 E 2014 E 8,7% 7,1% 6,0% 2008 2009 2010 2011 2012 Source: BACEN UNEMPLOYMENT RATE: The unemployment rate tends to remain at lower levels, due to the heated economic activity. In 2013, the unemployment levels are expected to drop to 4.8% and in the following year, to 4.2%. A significant deterioration in this case would be expected only in a scenario of strong economic recession. At lower levels, the unemployment rate impacts positively on the domestic consumption and default rates, which expectations are of reduction during the year. Unemployment rate 9,0% 7,9% 8,1% 7,5% 6,7% 6,0% 6,0% 5,5% 4,8% 4,5% 4,2% 3,0% 2008 2009 2010 2011 2012 2013 E 2014 E Source: IBGE – PME Forecast: Credit Suisse 2012 Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 8 CREDIT: The credit Market in Brazil will probably expand, responding to the acceleration of economic activity and stimulated by Government’s taxations policies of subsided credit, mainly through public banks. Credit, US$ Billions Credit, US$ Billions Credit, as % of GDP 3.000,0 130,0% 2.368 2.250,0 110,0% 2.030 1.706 1.500,0 98,7% 1.414 1.227 90,0% 88,4% 81,2% 81,2% 72,2% 750,0 70,0% 0,0 50,0% 2008 2009 2010 2011 2012 Source: BACEN TRADE BALANCE: The negative results in the Trade Balance (exports minus imports) in the beginning of 2013 reflects some important movements of the national and international situation: the domestic economy recovery, especially in the industrial sector raises the amount of raw materials and intermediate goods, including oil and its derived; the international commodities prices are decreasing and the global economic activity keeps its pace at a moderated level, making it difficult to the expansion of exports. Moreover, there is the atypical growth of oil imports in 2013 caused by the delayed register of 2012 purchases, combined with the steep decline of the product exports on account of domestic production reduction. With the likely recovery of production and exports levels in the second term of 2013, and once the temporary effects of the changes in oil imports registers are over, the tendency is of improvement of the balance, on a monthly basis. Nonetheless, the yearly results should be the worst since 2000, when the Trade Balance presented deficits of US$ 718 Million. Trade balance (US$ Billions) 40,0 30 30,0 25 25 21 20 20,0 8 10,0 5 0,0 2008 2009 2010 2011 2012 2013 E 2014 E Source: Historical Series: Credit Suisse Forecast: Focus Report, 2013 Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 9 2.3 Relevant Sectors REAL ESTATE SECTOR: The perspectives of Real State sector are very favorable in the Country. Brazil has the world’s 5th biggest population, with over 200 Million inhabitants and is currently going through the so called “demographic bonus”, period in which the economic active population is very numerous and reflects positively on the demand for real estate assets. GDP growth combined with the low unemployment rate and some cities’ public policies also stimulate the demand for real estate assets. According to the Brazilian Real Estate Market 2012 Annual Report, published by Lopes Market Intelligence, the General Sale Value (VGV) released in 2012 was around BRL 80 Billion, approximately 7% lower than what was observed in 2011 (BRL 86 Billion), showing some kind of stabilization in the market. The sample used in the analysis of the Annual Report was composed of 1,321 projects, 2,769 towers and 182,803 properties launched in the same year, by Lopes itself or competitors in 65 municipalities and 7 satellite cities. These data totalized over BRL 69 Billion of VGV, which represents 86% of the total launched in the country. Real Estate Developments Table Type of Development Number of Developments Vertical Housing Towers Units Launched General Sales Value (Millions) Price / m² (median) 1,128.00 2,539.00 146,316.00 55,804.00 5,110.00 Commercial 163.00 195.00 29,280.00 11,040.00 8,460.00 Flats/Hotels 30.00 35.00 6,667.00 2,063.00 11,530.00 1,321.00 2,769.00 182,803.00 68,907.00 5,590.00 Total Source: Brazilian Real Estate Market 2012 Annual Report In 2012, 1,128 vertical housing properties were launched, while in 2011 there were 1,132, representing a decrease of only 1%. The commercial ventures had a more significant reduction, with a decrease of 15% in relation to 2011. The only segment that had a positive variation was the flats and hotel, which had an increase of 43%. The number of units build in 2012 was 182,803; 15% lower than the 213,782 units from 2011. The median price of the units had an increase of 9%, going from BRL 5,140 to BRL 5,590/m². Consequently, there was appreciation in all kinds Real Estate segments, being the largest hike referring to hotels and flats. Vertical rising increased 10% and commercial ventures rose 7%. Key Sector Numbers Data Developments Towers Housing % from total (Housing) 1,128.00 86% Commercial 163.00 % from total (Commercial) Hotels/Flats 12% % from total (Hotels/Flats) 30.00 2% 2,539.00 92% 195.00 7% 35.00 1% 146,316.00 80% 29,820.00 16% 6,667.00 4% 130.00 - 183.00 - 222.000 - General Sales Value launched BRL 55.8 Billion 81% BRL 11 Billion 16% BRL 2.1 Billion 3% Average GSV per development BRL 49 Million - BRL 68 Million - BRL 69 Million - BRL 375 Million - BRL 360,000 - BRL 307 Million - Units Launched Units, average by development Average ticket Source: Brazilian Real Estate Market 2012 Annual Report Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 10 Players Cyrela Considered one of the best Real Estate developers in Brazil, Cyrela has a 50-year history of providing housing to more than 200,000 families. Nowadays, employs more than 10,000 people and operates in 67 cities of 16 Brazilian states. In 2012, its net earnings reached BRL 571 Million. Gafisa Founded in 1954 in Rio de Janeiro, became in the end of the 1980s Gafisa Imobiliária. In 1997, associated to GP Investmentos and became Gafisa S.A. Today, Gafisa is one of the leaders in the market for development and construction in Brazil, focused on the housing segment. Currently owns 3 major brands: Gafisa, AlphaVille and Tenda. Gafisa is the only real estate development company to have its stocks listed at the NYSE. Brookfield The company is the result of merges of 3 companies: Brascan, MB Engenharia and Residential Company, which together formed one of the leaders of the sector. Brookfield’s main shareholder is Brookfield Asset Management, which has more than US$ 100 Billion allocated to the real estate market. During its 110 years of history in Brazil, Brookfield has delivered over 60,000 properties and employs today around 5,500 people. The company presented a net loss of BRL 160 Million in the second quarter of 2013. MRV Based in Belo Horizonte, Minas Gerais, the company founded in 1979, offers housing options in more than 120 Brazilian cities. In the end of 2012, MRV had a body of 25,000 employees and presented net earnings of BRL 528 Million for the fiscal year. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 11 HOTEL SECTOR: According to Jones Lang Lasalle, international consultancy firm, the supply of hotel sector in Brazil is composed of 9,681 hotels and 464,477 rooms (data from 2012). Only 8.3% of the hotels were associated to national or international chains, holding more than 28% of the total number of rooms. The independent hotels are still the vast majority in the country, representing 91.7% of the total of hotels and 71.8% of the total of rooms. It is worth noting that, according to the methodology used by Jones Lang Lasalle, in this category fall all hotels belonging to national chains and which have less than 600 rooms. Hotel Segment in Brazil 3,9% 4,4% Hotels - International Brands Hotels - National Brands 36,2% 55,6% Independent Hotels < 20 rooms Independent Hotels > 20 rooms Source: Jones Lang Lasalle Employing around 365,000 people and moving BRL 20 Billion per year, according to the Brazilian Association of Hotels Industry (ABIH), the sector is of great importance to the national economy and is going through a stable period. According to Jones Lang Lasalle, 2012 was the 8th year of consecutive growth of REVPAR (index obtained by multiplying the annual occupancy by the average daily room rate) in Brazil, with an increase of 8.8% compared to 2011. RevPar and Average Occupancy RevPar (R$) RevPar Variation (%) Occupancy rate (%) 200 80,0% 66% 63% 147 150 122 99 100 40,0% 17,3% 20,5% 2009 20,0% 8,8% 5,1% 2008 60,0% 104 50 0 160 0,0% 2010 2011 2012 Source: Jones Lang Lasalle The improvements observed were driven by the average daily room rate rise, which was 15.2% higher than the 2011 average. The occupancy rate was down from about 5.6% compared to the previous year. The low growth of the economy in 2012 is pointed as the main reason of the drop in the occupancy rate. Segmentation The main segment in this sector is business tourism, being responsible for approximately 66% of the total demand for hotel, followed by leisure tourism (at around 19%). Event tourism and other types complete the list, although with smaller shares in the sector’s total demand Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 12 Average Daily Room Rate for Urban Hotels by Segment Segment Average daily room rate over BRL 380 Average daily room Average daily rate between BRL 220- room rate below 380 BRL 220 67.2% 65.4% Total Urban Hotels Business 61.40% 66,00% Leisure 19.80% 17.7% 19.2% 18.6% Events 10.50% 10.3% 9,00% 9.7% Tripulation 7.10% 2.4% 3.8% 3.3% Others 1.20% 2.5% 2.6% 2.5% Total 100.00% 100.00% 100.00% 100.00% Source: Jones Lang LasalleSource: Jones Lang Lasalle Hotels which have an average daily room rate over BRL 380 are considered luxurious and usually all their amenities and services are of high standard. The tier between BRL 220 and BRL 380 includes hotel which offer medium standard facilities, varying from 3 to 4 stars of rating, depending on the Market. Finally, hotels with daily room rate below BRL 220 are considered value deals and usually offer simpler facilities. According to the Real Estate Brazilian Annual Report, 30 developments were released in the main national markets in 2012, 35 of them being towers and 6.667 unities, totalizing a General Sale Value of BRL 2,1 Billion. The Southeast of Brazil consolidates 72% of the developments in this sector. Guests Origin In 2012, Brazil received around 5.7 Million foreign tourists, a figure 4.5% higher than 2011’s data, according to Jones Lang Lasalle. The proportion of foreign guests in the total urban hotels sampling was only 15.4%, leaving the rest to Brazilian tourists. In hotels with daily room rates over BRL 380, foreign visitors represented over 34% of the total of guests. In the medium tier, this proportion drops to nearly 20%. Finally, in hotels with an average room rate below BRL 220, this proportion was even lower, reaching 10% of hotels total occupancy rate. Origin of passengers per segment Brazilian 100,0% 19,4% 80,0% Foreign 10,4% 15,4% 89,6% 84,6% Room rate below R$ 200 Total 34,1% 60,0% 40,0% 80,6% 65,9% 20,0% 0,0% Room rate > R$ 380 Room rate between R$ 200 R$ 380 Source: Jones Lang Lasalle According to the Ministry of Tourism, the amount of foreign tourists has hardly evolved in the last few years. Estimative show that this figure may have increased only by 6.5% between 2005 and 2012, representing a Compound Average Growth Rate (CAGR) below 1%. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 13 Foreign Tourists in Brazil (Millions) 8,0 6,0 5,0 5,0 5,1 2006 2007 2008 4,8 5,2 5,4 5,7 4,0 2,0 0,0 2009 2010 2011 2012 Source: Ministry of Tourism Players: Accor Accor, a Market leader in Europe, has more than 3,500 hotels including 450,000 rooms all around the world. Accor Hotels are present in 92 countries and in the 5 continents. In its 45-year history, has 160,000 employees and presented consolidated revenues of EUR 5.6 Billion in 2012. In Brazil, Accor owns 150 hotels and plans to open a hundred more until 2016, totalizing USD 1.5 Billion of investments. Especially for FIFA’s World Cup 2014, the Group pretends to invest over BRL 522.5 Million in 23 hotels, located in 12 cities. Atlantica Atlantica Hotels International is the largest independent multi-branding hotel chain of South America. There are more than 75 hotels divided into 10 brandings for 4 segments: Economic, MidClass, Superior and Luxury. With estimated billing revenues of BRL 700 Million in 2012 according to Istoé Dinheiro magazine, the hotel chain plans to double its size until 2016 with investments of BRL 3.5 Billion, especially in smaller towns. BHG BHG - Brazil Hospitality Group is the third largest hotel chain in the country and became the first Brazilian company to operate in the real estate segment dedicated to business tourism hotels. It was also the first company in the sector to be listed in the New Market class of BMF&BOVESPA stock Exchange. Founded in 2009, broke new ground as administrator of third-party hotels, as well as developer and constructor of 3 and 4 stars hotels. Currently has an exclusivity contract with Golden Tulip Hospitality Group, being able to use Royal Tulip, Golden Tulip, Tulin Inn and Soft Inn brandings. A BHG ended the first term of 2013 with a total of 8,691 rooms in operation distributed into 49 hotels, being 26 of them belonging to third-parties and 7 of mixed capital structure. Until the end of 2015, BHG plans to be with 13,077 rooms under its management, distributed into 69 hotels. In 2012 its gross operational revenues were of BRL 245.9 Million. Blue Tree Blue Tree Hotels is a Brazilian hotel chain based in São Paulo and which was founded in 1997. It currently has 24 hotels in 15 different cities. Owner of the brandings Bluee Tree Park, Blue Tree Premium, Blue Tree Towers and Blue Tree Hotel, the chain had billing revenues of BRL 325 Million in 2012, which represented a 27.5% increase from 2011’s figures. This increase rate was 3 times higher than the growth of the entire sector in the last year. Besides the 1,019 rooms added to the chain inventory in 2012, 5 new contracts were signed envisioning the construction of 1,340 new rooms with release date scheduled for the period between 2014 and 2016. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 14 EDUCATIONAL SECTOR: Education in Brazil has been evolving considerably over the last years, as shown by some sector indicators. According to the National Household Sample Survey 2011 (PNAD 2011), published by the Brazilian Institute of Geography and Statistics (IBGE), the illiteracy rate in 2011 was 8.6% of the total population with 15 years old or more, 1.1% lower than the results from 2009. Almost 27% of the total illiterate people are in the age group over 40 years old. The volume of public investments in education revolves around 6.09% of GDP. Basic education is responsible for receiving 83% of this total (5.1% of GDP). This figure is 11% higher than the total investments in education observed in 2008. When talking about higher education, this volume represents only 1% of GDP. Public Investments in Education by Level of Education (% of GDP) Year Total Investment Childhood Education Elementary School High School Higher Education 2008 5.49% 0.41% 3.41% 0.79% 0.87% 2009 5.72% 0.4% 3.63% 0.77% 0.91% 2010 5.81% 0.45% 3.57% 0.87% 0.92% 2011 6.09% 0.54% 3.45% 1.06% 1.04% Source: Ministry of Education/INEP The destination of high sums to education has impacted directly in the number of schools available to the population. Today, Brazil has 192,676 schools, which employ more than 5 Million people. Private schools are responsible for less than 20% of the total with 37,551 branches and more than 1 Million employees, according to the 2012 School Census published by Anísio Teixeira National Institute of Education Studies and Research (INEP). Basic Education According to INEP, in 2009, approximately 52.5 Million students attended basic education schools, including students from technical education, youth and adult education as well as people with disabilities. The vast majority of the students (85,4%), attended to public schools. In 2011, according to PNAD, there was a drastic reduction in the number of pupils enrolled. Also, the proportion of students in public schools decreased from 85.4% to 78.4% of the total. Source: Ministry of Education/INEP Basic Education Enrollments Year Total of Enrollments Public Institutions Enrollments Private Institutions Enrollments 2008 52,232,868 46,131,825 7,101,043 - - 2009 52,580,452 45,270,710 7,309,742 -1.23% 2.94% 2010 51,549,889 43,989,507 7,560,382 -1.96% 3.43% 2011 50,972,619 43,053,952 7,918,667 -1.12% 4.74% 2012 50,545,050 42,222,831 8,322,219 -0.84% 5.1% Variation (Public) Variation (Private) The three stages of basic education are clearly defined and obviously have different structures and purposes. Childhood education is not compulsory, but children aging from 0 to 3 years can be enrolled in day care centers, while children aging from 4 to 5 years can be enrolled in pre-schools. The main objectives in these cases are the physical, social and psychological development of the child. These activities are complementary to family life education. Each municipality is responsible for providing public childhood education and regulating the private sector. The Elementary Education is compulsory, implying that all children aging from 6 to 14 years must be enrolled. The State must offer elementary education for free, as well as regulate the private institutions. The objectives in this stage are the social and natural environment comprehension, knowledge of the political system, basic family and social values, as well as development of writing, reading and math operations capabilities. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 15 High School Enrollments Year Total of Enrollments Total Population (15 to 17 years) 2008 8,366,100 10,262,468 2009 8,337,160 10,289,624 2010 8,357,675 10,399,385 2011 8,400,689 10,580,060 2012 8,376,852 - High school, which lasts for 3 years, aims to further develop the knowledge acquired in elementary school so the pupil can feel comfortable and prepared to be inserted in the labor market. The State has a duty to ensure access of the population to a quality high school education. The public network addresses 87.7% of the total of enrollments in high school, followed by private schools, which address 12.3%. Source: MEC/INEP/Deed; IBGE/Pnads from 2007 to 2009 and Demographic Census Higher Education Several factors put higher education in evidence in Brazil, with the average population income increase and the growing demand of the companies for specialized labor force. The segment is composed by sequential courses of graduate, post-graduate and extension courses that can be offered on site or via distance. The first one has a compulsory attendance for classes and exams of 75%. The distance education (EAD) is a learning method where the student does not need to be present in the classroom. All the necessary material including books, papers and other, is given to the pupil and classes and exams are taken through the Internet. Brazil represents the 5th largest high school market of the world, and the largest in Latin America according to the Global Education Digest 2012 study from UNESCO, data from 2010. According to the 2011 Higher Education Census, published by INEP, Brazil has 2,365 higher education institutions, being 190 of them universities, 131 campi, 2,004 colleges and 40 federal institutions (IFs and CEFETs) Of this total amount, the government is responsible for only 12% of them, with 284 higher education institutions. The vast majority (88%) belongs to the private sector. Higher Education: Number of Institutions Type Unities Public Private Proportion (Public/Total) Proportion (Private/Total) Universities 190.00 102.00 88.00 53.6% 46.4% University Centers 131.00 7.00 124.00 5.4% 94.6% 2,004.00 135.00 1,869.00 6.8% 93.2% 40.00 40.00 - 100.00% - 2,365.00 284.00 2,081.00 12.00% 88.00% Colleges IF and CEFETs Total Source: 2011 Higher Education Census In all, 30,420 courses are offered, 9,833 of them by public institutions and 20,587 by the private sector. With just 6.7 Million higher education enrollments, the vast majority (73.7%) refers to private institutions. Public institutions are responsible for just 1,773,315 (26.3%) of the total. The total number of enrollments represents a lower figure if compared to the high school enrollments (8.4 Million), which theoretically should continue in the higher education level. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 16 Higher Education Enrollments Age Total Population (2010 IBGE) Number of Enrollments 18 e 19 years 6,632,998 723,566 20 to 24 years 17,245,192 2,687,484 25 to 29 years 17,104,414 1,402,251 30 to 34 years 15,744,512 807,320 35 to 39 years 13,888,579 470,831 Again, according to data from 2011 Higher Education Census, the tier including people aged from 20 to 24 years has the higher proportion of enrollments in higher education, with more than 2.6 million students. Data from the 2010 IBGE Census show that the market might be under-exploit by the private initiative and poorly addressed by the Government. Source: IBGE, INEP Players: Estácio Operating in 21 Brazilian States, Estácio Participações S.A. is one of the largest higher education chains in the Country. Based in Rio de Janeiro, is a publicly traded company which has over 40 years of experience in this segment. Nowadays has around 330,000 pupils enrolled in more than 70 branches. It offers a campus, various university centers and colleges. Kroton One of the largest private education institutions in Brazil, Kroton has more than 45 years of history. With a comprehensive business model, the Group operates from childhood education to master’s degree. The organization has more than 411,000 pupils enrolled in graduate and post-graduate levels and 289,000 students in basic education. Besides that, there are 447 hubs of distance learning distributed in every Brazilian state, 53 campuses located in every corner of the country and 810 associated schools. Kroton also has 6 schools in Japan and one in Canada. Anhanguera One of the largest global education institutions, Anhanguera also is one of the biggest publicly traded companies in Brazil’s education sector. With more than 490,000 students, the Group owns 70 campuses and more than 500 hubs, located in all the Brazilian states. In December 31th, 2012, its market value was of BRL 5 Billion. The Group had net earnings of BRL 152.1 Million at the end of 2012, representing a growth of 260,8% compared to the previous year. In April, 2013, Anhnaguera merged with Kroton, forming the largest educational group in the world. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 17 AVIATION SECTOR: According to the 2011 Civil Aviation Annual Report made by the National Civil Aviation Agency (Anac), in 2011, Brazil had 507 aircrafts and 168 locations covered by aerodromes. The majority of the Brazilian airports is located in the Southeast region, and 6 of the busiest of them are located in capital cities or large metropolitan areas. Main Airports in Numbers of Departures City Airport Departures Guarulhos/SP GUARULHOS - GOVERNADOR ANDRÉ FRANCO MONTORO 101,083 Congonhas/SP CONGONHAS 79,593 Brasília/DF PRESIDENTE JUSCELINO KUBITSCHEK 77,477 Rio de Janeiro/RJ AEROPORTO INTERNACIONAL DO RIO DE JANEIRO/GALEÃO 56,417 Confins/MG AEROPORTO INTERNACIONAL TANCREDO NEVES 51,144 Rio de Janeiro/RJ SANTOS DUMONT 49,622 Salvador/BA DEPUTADO LUÍS EDUARDO MAGALHÃES 47,402 Campinas/SP VIRACOPOS 43,225 Curitiba/PR AFONSO PENA 41,131 Porto Alegre/RS SALGADO FILHO 38,194 Source: ANAC The 10 main domestic routes involve the country’s main airports. These routes usually are between Southeast capitals or include at least one of them as point of origin or destination. Number of Seats and Flights in the Main 10 Routes (Domestic Operation, 2011) Route Offered Seats Flights São Paulo (Congonhas) - Rio de Janeiro (Santos Dumont) 6,540,030 41,073 São Paulo (Congonhas) - Brasília 2,976,780 18,150 Salvador - São Paulo (Guarulhos) 2,819,819 17,161 São Paulo (Congonhas) - Belo Horizonte (Confins) 2,357,451 14,500 Porto Alegre - São Paulo (Guarulhos) 2,261,944 14,157 Recife - São Paulo (Guarulhos) 2,257,179 12,676 Salvador - Rio de Janeiro (Galeão) 2,166,994 12,919 São Paulo (Congonhas) - Curitiba 2,016,967 12,249 Brasília - São Paulo (Guarulhos) 1,908,830 13,648 Rio de Janeiro (Galeão) - São Paulo (Guarulhos) 1,837,725 11,655 Source: ANAC Over the last years, the Brazilian aviation sector has been passing through a period of continuous growth. The favorable economic situation, added to the competition in the sector has impacted positively in some of its most relevant indicators. Indexes such as the utilization rate, and the domestic demand and supply have increased year over year, in contrast to the average airfare for domestic routes that have dropped considerably, what favors the increase of number of passengers. Even with all the positive indicators relating to the sector, 2013 has been unfavorable to aviation companies. In addition to the increase in the prices of fuel, the maintenance and insurance costs increased too, which, by the way, are the most relevant costs in this sector. Fuel, leasing, insurance and maintenance usually represent 47% of the total costs and expenditures, which contributed to a loss of BRL 1.5 Billion in the period. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 18 Air transport supply and demand The supply of air transport considers only the commercial flights of Brazilian and foreign companies, including scheduled, extras, charter and cargo flights. The table below shows the annual variation of supply, in terms of Available Seat Kilometer (ASK) – measure of an airline transport capacity. This indicator is obtained by multiplying the possible number of passengers in a plane by the quantity of kilometers flown. Annual Air Transport Supply Variation (ASK) - Domestic and International Markets Year Domestic (ASK x1000) Variation (%) International (ASK x1000) Variation (%) 2008 75,092,338 11% 27,840,425 19% 2009 86,074,386 15% 28,477,687 2% 2010 102,656,359 19% 31,118,513 9% 2011 116,080,248 13% 33,451,444 7% Source: Air Transport Annual Report, 2011 / ANAC The demand for passengers is obtained by periodically registered data from ANAC, by Brazilian and foreign companies and presents the total quantity of paying passengers transported. Number of Passengers Transported Year Domestic Passengers International Passengers Total 2008 49,857,578 13,664,250 63,251,828 2009 56,891,532 12,833,993 69,725,525 2010 70,006,559 15,512,925 85,519,484 2011 82,049,177 17,892,320 99,941,497 Source: Air Transport Annual Report, 2011 / ANAC The good moment of the Brazilian economy reflects the growth rate of domestic passengers. Even in the period of crisis in 2009, in spite of the decrease in the international passengers demand, there was an increase in relation to 2008’s figures. In the subsequent years, the growth rate remained stable. Other factors that impact in the stabilization of the growth of domestic passengers transported are the increase in the aircraft utilization rate and the constant reduction of the average airfare rate in the last years. The domestic utilization rate considers only the commercial flights of Brazilian companies in the year of 2011 (schedule, extras and charter flights) and went from 56.6% in 2002 to 70.2% in 2011. The average airfare is an economic indicator that corresponds to the average price paid by passenger in a trip, regardless of stops or connections and distance of flights. In 2011, the airfare reached the lowest level in 10 years (BRL 276.25), 6.8% lower than the BRL 296.33 from 2010. The record number in 2011 was the main propeller in the passengers’ number growth in the country. Another important measure in the aviation sector is the Revenue Passenger Kilometer (RPK), calculated by multiplying the number of paying passengers transported by the number of kilometers flown. This includes passengers traveling with discount tickets, those benefiting from promotional offers and people using loyalty programs. It does not include people travelling for free, airline employees and children that do not occupy a seat. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 19 Annual Air Transport Demand Variation (RPK) - Domestic and International Markets Year Domestic RPK (x1000) Variation (%) International RPK (x1000) Variation (%) 2008 49,563,355 8% 19,516,329 31% 2009 56,728,594 15% 19,656,773 1% 2010 70,237,904 24% 23,752,904 21% 2011 81,452,332 16% 26,363,500 11% Source: Air Transport Annual Report, 2011 / ANAC The data below refer to the total domestic and international paid cargo that was transported between 2008 and 2011 in the country. The domestic cargo is loaded in Brazilian airports destined to domestic cities. The international cargo is obtained by the sum of cargo loaded in Brazilian airports intended for export and the cargo loaded in other countries intended for export to Brazil. Air Transport of Cargo Year Domestic Cargo (Kg) International Cargo (Kg) Total 2008 351,578,513 582,706,311 934,284,824 2009 324,837,496 470,242,469 759,079,965 2010 386,374,057 644,937,398 1,031,311,455 2011 412,880,257 717,733,589 1,130,613,846 Source: Air Transport Annual Report, 2011 / ANAC Players Tam Táxi Aéreo Marília (TAM) was founded in 1976 with the aim of providing high quality and differentiated services to its customers. The company is the leader of the domestic market in Brazil, with a market share of 42.1% and flight occupancy of 84.4%. In the international market operated by Brazilian company, Tam presents a market-share of 85.6% and flight occupancy of 82.3%, according to ANAC, in July 2013. In June 17th, 2012, TAM associated with LAN Airlines, originating the LATAM Airlines Group, the largest airline group in Latin American in terms of aerial mesh, offering passenger transport services to more than 135 destinations in 22 countries, and cargo transportation services to 144 destinations in 27 countries, counting with 321 airplanes. Gol Founded in March 12th, 2004, Gol is, according to the International Air Transport Association (IATA), one of the largest low cost Airlines in terms of transported passengers in 2012 and the largest of this category in Latin America that offers regular flights to main Brazilian cities as well as the main cities of South America and the Caribbean. Gol was the first company to successfully introduce low-cost practices and technologies in the transport segment in Latin America. With a diversified base of revenues, serves from business executives to tourists in vacation to other Brazilian destinations. In June, 2013, the company had 970 daily flights to 65 domestic markets and 10 international destinations such as South America, United States and the Caribbean. Azul/Trip Founded in March, 2008, Azul has changed the national commercial aviation panorama, focusing on regional flights and using secondary and peripheral airports. In May, 2012, Azul and Trip Linhas Aéreas merged originating the third largest Brazilian aviation company. Together, Azul and Trip add up more than 121 aircraft, 840 daily flights and 100 destinations and dominate approximately 15% of the market. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 20 INFRASTRUCTURE AND LOGISTICS: The effective sustainable and accelerated development of any nation is only attained when logistics and infrastructure bottlenecks are solved. In this way, this involves, among other factors, the construction of a wide and modern airport, rail, and road networks with integrated logistics. According to the Federal Government of Brazil, the total investment planned in infrastructure for the next 30 years are of BRL 253 Billion. The main programs of investment are the Growth Acceleration Program (PAC) and Logistics Investment Program (PIL). When it comes to airports, the PIL will include investments for the expansion of the air transport supply, the regional aviation network reconstruction and improvements in the quality of services and airport infrastructure. The total investments planned in the program will reach BRL 7.3 Billion, this amount being applied to 270 regional airports. The program also plans to authorize private airports to operate in the commercial aviation, with special financing conditions. It is scheduled for November, 2013 the concession auction for the airports of Galeão and Confins, which will probably attract over BRL 5 Billion of investments. For the road network, again according to the Federal Government, many road duplications are expected in the main road transport axis in the country, as well as establishment of concessions in over 7,500 km of federal roads. Among the parts of the highways, some of them pass through Minas Gerais state: - BR-262 ES/MG; - BR-050 GO/MG; - BR-153 GO/MG; - BR-262 MG; - BR-116 MG; e - BR-040 DF/GO/MG The concession model includes the duplication of roads which must be concluded during the first five years of contract. Public Brazilian banks will be able to finance up to 70% of the investments with an interest rate of 2.0% per year, plus the TJLP (long term interest rate). The main objective of the model is to improve the logistics integration between the various transport modes in ways that will further benefit Brazil with competitiveness gains. Investments in infrastructure are expected to push for economic growth and sustainable development of the country. In the railroads sector, PIL includes investments of around BRL 99.6 Billion on improvement and construction of 11,000 km of railroads. The railroad program has as main guidelines: supply of a wide, modern and integrated railroad network; competitive and efficient supply chains and charging affordability. It also envisages a new concession model, in which participating companies are responsible for the infrastructure, signaling and control of trains. The concession, which will last for 35 years, will contemplate broad gauge tracks (1,600 mm) that present a high capacity of cargo handling and geometric design optimized for higher speeds (80 km/h). The High Speed Train (TAV) is a railroad transport service of passengers that will connect the cities of Rio de Janeiro, São Paulo and Campinas. The TAV project will represent a technological landmark for Brazil, becoming a new transport option that will provide a safe, quick, comfortable and reliable trip to its customers. The investments are estimated in BRL 35.6 Billion and hope to reduce the pressures imposed by the growing flux of passengers in airports and highroads, mainly between Rio de Janeiro and São Paulo. The TAV’s implementation process is structured in two stages. In the first one, with the auction scheduled for 2014, the railroad operator will be selected, under a 40 year concession contract. The National Terrestrial Transports Agency (ANTT) is in charge of the TAV concession for operation. The public notice containing the rules of the process was released in December 12th, 2012. After the first stage, the model for the necessary infrastructure will be determined (bridges, viaducts, tunnels, permanent roads). The executive infrastructure project will be contracted by the Planning and Logistics Company (EPL). The deadline for TAV’s operation to begin is June, 2020. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 21 The PIL for the port sector was released in December 6th, 2012 and foresees an investment of around BRL 54.6 Billion over the next five years, for the expansion and improvement of the sector infrastructure. Over BRL 6.4 Billion will also be invested in access ways (BRL 3.8 Billion on waterways and BRL 2.6 Billion on roads). The program’s main guidelines are: systemic planning; scale gains; biddings for higher capacity of handling (with shorter tariffs and lead-times); increase of competition; ports reorganization and long term planning. Public Brazilian banks will be able to finance up to 65% of the investments with an interest rate of 2.5% per year, plus the TJLP. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 22 HEALTH SECTOR: From the total health expenditures in Brazil, public sector responds for 42% of the total, while families and non-profit institutions respond for the other 58%, according to the latest data from IBGE. The public health expenditures represented 3.6% of the GDP, while the private expenditures represented 4.9%. Brazil has been passing through a deep change in its demographic pyramid. In 1980, the Brazilian life expectancy rate was at about 62 years. This year, the expectancy reached 74.8 years (71.3 for men and 78.5 for women). Elderly population represented, 33 years ago, 6% of the total population, but today they represent over 10%. Medical appointments, in its turn, doubled between 1980 and 2010. At that time, there were 2 annual medical appointments per age; nowadays there are 4, according to IBGE. According to data from a search made by Health Multidisciplinary Assistance (MAS) in partnership with IBGE, the number of hospital beds in Brazil has not increased in proportion to the population growth in the last decade. In 1999, there were 0.9 public hospital beds and 2 private hospital beds for every 1,000 inhabitants. In 2009, there were 0.8 and 1.5, respectively. The current number of hospital beds in Brazil, according to the National Registry of Health Establishments (CNES), is of 451,705 (124,189 private beds and 327,516 belonging to the SUS – Unified Health System). According to the Ministry of Health, over the last five years the number of doctors did not keep pace with changes in the health infrastructure in the country. In the period, the doctors’ supply grew only by 13.4% in comparison to the 17.3% growth of hospital beds, 44.5% growth of health establishments and 72.3% increase in the number of registered equipment by the Federal Government. Number of Hospitals in Brazil Owned by Proportion Municipalities 21% States 8% Federation Private Total Source: CNES 2013 1% 70% 6,756 / 100% The Southeast region has by far, the highest number of active doctors registered at CNES in Brazil. Even if all doctors of the other Brazilian regions were added up, we would still fall short of doctors if compared to São Paulo, Minas Gerais, Rio de Janeiro and Espírito Santo regions. The Brazilian average is of 1 doctor for every group of 510 inhabitants, while in the Southeast this average is of 1 doctor for every group of 380 inhabitants. These data can be explained by the number of Medical Colleges in the region and the number of offered positions. Until September 2013, there were 202 Medical Colleges in Brazil, 89 of them only in the Southeast region. In September, 2013, the number of health posts registered by Ministry of Health was 259,204. The majority of them (72%) consisted of private establishments. The State’s incapacity of addressing the population’s demand for health services can also be verified by the number of private hospitals in the country. From the total of 6,756 hospitals according to CNES, the public portion represents only 30% of the number. The Health sector, as well as Education’s, offers many investment opportunities in Brazil. Although being a highly inspected service and which supply and quality should be provided by the State, in many regions, especially in the small and medium towns, the supply for these services is still very poor, what makes the local population to seek regional centers and very often go to the nearest capital in search of medical services. Therefore, the spread of hospitals and health posts are seen by the Government as strategic in the development of new centralities and in the organized urban growth. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 23 III – The Vetor Norte 3.1 Introduction The Vector Norte is, according to the State’s Extraordinary Secretary of Metropolitan Management (SEGEM), an area within the Metropolitan Region of Belo Horizonte (RMBH), located to the north of the Minas Gerais’ capital, which encompasses eight cities: Ribeirão das Neves, Pedro Leopoldo, Confins, São José da Lapa, Vespasiano, Lagoa Santa, Santa Luzia e Jaboticatubas (see map right). The proposed development plan for Vetor Norte is based on the expansion Project of the Tancredo Neves International Airport. It is an extensive planning made by Government of Minas Gerais, based on studies aimed at the creation of the ideal environment for developing services and high value added goods, stimulating the local economy and attracting investments. Vetor Norte’s development plan had its origin in 2014, when the Government of the State resumed management and planning of RMBH, proposing a new management arrangement for the territory. This new model is composed by three public authorities: The Development Agency of RMBH, The Metropolitan Assembly and de Deliberative Council of Metropolitan Development. Also, the model assumes two main pillars: the Integrated Development Director Plan (PDDI) and the Metropolitan Development Fund. The PDDI was draft only in the end of 2009, when the State’s Secretary of Regional Development and Urban Policies signed a contract with Federal University of Minas Gerais (UFMG) to develop the plan, but even before that there was a consensus among the Government of State that the urbanization of RMBH and the opportunities of great potential of investment had to be reprogrammed. These ideas helped to create the concept of the centralities that would be adopted later in the PDDI, in which every action of the Government for Vetor Norte and RMBH are based on. The airport in the core of growth: Year 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Source: Infraero Passengers Variation (%) 10,200,348 6.98 9,534,986 31.32 7,261,014 29.27 5,167,171 8.24 5,189,528 19.57 4,340,129 16.44 3,727,501 28.83 2,893,299 644.58 388,580 6.49 364,910 - The AITN’s development gained new wind on the Government of State’s agenda in 2002, with the deteriorating situation of Minas Gerais’ main airport at that time, Carlos Drummond de Andrade Airport (Pampulha’s Airport), when more than 3 million passengers passed by its gates. This volume was equivalent to 4 times the official capacity of the airport. According to John Kasarda, that was a record number at that time. However, more than 2 years would be necessary until some kind of action was taken into the solution of these problems. After a meeting between INFRAERO, Belo Horizonte’s City Hall, ANAC, the airline companies and the Government of Minas Gerais, it was established that March 13th, 2005 was the defined date to transfer all long distance flights to AITN. The measure effect was immediate. In Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 24 2005, AITN registered an increase of 644% in the volume of passengers, from 388,000 in 2004 to nearly 2.9 Million in the following year, becoming again the most important airport in the State. This was just the beginning of a series of changes included in the government plans for the region, including various investment projects that would be made in Vetor Norte. In order to attend the increasing demand for the renewed AITN, was launched the largest road sector project of the last decades in the RMBH: Linha Verde. The project, which aims to shorten distances between AITN and the central region of Belo Horizonte, counted with investments of around BRL 438 Million, being extended for 35.4 km, according to the Department of Highways of Minas Gerais (DER-MG). Linha Verde, which was concluded in 2008, decreased significantly the travel time from Belo Horizonte to Confins and has driven the logistics quality of the region, attracting even more investments to Vetor Norte. In the final construction stage of Linha Verde, GEMG expressed even more its compromises with the region’s development. In April, 2007, the Adminstrative City was inaugurated, a BRL 1.2 Billion megaproject that resulted in the construction of new headquarters to Government of Minas Gerais and the transfer of all the management offices to a single complex, along Linha Verde, between AITN and the capital’s center. One of the key drivers for the transfer was to raise productivity and reduce State’s Government expenditures by reducing the trips between the several Secretaries, Autarchies and Departments. According to the Government, after its launch, the Administrative City had a daily flux of 17,000 servers, public employees and service provides. Visitors reached around 3,000 a day, in a total constructed area of 270,000 m². The magnitude of transformations and the speed in which the process was conducted were so huge that led to the conception of a new project, even greater. Actually, it was so big of a project that it encompasses the others as integral parts of its implementation, until its release. The development of the first Aerotropolis in Latin America. A concept, a project: The Aerotropolis concept was created By John Kasarda, renowned advisor in the field, who is also a Director of the Center for Air Commerce at Kenan Institute of Private Enterprise from University of North Carolina, USA; and Honorary Professor of Strategy and Entrepreneurship at Kenan-Flagler Business School, at the same University. An Aerotropolis consists of a ‘city-airport’ with its multimodal traffic corridors, connecting its business districts to the aviation (manufacturing industries; distribution centers, hotel, convention centers, commercial condos, among others), as well as the commercial and housing developments. Generally speaking, Aerotropolis does not differ very much from a conventional metropolis, with its business core in the center of the city and the community around. Nowadays, there are already some examples of Aerotropolis spread around the world, such as Amsterdam’s Schipol Airport, Dallas Forth Worth in Texas, Singapore’s Changi Airport, and Songdo in South Korea, which is still in development. In Brazil, there are just a few airports that offer conditions that could embrace such a concept, due to various factors that limit or even prevent the development of an Aerotropolis. The Tancredo Neves Airport is one of the few exceptions in the Country and the best choice to work on in the Southeast region. With an airport area of 15 Million m², it is the only Southeast airport with sufficient physical space available and capable of containing the necessary expansion. Lately, investments have been done in the airport through the Brazilian Company of Airport Infrastrucute (INFRAERO)*: 1. 2. 3. 4. 5. Refurbishment of the passengers terminal #1; Construction of the remote terminal, containing complete infrastructure to serve passengers; Expansion of the aircraft taxi areas; Expansion of the aircraft parking lot from 113,000 m² to 370,000 m²; Expansion of the runway from 3,000m to 3,600m, reinforcing the security measures and enabling the landing of bigger aircraft at AITN. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 25 ‘* All the works are expected to finish on May, 2014, according to INFRAERO. Around the airport, Vetor Norte’s region has also plenty of space for the establishment of companies, manufacturing industries, clusters, residential areas, conventions centers, hotel and logistic platforms, counting with the entire multimodal access network to AITN and its surrounding developments. Some cities in the region have a very low demographic density, if compared to the largest cities in the State (see table). City Jaboticatubas Confins Territorial Area (Km²) Demographic Density (Inhab/Km²) 1,114.97 15.38 42.36 140.15 Pedro Leopoldo 292.95 200.49 Lagoa Santa 229.27 228.27 São José da Lapa Santa Luzia Vespasiano 47.93 413.09 235.33 862.38 71.22 1,468.49 Ribeirão das Neves 155.54 1,917.90 Average 273.70 655.77 Belo Horizonte 331.40 7,167.02 Source: IBGE Observing the images below, it is possible to understand why AITN is seen as the main growth alternative among the largest airports in the Southeast: Aerial Photograph - Confins Airport - Minas Gerais Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 26 Aerial Photograph - Pampulha Airport - Minas Gerais Aerial Photograph - Congonhas Airport - São Paulo Aerial Photograph - Guarulhos Airport - São Paulo Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 27 Aerial Photograph - Antônio Carlos Jobim (Galeão) Airport - Rio de Janeiro Aerial Photograph - Santos Dumont Airport - Rio de Janeiro Another great differential of AITN versus the others airports in Brazil is the unconditional support of the Government of State for the Project. An example is that since 2004, John Kasarda, considered the greatest specialist in Aerotropolis of the world, acts as an advisor for Government of Minas Gerais in any subject related to the project. According to the Federal Government via information published at www.copatransparente.gov.br, more than BRL 240 Million are being invested in the project of expansion of AITN that will be concluded before that airport concession to private initiative, scheduled for the end of 2013. Additionally, until the end of 2014 another BRL 570 Million will be invested in the development of the roads infrastructure that gives access to the airport and Vetor Norte. All this effort from the government into the development of AITN and its region has already been noticed by the private initiative. Developments of the most varied sectors, from hotel to industries, have already been announced at Vetor Norte, some of them being already under implementation, leading to wealth and opportunity generation. The private investments attraction is a fundamental part of Aerotropolis success, once it closes the virtuous cycle that will favorite the lasting and sustainable development of the region. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 28 Industry-Airport The concept of Industry-Airport is very similar to Aerotropolis’, to what could be said that the first is part of the macro concept and infrastructure of the second. The model that has been structured in many cities of the world, the Industry-Airport, has as its main goal the alignment between the local economic development and the airport operation. The developments that are part of the airport complex are mainly industries, which have a distribution process sensible to time and with high value added products. These are companies that demand agility, speed and connectivity offered by the airport. As well as in Aerotropolis, a quick access to Industry-Airport is needed, regardless of the distance where the companies or multimodal platforms around the airport are located. The essential element for the success of Industry-Airport concept is the average time spent to access it. This time must be between 20 and 40 minutes for the companies there established. Another essential characteristic of an Industry-Airport is the usage of a fiscal neutrality zone, where companies can import raw material and export the final product with reduction or exemption of taxes. This neutrality zone is vital for logistics gains for the companies, given that there is reduction in inventories, saving time in clearance and shipping of the goods, impacting in a great costs reduction. In the end of 2005, it was approved by Receita Federal, the first Industry-Airport of the country, AITN. At that time, the Industry-Airport planning process was structured in 3 stages: pilot project; stage 1 and stage 2. However, due to a lack of a better planning and governmental incentive, the concept did not go further. Still, two companies established their operations around AITN, seeking the opportunity: Clamper, a company specialized in manufacturing Electrical Surge Protection Devices and Gol Linhas Aéreas, through its Aircraft Maintenance Center. The development plan of the Industry-Airport inside AITN will be in charge of the concessionary institution after the public bid, which will occur in the end of 2013. This logistics hub aims to diversify Minas Gerais’ GDP composition, mainly by promoting the electronic components, IT, Biological Sciences, Aerospace and Defense industries. In this way, the Industry-Airport supplies multimodal logistic support for companies turned to exports of goods, which depend on the aerial modal to secure agility and accessibility to their suppliers and consumers. The concession The “Logistics Investment Program: Airport” was introduced in December, 2012, by the Federal Government and has as objective to improve the infrastructure and airport services quality, apart from expanding the air transport supply in Brazil. This set of measures includes the concessions of Galeão Airport (Rio de Janeiro) and AITN to the private initiative. After the approval of the technical, economic and environmental studies of the concessions by the Federal Court of Auditors (TCU), the bidding auction is expected for November 23rd, 2013. The minimum value for the concession is BRL 1.1 Billion, with an initial term of 30 years, as well as several compulsory investments by the concessionary. Investment required during the concession: BRL 3,6 Billion; Time of the concession: 30 years, that can be extended for 5 years, only once; Compulsory investments: Construction of a new passenger terminal with a minimum of 14 boarding bridges until April 30th, 2016, counting with vehicles parking lot and associated terrestrial routes; Expansion of the aircraft yard until April 30th, 2016; Construction of a second independent aircraft runway until 2020; Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 29 In addition to these compulsory investments, 23 indicators of the service quality (IQS) were established by the Government, to measure and contemplate different aspects of the services provided in the airport. The evaluation will be carried out through satisfaction surveys applied to users and through the indicators analysis as well. There are also, several other compulsory improvements for the short term, such as the free WI-FI Internet connection, replacement of the signaling system and improvements in the restrooms. All companies composed by at least one airport operator with experience in airports with flux of passenger of over 35 Million per year can participate in the bidding auction. The operators must have a holding of at least 25% in the company. Infraero acts as a minority shareholder (49% of shares) of the private initiative in the concessions. Both parts must pay-in 50% of the share capital before signing the contract. Investments in progress: Improvement of Vetor Norte’s roads: According to DRE/MG and Government of Minas Gerais, BRL 570 Million is being invested in projects to improve the roads condition in Vetor Norte. This is the second biggest investment related to roads infrastructure of RMBH, according to GEMG, behind only to Linha Verde. The project includes revitalizing 29 kilometers of roads, besides the construction of underground tunnels, tranches and viaducts impacting directly on the traffic capacity of the ways. Cristiano Machado Avenue: One of the main expressways to MG-010, MG-424 and LMG-800. Investments are estimated around BRL 202 Million. Construction of 2 viaducts in the interception with Sebastião de Brito Avenue; investments of BRL 48 Million; Construction of 2 tranches under Waldomiro Lobo Avenue and a viaduct on Saramenha Avenue; Investment of BRL 69 Million; Implementation of an underground tunnel near Vilarinho Station as well as construction of Boulevard Vilarinho; investments around BRL 85 Million. MG-424: State’s highway connecting Belo Horizonte to Vespasiano, São José da Lapa and Pedro Leopoldo will have investments of BRL 111 Million. The highway is being revitalized between the junctions with MG10 and LMG-800, enabling a new access to AITN. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 30 LMG-800: BRL 238 Million will be invested in the duplication of this access way to AITN, precisely between the access to Confins and MG-010 interjection. This highway will include 7 new viaducts and the expansion of its connection to MG-424. Construction of a new bridge of the Rio das Velhas River, on MG-010, unburdening the local traffic and facilitating access to Serra do Cipó. Investments of around BRL 20 Million; Foreseen Investments: Rodoanel: the Metropolitan contour of Belo Horizonte – northern section is a project which is being developed by the Government of Minas in partnership with companies and economic groups through the public-private partnership model. The bid invitation release date is scheduled for January 2014, and will grant to the private initiative the exploration of the services for 35 years. With a 67.5 km extension, the called “Rodoanel” aims to ease the current traffic congestion in Anel Rodoviário and become a new route to the Metropolitan Region, connecting the municipalities of Betim, Contagem, Pedro Leopoldo, Ribeirão das Neves, Sabará, Santa Luzia and São José da Lapa. Metropolitan Rail Transportation (TREM): With investments of BRL 1.8 Billion, this project conducted by the Metropolitan Agency in association with the Public-Private Partnerships Unit and State’s Secretary of Economic Development aims to be a new transport option to the population. RMBH has one of the largest railroad junctions in Brazil, contemplating significant urban agglomerations and some of the new centralities proposed by PDDI as well. The network that involves the TREM project has around 505 km and is formed of 3 stretches that go through RMBH reaching 21 of the 34 municipalities present in the region. The railroad network has parts that are used for passengers and cargo transportation, but its renewal represents a valuable and viable alternative to be used for passenger transportation inside the RMBH. The proposal is in stage of conclusion and modeling. The bid invitation is scheduled for the first term of 2014, and the implementation and operation of the project for between 2016 and 2017. This entire structure, allied to the others investments made or foreseen to the region, provide plenty of opportunities in Vetor Norte, primarily in sectors lacking of infrastructure or with a great demand. The project implementation, with its various investments, has leveraged the growth perspectives for local markets and generated deficiencies in the supply of services and goods for certain sectors. In the following section, it will be presented an overview of the local economy and an analysis of the main sectors in Vetor Norte’s region. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 31 Success Cases – Aerotropolis and Industry-Airports in other cities The Fort Worth International Airport, located between Dallas and Fort Worth, TX, is the second largest USA’s airport in terms of area, and is an example of Aerotropolis. By helping businesses develop, Fort Worth International Airport is the center of a complex products and raw materials distribution network, primarily for the technology sector. The development of the multimodality model through interstate highways and railroads was essential to the airport’s success, as it ensured an efficient access way to national and regional markets. 7 landing strips; More than 50 Million consumers can be reached in less than 24 hours by trucks; 98% of the American population can be reached by truck in less than 48 hours; Aerial access to all the main north-American markets in less than 4 hours and uninterrupted service for more than 170 destinations all around the world; Complete logistic support; Operates 24 hours a day. According to the Airports Council International (ACI), from January to May 2013, more than 24 Million passengers transited at Fort Worth Airport, considered as the eight busiest airports in the world. In the year of 2012, Fort Worth kept its position with more than 58 Million passengers during the year. One crucial point of development for Fort Worth was inauguration in 1997, of a FedEx branch. The impact was direct and immediate, with the establishment of over 100 global companies in the area, such as Dell, AT&T, Nokia, Bell Helicopters and Gulfstream. Also located in Texas, at about 35 km away from Fort Worth International Airport, is Forth Worth Alliance Airport, considered the first entirely industrial airport of the world. Services such as packaging, inventory management, transport and cargo tracking are crucial points to attracting manufacturing and third part logistics companies, as well as Airlines and distribution companies. Alliance Center: Business complex of high density, including aviation companies; Alliance Commercial Center turned to high technology companies; High Technology Center; Complex providing restaurants, shops and other services companies; Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 32 3.2 Economic Environment Overview With approximately 20 Million inhabitants, Minas Gerais is the second largest Brazilian state in terms of population and third in terms of economic relevancy, behind only of São Paulo and Rio de Janeiro. Also, Minas Gerais GDP represents 9.3% of the national measure, according to investment bank Itaú BBA. The State stands out for agriculture, mineral extraction industry and manufacturing industries, having the second largest industrial park of the country, behindonly to São Paulo’s. The central region of Minas Gerais, where RMBH is located, is the most populous in the State, containing 7 Million of inhabitants (35.6% of the total for the state). It is also, the most prosperous, being responsible for 46.6% of GDP, 60% of exports and 52.1% of formal employment in Minas Gerais, according to the Municipalities Association of Minas Gerais (AMM). The sectors of most relevance in the region’s GDP are: metallurgical, automotive, petrochemical, foods and beverages and mineral extraction industries. The region also counts with centers of excellence for software and biotechnology research fields. Again, according to Itaú BBA, the municipality of Confins has the highest GDP per capita in Minas Gerais: (BRL 239,774/inhabitant). In the last decade, Vetor Norte has been passing through significant structural and economic transformations, which in its majority have been driven by the State’s Government strategies turned to RMBH’s development. Among the regional vectors, Vetor North is the one that received most investments from the State, highlighting the Linha Verde, Administrative City and AITN’s development in Confins. The year of 2005 was very important for Vetor Norte’s economic growth, marked by the beginning of works in Linha Verde and AITN’s recovery, after the long distance flights being moved to Confins, in March 13th, 2005. Consequently, the number of passengers in AITN in 2005 was 7 times higher than the 2004’s figure. Two years later, in 2007, Government of Minas Gerais launched the Administrative City, a complex located near MG-010 highway, in the borders of Belo Horizonte, Vespasiano and Santa Luiza municipalities and which counted with investments of BRL 1.2 Billion. All these investments had immediate impact on the region’s economy, not only by generating direct Jobs, in the Government’s projects, but also in the private initiative developments, attracted by the growth perspectives in the region. The capital attraction suits the State’s plan of promoting a socioeconomic development of Vetor Norte and RMBH, in an orderly way, as detailed in the PDDI. The Metropolitan Agency and PDDI The PDDI was developed aimed at RMBH’s development planning, including the roles of each vector in the region, the relationship between the municipalities and different levels of centralities. The central aspect of the plan for RMBH is the proposal of a metropolitan territorial restructuring that instead of just seeking immediate solutions, go further to drive the structural transformations of the metropolis. Such restructuring aims to anticipate the future social demands, taking into consideration the potentialities and particularities of each vector of RMBH, as well as embracing issues such as the better use of the fields, and orderly growth. To that effect, its implementation demands higher control and regulation of the public authority over the real estate market, in addition to investments in infrastructure, an essential element to attract even more capital. Another specific policy of PDDI for RMBH is based on the concept of network centralities. Aiming to reduce the dependence of the central core of Belo Horizonte, it will be created new centralities in RMBH. These new centralities are regions that have as objective to promote a better job, services and commerce distribution, unburdening Belo Horizonte’s hyper center. This strategy replaces the current structure, counting with a centralized convergent transport system, and going for a multimodal transportation network, improving urban mobility. The integrated mobility network will promote the transport fluxes between the cities of RMBH, recovering the roads system for passengers transport. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 33 In this way, by adoption of a continuous process of joint development involving several public institutions and society, the Metropolitan Agencies aims to conduct a metropolitan planning for RMBH. The Agencies of Metropolitan are territorial entities linked to SEGEM, representing RMBH and Metropolitan Region of Vale do Aço (RMVA). The Agencies are executive institutions that have administrative and financial autonomy and acts in the intermediation between the municipalities, federal and state entities as well as private institutions, in order to promote the sustainable growth of the metropolitan areas, through basically the execution of the goals and priorities included in the PDDI. One of the three new Metropolitan Centers (South, West and North) will be developed in Ribeirão das Neves, city part of Vetor Norte. This level of planning proposed by the State Government attracts investments from private initiative as far as it identifies the economic particularities of each region and proposes to develop them, determining the goals and actions that will be used to approach them. Consequently, each day more and more developments are announced for the region. The next section includes details about main companies which are already established or that have investments in development in the region. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 34 3.3 Developments and Opportunities 3.3.1. Developments Nowadays, approximately 75 projects are under development or have already been announced for Vetor Norte’s cities. In this section, the main projects will be identified, firstly in an overview map and secondly, in a detailed description. Vetor Norte – Developments by Segment: 30 22 13 5 5 Legend Housing Real Estate Industry Services Aviation Commercial Real Estate Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 35 Confins 1 Confins is one of the smallest cities of Vetor Norte by territorial area, but is the richest city of Minas Gerais in terms of GDP per capita (240,000/inhabitant). Located 38 km away from Belo Horizonte, the municipality is strategically located in the center of Vetor Norte and is very close to the main axis of development of the region, the Tancredo Neves International Airport. The city has two main access roads, through the MG-424 and MG-010, where two of the biggest projects of investment were developed by the Government of State: the Linha Verde and Administrative City. According to Copasa (Sanitary Company of Minas Gerais), the entire population benefits from the treated water network. Confins has 5 schools, being 1 owned by the State, 2 by the municipality and 1 private one, attending an estimated population of 6,300 inhabitants. Besides Gol’s Aircraft Maintenance Center, the city also has a very important real estate under development, the AlphaVille Confins. However, AlphaVille did not provide further data on the Project so it could not be included in this Memorandum. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 36 DEVELOPMENTS 1. GOL’s Aircraft Maintenance Center: Inaugurated on September 15th, 2006, the center operates in Tancredo Neves International Airport and is responsible for the periodic maintenance of all Gol’s aircraft. It includes an administrative office, two hangars, storage rooms, a warehouse and support areas. Data Investment: BRL 70 Million Status: Operating Area: Development: Gol Linhas Aéreas Site: www.voegol.com.br Complimentary Data: Job Positions Created: 1,100 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 37 Jaboticatubas 3 4 1 2 Jaboticatubas is the largest city of Vetor Norte in terms of territorial area, presenting one of the lowest demographic density rates of the region and an estimated population of 18,000. The total area is of 1,115 km². Located at about 67 km NE from Belo Horizonte, the municipality has some of the most relevant real estate developments of Vetor Norte, especially Reserva Real, property of Design Resorts Group. Departing from Belo Horizonte, the main ways of access to Jaboticatubas are the MG-010 road, passing by Lagoa Santa and the MG020, passing by Santa Luzia. Until 2011 (latest data available), only 52% of the population had access to treated water, mainly due to the large portion of the population concentrated in the rural area and the great extension of the territory. Jaboticatubas has 15 schools (3 pertaining to the state, 10 pertaining to the municipality and 2 private ones). Data surveyed included 6 real estate developments in the municipality, with estimated investments of over BRL 1.5 Billion. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 38 DEVELOPMENTS 1. Reserva Real: The real estate development from Design Resorts Group is composed by housing condos, commercial properties and a top-class infrastructure to attend to visitors and condominium members. Inside Reserva Real’s area are two other developments: Biovillas and Cidade da Cultura. Data Investment*: BRL 1,5 Billion Status: Completion scheduled for 2014 (some phases have been already completed) Area: 14 Million m² Development: Design Resorts Site: www.reservareal.com.br Complimentary Data: Job Positions Created: 410 direct and 6,000 indirect jobs *Values refer to the 3 projects (Reserva Real, Biovillas, Cidade da Cultura) 1.1 Biovillas: Real estate development as a standardized housing condominium inside Reserva Real. Data Status: First units will be delivery in 2015 Area: 607,597m² Development: Design Resorts Site: www.biovillas.com.br 1.2. Cidade da Cultura: Another real estate development inside Reserva Real’s area. In the future, it will be a business, tourism, entertainment and culture complex formed of squares, an aquatic park, a theme park, a night club, an university city, an area dedicated to enterprise offices, a commercial center, an exhibition center and parking lots containing over 7,000 spaces. Data Status: Under construction Area: 700,000m²; inside Reserva Real Development: Design Resorts Site: - 2. Villa Verde Park Residence: Real estate development marked by a housing land, with complete infrastructure. Data Investment: BRL 35 Million Status: Awaiting final approval Area: 2,000,000m² Plots: - Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 39 Development: Grupo KST/Brasiliana Site: www.brasiliana.com Complimentary Data: Job Positions Created: - 3. Parque Cittá: Real estate development that includes a private housing condominium with complete infrastructure on the margins of MG-010 inter-municipal road. Data Investment: BRL 25 Million Status: Operations start on February 2014 Area: 2,525,829m² Plots: 950 fields of 1,000 m² each Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: - 4. Ecoville: Real estate development that includes a private housing condominium with complete infrastructure on the margins of MG-010 inter-municipal road. Data Investment: BRL 12 Million Status: Completion scheduled for August 2014 Area: 934,313m² Plots: 355 plots of 1,000m² each Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: 71 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 40 Lagoa Santa 8 3 9 8 9 9 1 2 5 3 4 2 2 4 3 5 1 1 6 6 2 4 1 6 10 3 7 4 8 7 1 3 5 7 10 2 With a population of over 57,000 inhabitants and a territorial area of 229 km², Lagoa Santa is located to the North of Belo Horizonte and can be accessed by the MG-010 road, just after AITN’s main entrance. With the highest number of developments identified, Lagoa Santa is one of the most prosperous cities of Vetor Norte, presenting a high GDP per capita (BRL 16,000/inhabitant). The entire urban population benefits from garbage collection and treated water networks. There are 45 schools, being 5 of them owned by the State, 22 by the municipality and 18 private ones. Lagoa Santa is the only city of Vetor Norte that currently has an optical fiber network. In all, data surveyed included 87 different relevant developments in the municipality, 31 of them being industries, 34 related to the real estate sector, 19 services related and 3 of them aimed at the aviation sector. Some big companies such as Localiza, Locamig, Madeirense, Dilasa and Vitória Group have offices in the region of Lagoa Santa. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 41 Developments 1. GC Development: Real estate development mixed of housing, commercial and services plots, located in the center of Lagoa Santa. Data Investment: BRL 90 Million Status: Area: 50,000m², with a construction potential of 84,000m² Development: Grupo Cidade Site: www.gcidade.com.br Complimentary Data: Job Positions Created: - 2. Outeiro das Gerais: Real estate development located 1.5 km away from Lagoa Santa and 10 km away from AITN. Data Investment: BRL 34 Million Status: Release date scheduled for August 2016 Area: 1,350,000m² Plots: 532 plots varying from 525m² to 4,000m² Development: Cidade Group Site: www.gcidade.com.br Complimentary Data: Job Positions Created: - 3. Edifício Park Lund: Real estate development. Data Investment: BRL 25 Million Status: Area: Development: Partners Group and Caparaó Group Site: www.parklund.com.br Complimentary Data: Job Positions Created: 148 direct jobs 4. José Miguel Salomão: Real estate development consisting of a building in the center of Lagoa Santa. Data Investment: BRL 21 Million Status: Release date scheduled for May 2015 Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 42 Area: 4,000m² Number of Apartments: 102 (of 2 and 3 rooms) Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: - 5. Lagoa Santa Park Residence: Real estate development that includes a private housing condominium with complete infrastructure. Data Investment: BRL 20.8 Million Status: Delivery scheduled for August 2014 Area: Plots: 220 plots ranging from 525m² to 2.000m² Development: Grupo KST/Brasiliana Site: www.brasiliana.com Complimentary Data: Job Positions Created:- 6. Fazenda das Bicas: Real estate development that includes a private housing condominium with complete infrastructure, located in the margins of Via Leste. Data Investment: BRL 20 Million Status: Approval scheduled for May 2015 Area: 651,200m² Plots: 700 plots Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: 148 direct jobs 7. Condomínio 4 Estações: Real estate development composed of housing and commercial plots located 3km away from Lagoa Central and 15 km away from AITN. Data Investment: BRL 17 Million Status: Release date scheduled for July 2014 Area: 660,000m² Plots: 539 plots of 525m² each Development: Cidade Group Site: www.gcidade.com.br Complimentary Data: Job Positions Created: - Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 43 8. Golden Garden: Real estate development consisting of a housing condominium. Data Investment: BRL 15 Million Status: Release date scheduled for June, 2014 Area: 984,224m² Plots: 447 plots with more than 1.000m² each Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: - 9.Villa Paradiso Park Residence: Real estate development consisting of a housing condominium. Data Investment: BRL 12.9 Million Status: Approved – Construction will begin on March, 2014 Area:Plots: 215 plots ranging from 525m² to 868m² each Development: Grupo KST/Brasiliana Site: www.brasiliana.com Complimentary Data: Job Positions Created: - 10. Condados do Ipê: Real estate development consisting of a housing condominium. Data Investment: BRL 12.5 Million Status: Operations will start in 2013 Area: Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: - Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 44 1. Clamper Indústria e Comércio: Operates in research, development and manufacturing of Electrical Surge Protection Devices and is considered a national and international reference in its segment. Data Investment: BRL 6.9 Million Status: In operation Area: Development: Clamper Group Site: www.clamper.com.br Complimentary Data: Job Positions Created: 158 direct jobs 1.1. Biometrus Indústria Eletroeletrônica: Operates in development and manufacturing of electronic security and control solutions, primarily through the use of biometrical technologies. Data Investment: BRL 321,000 Status: In operation Area: Development: Clamper Group Site: www.biometrus.com.br Complimentary Data: Job Positions Created: 7 direct jobs 1.2. Nanum Nanotecnologia: Operates in research, development and manufacturing of nano-structured metallic oxides as well as final products that uses these materials. Data Investment: BRL 12,500 Status: In operation Area: Development: Clamper Group Site: www.nanum.com.br Complimentary Data: Job Positions Created: 12 direct jobs 2. Controltec Controles e Montagens Eletromecânicas Ltda: An automation engineering company which aims to produce different kinds of steel boxes and panels, especial projects of automation systems and industrial controls. Dados Investment: BRL 5 Million Status: Operations start in the beginning of 2014 Area: Development: Controltec Site: www.controltec.ind.br Complimentary Data: Job Positions Created: 80 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 45 3. Geosedna Perfurações Especiais S/A: Company specialized in rotopercussive drilling for minerals research such as nickel, gold, copper, platinum, diamond, phosphate and iron ore. Data Investment: BRL 4 Million Status: Operations start in the beginning of 2014 Area: Development: Geosedna Site: www.geosedna.com.br Complimentary Data: Job Positions Created: 20 direct jobs 4. Rede Tecnologia em Sondagens: Drilling company aimed at mineral research, performs drilling services of diamond core drilling for the main mining companies in Brazil. Data Investment: BRL 4 Million Status: In operation Area: Development: Rede Tecnologia Site: www.sondagens.com.br Complimentary Data: Job Positions Created: 25 direct jobs 5. McNeilus Brasil: Production of concrete centers and mixers. Data Investment: BRL 4 Million Status: In operation Area: Development: McNeilus Site: www.mcneilusbrasil.com.br Complimentary Data: Job Positions Created: 35 direct Jobs 6. Philips: Production of magnetic resonance and computerized tomography devices. Data Investment: BRL 2 Million Status: In operation Area: Development: Philips Site: www.philips.com.br Complimentary Data: Job Positions Created: 200 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 46 7. DiaMed Latino América S.A (Bio-Rad): Operates in the research, development, production and services of laboratorial diagnosis. It is a subsidiary of Bio-Rad Laboratories, Inc. located in Hercules, California. Data Investment: BRL 4 Million Status: In operation Area: Development: DiaMed Latino América S.A. Site: www.diamed.com.br Complimentary Data: Job Positions Created: 120 direct jobs 8. Marangoni: Operates in various sectors of the tires industry. Its main activities are organized in six main business areas controlled by different operating units. Data Investment: BRL 5 Million Status: In operation Area: Development: Marangoni Site: www.marangonidobrasil.com.br Complimentary Data: Job Positions Created: 120 direct jobs 9. Labtest: Its portfolio of products includes reagents and equipment dedicated to different types of clinical analysis labs. Labtest develops produces and commercializes reagents kits. Data Investment: BRL 1.6 Million Status: In operation Area: 12,000 m² Development: Labtest Site: www.labtest.com.br Complimentary Data: Job Positions Created: 170 direct jobs 10. Serv - Imagem Assistência Técnica Ltda: A technical assistance firm for image diagnosis equipment in Brazil. It is the only company authorized to provide maintenance services for Philips VMI equipment. Data Investment: BRL 2 Million Status: In operation Area: Development: Serv Imagem Site: www.servimagem.com.br Complimentary Data: Job Positions Created: 10 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 47 1. Verdemar Supermercado & Padaria: Supermarket chain based in Belo Horizonte, aimed at a target audience of classes A and B, specializes in luxury goods, noble items, seafood and others. Data Investment: BRL 50 Million Status: Area: Development: Verdemar Site: www.verdemar.com.br Complimentary Data: Job Positions Created: - 2. Imballaggio: Manufactures a varied line of packaging and artifacts made of paper, supplying clients situated in all states of Brazil. Dados Investment: BRL 25 Million Status: In operation Area: Development: Imballaggio Site: www.imballaggio.com.br Complimentary Data: Job Positions Created: 185 direct jobs 3. Minas Park Estacionamento: Parking lot with space for 1,100 vehicles and covered area. Located near the access to AITN. Data Investment: BRL 20 Million Status: In operation Area: Development: Minas Park Site: www.minaspark.com.br Complimentary Data: Job Positions Created: - 4. Hotel Ramada: Hotel located in Lagoa Santa, with a total number of 140 rooms. Data Investment: BRL 21 Million Status: In operation Area: 10,500m² Development: Ramada Site: www.ramadabrasil.com.br Complimentary Data: Job Positions Created: 100 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 48 5. Hotel Super 8: Project of hotel containing four floors, two elevators and 100 rooms, 8 of them provided with accessibility facilities. Data Investment: BRL 11 Million Status: Operations scheduled to begin on December 2013 Area: 3,400m² Development: HotelPar Site: www.hotelpar.com.br Complimentary Data: Job Positions Created: - 6. Hotel Promenade: An international standard hotel with modern infrastructure and 135 rooms. Data Investment: BRL 40 Million Status: Operations scheduled to begin in 2014 Area: Development: Construtora Dominus e Promenade Site: Complimentary Data: Job Positions Created: - 7. Hotel Comfort Confins: Hotel located in Lagoa Santa, 2 km away from AITN, with more than 280 rooms. Data Investment: BRL 10 Million Status: Operations scheduled to begin in 2014 Area: Development: Grupo Caparaó, Grupo Partners Site: www.caparao.com.br / www.gppl.com.br Complimentary Data: Job Positions Created: - 8. Hotel Hora: This hotel with 49 apartments and 3 independent commercial shops is located in the center of Lagoa Santa. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 49 Data Investment: BRL 5.5 Million Status: Operations scheduled to begin in 2013 Area:Development: Grupo Partners Site: www.gppl.com.br Complimentary Data: Job Positions Created: - 9. L´acqua Shopping: Shopping mall including an anchor store of 800m² and 34 stores of 40m² each, as well as food court facilities to attend the local population. Data Investment: BRL 2 Million Status: Operations scheduled to begin in 2013 Area: 5,000m² Development: Vitória da União Group Site: www.gvu.com.br Complimentary Data: Job Positions Created: 90 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 50 1. Metropolitan Business Center: Real estate development including a conglomerate of industries and enterprises. Among its facilities are wide large roads for traffic of trucks, a 300,000 liters water tank, an internal optical fiber network, internet access, illumination and sanitation, three stages electrical network, selective garbage collection and inter-municipal bus lines stops. On the second stage of the project is planned a Commercial Center of 30,000m², including business towers, hotels, a convention center, restaurants, a parking lot and 2 heliports. Data Investment: Status: Area: 339,216m² Plots Area: 149.613m² Development: Morada Imóveis Site: www.metropolitanbc.com.br Complimentary Data: Job Positions Created: 2. Laguna Residence Mall: Real estate development that will combine, in the same building, 90 functional apartments and a shopping mall. Data Investment: BRL 15 Million Status: Operations scheduled to begin in March 2015 Area: Development: Construtora Castor and Grupo Partners Site: www.construtoracastor.com.br / www.gbbl.com.br Complimentary Data: Job Positions Created: 3. Wilton Amaral: Real estate development including a commercial building of 4 stories, 72 rooms, 11 stores and a parking lot. Data Investment: BRL 5 Million Status: Area: Development: Grupo Partners Site:www.gbbl.com.br Complimentary Data: Job Positions Created: 4. Distrito Industrial Carmo Couri: Real estate development consisting of logistics warehouses, located at about 4km from AITN. Data Investment: BRL 20 Million Area: 60,000m² Development: - Status: In operation Constructed Area: 16,000m² Site: - Complimentary Data: Job Positions Created: 200 jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 51 1. CTCA: The CTCA is a high-tech district intended to conglomerate education, research and development institutions as well as companies from the aerospace, transport and military sectors. Activities of training and development of professionals from these sectors will be held at CTCA. Data Investment: BRL 120 Million from Government (BRL 1.5 Billion from private sector) Status: Construction started in June 2012 Area: 1.3 Million m² Development: Site: Complimentary Data: Job Positions Created: - 2. PAMA/FAB: The Aeronautic Material Park of Lagoa Santa (PAMA LS) is an industrial establishment that offers services of manufacturing, inspection, maintenance and repair of a wide range of aircraft from Brazilian Air Force (FAB). Besides helping in the control of airspace in Lagoa Santa and Confins, PAMA LS gives courses on equipment and aircraft maintenance, according to the latest methods of revision, control and repairs. 3. CIAAR: The Instruction and Adaptation Center of Aeronautics was created in September 26th, 1983, to operate in planning, coordination, control and execution of the plans and education programs related to the military personnel adaptation for Brazilian Air Force. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 52 Pedro Leopoldo 1 1 2 1 3 4 1 5 2 Located to the North of Belo Horizonte and in the East of Confins, Pedro Leopoldo is where some of the largest companies from Vetor Norte are based, such as Precon and Lapa Vermelha Mining. With approximately 293,000 inhabitants and a GDP per capita of BRL 17,900/inhabitant, the city has 51 schools, being 9 of them private ones, 10 owned by the state and 32 owned by the municipality. Also, the city is home for Fundação Pedro Leopoldo, a higher education institution that offers graduate courses in Management, Accounting Sciences, Logistics and Law, as well as several MBA and post-graduate courses. According to Copasa, the majority of the population has access to treated water and round 83% benefit from sewage treatment system. In this Memorandum, 12 developments were surveyed in Pedro Leopoldo. The real estate investments totalize BRL 54 Million, between actual and projected progress. A vast number of companies are established in Pedro Leopoldo, such as Holcin, Cimentos Cauê. Interciment, Suprema Serviços Industriais e PHV. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 53 DEVELOPMENTS 1. Fundação Pedro Leopoldo: Education institution which offers the graduate courses of Management, Accounting Sciences, Logistics and Law. At post-graduate level, it offers the Professional Master’s degree in Management, the MBA in Finance and Controlling, the MBA in Project Management, Strategic Logistics and Marketing. Data Investment: Status: In operation Area: 20.000m² Constructed Area: 5.000m² Development: Site: www.fpl.edu.br Complimentary Data: Job Positions Created: - 1. Precon Industrial e Precon Engenharia: Produces pre-manufactured structures, architectural concrete panels, viaducts, bridges, catwalks, hollow score slabs, crossties, asbestos-cement roofing tiles, PVC tiles and others. Data Investment: BRL 21.5 Million Status: In operation Area: 500,000m² Constructed area: 70,000 m² Development: PRECON Site: www.precon.com.br Complimentary Data: Job Positions Created: 308 direct jobs 2. Mineração Lapa Vermelha: Its main activity is to extract and process limestone. Being one of the most traditional suppliers for the national steelmaking park and all the local Market for civil construction, Lapa Vermelha’s mines and facilities are located in Pedro Leopoldo and Confins, 40 km away from Belo Horizonte. The company has also its own bus terminal connected to the central line of FCA (Center-Atlantic Railroad), with capacity to transport 150,000 tons per month. There are two boarding platforms, one of them equipped with a flow weighting system. Data Investment: Status: In operation Area: Development: Site: www.lapavermelha.ind.br Complimentary Data: Job Positions Created: 170 direct and 60 indirect jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 54 1. Central Park: Real estate development consisting of a residential area, located at about 10 minutes from AITN and 20 minutes from the Administrative City of Belo Horizonte. Data Investment: BRL 12 Million Status: Release date scheduled for December 2013 Area: 263,021m² Development: Construir DEVELOPMENTS Site: http://www.construirDEVELOPMENTS.com.br/DEVELOPMENTS/2/central-park Complimentary Data: Job Positions Created: 52 direct jobs 2. Portal das Acácias: Real estate development consisting of a residential area, located at about 10 minutes from AITN and 20 minutes from the Administrative City of Belo Horizonte. Data Investment: BRL 8 Million Status: Release date scheduled for December 2013 Area: 180,284m² Plots: 261 plots with more than 360m² Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br/DEVELOPMENTS/8/portal-das-acacias Complimentary Data: Job Positions Created: 52 direct jobs 3. Fazenda Ipê: Real estate development that includes a private housing condominium with complete infrastructure, a recreational area and a large green area. Data Investment: BRL 4.5 Million Status: Approval scheduled for April 2014 Area: 218,265m2 Development: Construir DEVELOPMENTS Site: www.construirempreeendimentos.com.br Complimentary Data: Job Positions Created: 29 direct jobs 4. Portal das Acácias II: Real estate development consisting of a residential area, located at about 10 minutes from AITN and 20 minutes from the Administrative City of Belo Horizonte. Data Investment: BRL 7 Million Status: Operations scheduled to begin on April 2014 Area: 163,826m² Plots: 262 plots with more than 360m² each Development: Construir DEVELOPMENTS Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 55 Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: 49 direct jobs 5. Residencial José João Teixeira: Real estate development consisting of a residential area located in the Center of Pedro Leopoldo. Data Investment: BRL 5.5 Million Status: Approval scheduled for June 2014 Area: 134,755m² Plots: 176 plots with more than 360m² each Development: Construir DEVELOPMENTS Site: www.construirDEVELOPMENTS.com.br Complimentary Data: Job Positions Created: 49 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 56 1. Fashion City Brasil: The FCTY - Fashion City Brazil is the first onestop shopping mall in the country and is the first fashion sector integrated business center in America Latina. FCTY was developed to meet a huge demand of the domestic fashion Market, which has claimed for a structured where businessmen of the sector could converge their interests and achieve the potential of the companies. The shopping mall offers a complete infrastructure including a food court, a parking lot with over 1,800 spaces, banking branches and others. It also includes a hotel with 150 rooms, a recreational area, a fitness room and a conference center. Data Investment: BRL 141 Million Status: Construction is scheduled to begin on March 2015 Area: 205,000m² Constructed Area: 86,000m² Development: Precon Site: www.fashioncitybrazil.com.br Complimentary Data: Job Positions Created: 1,500 direct and 5,000 indirect jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 57 Ribeirão das Neves 1 Ribeirão das Neves is the largest city of Vetor Norte in terms of population (not considering Belo Horizonte), with approximately 316,000 inhabitants. Located at about 35 km from Belo Horizonte, the municipality has one of the lowest GDP per capita indexes (BRL 6,500/inhabitant). Approximately 100% of the population benefits from treated water services and 80% benefits from basic sanitary services. Some relevant companies that have established their offices in Ribeirão das Neves are Embrasil and TelhaNorte. Nowadays, 135 schools operate in the city, being 56 owned by the State, 54 by the municipality, 1 by the Federal Government and 24 private ones. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 58 DEVELOPMENTS 1. SIX Semicondutores: The company is a result of partnerships between Six Soluções Interligentes, BNDES, BDMG, IBM, Matec Investmentos and Tecnologia Infinita WS-Intecs, to construct the most advanced semiconductors manufacturing plant in the south hemisphere. Dados Investment: BRL 1.2 Billion Status: Construction is scheduled to begin in 2015 Area: Development: SIX Soluções Inteligentes, BNDES, BDMG, IBM, Matec Investmentos and Tecnologia Infinita WSIntecs. Site: www.sixsemicondutores.com.br Complimentary Data: Job Positions Created: 300 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 59 Santa Luzia 1 2 1 Santa Luzia is one of the closest cities to Belo Horizonte, located 30 km away. Its population is of around 213,000 inhabitants, presenting one of the highest demographic densities in the region (862 inhabitants/m²). According to Copasa, the entire population of Santa Luzia has access to treated water and about 90% benefits from a sewage system. According to IBGE’s latest survey, Santa Luzia’s GDP per capita is of BRL 10,300/inhabitant. Companies such as Café 3 Corações, Orthocrin, ASN Industrial, Fasal, Ingelza, ThyssenKrupp Metalúrgica Santa Luzia, Weber Quartzolit, Roca, Cecrisa, Lafarge, Ambev and Vale are established in the municipality of Santa Luzia. There are 80 schools in the city, 33 of them being private ones, 21 owned by the state and 26 owned by the municipality. DEVELOPMENTS: Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 60 1. BH International Medical City (BHIMC) and Logistics Platform: The BHIMC is a unique venture for development of an international health, education and research complex. It also includes a residential area and a multimodal logistics platform. Data Investment (1st stage): BRL 500 Million Status: Masterplan is under development Total Area: 7 Million m² Logistics Platform Area: 2.7 Million m² Development: Medical City Ltda. Site: www.medicalcity.com.br Complimentary Data: Job Positions Created: - 2. Hotel Super8: A four-story hotel with two elevators and 100 apartments. Data Investment: BRL 11 Million Status: Construction is scheduled to begin on April 2014 Area: 3,400m² Development: HotelPar Site: Complimentary Data: Job Positions Created: - 1. Engefril: A manufacturing plant aimed to produce fridge equipment including continuous freezing tunnels, evaporators, condensers, chillers and ice machines. Data Investment: BRL 5 Million Status: In operation Area: 22 mil m² Development: Engefril Site: www.engefril.com.br Complimentary Data: Job Positions Created: 400 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 61 São José da Lapa 1 1 2 The municipality of São José da Lapa is located in North of Belo Horizonte, in the margins of MG-424 road, after the exit to Confins. With approximately 21,000 inhabitants, the city presents a GDP per capita of BRL 16,000/inhabitant and a strong part of its economy turned to the aeronautic sector (as it is very close to the AITN). According to Copasa, 100% of the city’s urban population benefits from treated water and the entirety of sewage produced is collected, although only 51% of it is treated, a very high level for national standards. The city has 11 schools, two of them belonging to the State and 9 of them to the municipality. Other relevant developments situated in São José da Lapa are the Laboratório Globo and Ical – Indústria de Calcinação. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 62 DEVELOPMENTS 1. IAS: The IAS is a very experienced company in the maintenance of motors and electrical, hydraulic and pneumatic systems components for the aeronautic sector. Data Investment: BRL 15.5 Million Status: In operation Area: Development: IAS Site: http://www.ias.ind.br/ Complimentary Data: Job Positions Created: 180 direct jobs 1. Norte Empreendimentos: The Project aims to implement a dynamic development that will attend the population expectative in the North of RMBH. Involving the urbanization of 750 hectares, the project will permit the development of 9.3 Million m² of constructed area until 2050, including 40,000 housing units, attracting more than 100,000 new residents and creating around 50,000 new jobs. This future scenario represents the first step towards approximating the population to their workplace. Data Investment: BRL 310 Million* (infrastructure construction costs) General Sales Value: BRL 1.1 Billion Status: Projects concluded Total Constructed Area: 9.3 Million m² Plots Area: 3.4 Million m² Development: Norte Empreendimentos Site: Complimentary Data: Job Positions Created: - 2. Residencial Monte Bello: Real estate development that includes a private housing condominium with complete infrastructure, composed by 640 plots with more than 360 m² of area. Data Investment: BRL 16.5 Million Status: Approval scheduled to October 2014 Area: 728,304m² Plots: 640 plots with more than 360 m² Development: Construir Empreendimentos Site: http://www.contruirempreendimentos.com.br Complimentary Data: Job Positions Created: - Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 63 Vespasiano 1 2 3 4 6 7 3 5 1 2 5 4 6 1 Vespasiano has a total area of 71 km² and a population of 114,000 inhabitants, presenting one of the highest demographic densities within Vetor Norte. Located to the North of Belo Horizonte, the city benefits from the investments made by the Government of Minas Gerais regarding logistics infrastructure and has since then, attracted huge amounts of investment. The GDP per capita of the city is of BRL 12,500/inhabitant. According to Copasa, the entire population of Vespasiano benefits from treated water and the entirety of the sewage produced is collected by the system, although only 64% is treated. The city counts with 55 schools, 13 of them being private ones, 12 belonging to the state and 30 belonging to the municipality. Several big companies are established in Vespasiano: Soecon, Tenda, BMS, Bramex, Hermes Pardini, Sandvik, Premo, DDM, Convap Engenharia and MDE Manufatura e Desenvolvimento de Equipamentos. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 64 DEVELOPMENTS 1. Alphaville: Real estate development that includes residential and commercial plots. In a total area of 873,283m², there are 542 residential plots varying from 450m² to 791m², 14 commercial plots of 1.000m² each and 1 plot of 12,000m² destined to the construction of an education institution or a shopping mall. It will also include a leisure club offering spas, a gym and 9 theme squares inside the condominium. Data Investment: BRL 68 Million Status: It was released in 2002 Area: 873,283m² Complimentary Data: Job Positions Created: 325 jobs created during the construction and 2,168 during the occupation. 2. Serra do Curral Residence: Real estate development in the format of a residential building with 2-room apartments plus suite and 2 floor plants alternatives. Altogether there are 40 apartments ranging from 71 m² to 86 m². Data GENERAL SALES VALUE: BRL 12 Million Status: Construction is scheduled to end on December 2013 Area: Apartments: 40 apartments of 71m² to 86m² Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - 3. Serra do Cipó Residence: Real estate development in the format of a residential building with 5 floor plants alternatives. Data GENERAL SALES VALUE: BRL 17.5 Million Status: Area: Apartments: 36 apartments of 3 or 4 rooms Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - 4. Serra da Canastra: Real estate development in the format of a residential building with 11 apartments of approximately 200m², 2 suites and 2 semi-suites, as well as recreational area and gym room. Data GENERAL SALES VALUE: BRL 10 Million Status: Area: Apartments: 11 apartments with approximately 200m² of area Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 65 Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - 5. Serra da Gandarela: Real estate development in the format of a residential building. Data GENERAL SALES VALUE: BRL 4.3 Million Status: Area: Apartments: 20 apartments Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - 6. Serra das Aroeiras: Real estate development in the format of a residential building. Data GENERAL SALES VALUE: BRL 10 Million Status: Area: Apartments: Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - 7. Serra dos Cocais: Real estate development in the format of a residential building. Data GENERAL SALES VALUE: BRL 11 Million Status: Construction scheduled to end on December 2013 Area: Apartments: 18 apartments of 3-rooms Development: Alsa Engenharia Site: www.alsaengenharia.com.br Complimentary Data: Job Positions Created: - Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 66 1. Cimentos Liz: A cement industry that operates nation-wide. Data Investment: BRL 564 Million Status: In operation Area: Development: Cimentos Liz Site: www.cimentosliz.com.br Complimentary Data: Job Positions Created: 800 direct jobs 2. Tecnometal: The Company operates in the industrial mechanics segment, developing projects, manufacturing and repairing equipment and components. Tecnometal Group produces bulk handling systems, mineral processing equipment and parts and components for different Brazilian industry segments. Data Investment: BRL 50 Million Status: In operation Area: 170,000m² Constructed Area: 20,000m² Development: Tecnometal Site: www.tecnometal.com.br Complimentary Data: Job Positions Created: 1,000 direct jobs 3. DELP Engenharia Mecânica: Operates in development and implementation of projects from basic engineering to manufacturing and delivery of equipment. Nowadays, DELP focuses on the Oil&Gas, Energy, Naval and General Industries. Data Investment: BRL 9.2 Million Status: In operation Area: 300,000m² Constructed Area: 33,479 m² Development: DELP Site: www.delp.com.br Complimentary Data: Job Positions Created: 4. Belgo Mineira Bekaert Artefatos de Arames Ltda: Metallurgical industry that produces strong steel cables and wires for the entire South America’s market. Data Investment: Expansion plan of US$ 3 Million per year Status: In operation Area: Development: Belgo Site: www.belgobekaert.com.br Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 67 5. Orguel Plataformas: Orguel is a manufacturer and rental company for aerial work platforms. Data Investment: BRL 10 Million Status: In operation Area: Development: Orguel Group Site: www.orguelplataformas.com.br Complimentary Data: Job Positions Created: 25 direct jobs 6. Mecan: Metallurgical company which manufactures machines and equipment aimed at the Construction, Oil&Gas and Mining sectors. Data Investment: BRL 20 Million Status: In operation Total Area: 350,000m² Constructed Area: 50,000m² Development: Grupo Orguel Site: www.mecan.com.br Complimentary Data: Job Positions Created: 1,000 jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 68 1. Hotel San Diego Express: Hotel managed by Arco chain, with 85 rooms. Data Investment: BRL 12 Million Status: In operation Area: 4,224m² Development: Rede Arco Site: www.hoteisarco.com.br/pt/index.php Complimentary Data: Job Positions Created: 23 direct e 177 indirect jobs 2. Hermes Pardini: The company has 56 branches in the cities of Belo Horizonte, Betim, Contagem, Santa Luzia, Sabará, Nova Lima, Sete Lagoas, Pedro Leopoldo and Vespasiano. Besides that, Hermes Pardini has stood out in the national market of laboratory support, being one of the top-three labs in the country in terms of revenues and volume of analysis. Among the services offered are: clinical analysis; image diagnosis; vaccines; functional tests; human and veterinary genetics. The administrative offices of the company are based in Vetor Norte. Data Investment: BRL 70 Million Status: Concluded Total Area: 103,000m² Constructed Area: 20,000m² Development: Hermes Pardini Site: www.hermespardini.com.br Complimentary Data Job Positions Created: 2,500 direct jobs Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 69 IV – Investor C.P.’s Opinion In this section, Investor Consulting Partners offers an analysis of Vetor Norte under the investment opportunities vision. To do so, two basic assumptions were adopted, without which no conclusion can be extracted from the data hereby presented. The first of them concerns the continuity of general Government of Minas Gerais’ policies, specially the PDDI, with the development and strengthening of the centralities and the intention of developing an Aerotropolis surrounding AITN. The second assumption is that, even though the Brazilian and global macroeconomic indicators influence significantly the regional economic performance, the microeconomics is more determinant for its performance than the global or national numbers. Even if the country passes through a period of vigorous growth, it is possible that some less competitive regions present performances in contrary of the national average (GDP reduction, increase of unemployment rate, deflation, etc.) and the inverse is also true. Examples of this phenomenon can easily be found in such a diverse and of continental proportions country as is Brazil, where, at any period of time, some states and municipalities prosper significantly, while others present a deterioration of their economic context. Such a situation can be found within municipalities of the same state or region as well. According to the assumptions and based on the data presented, interviews with businessmen and professionals related to the Government, it was developed an analysis of Vetor Norte as an investment opportunity. Some factors that can be possibly determinants in the identification of either positive or negative trends to the regional economy were cited in the analysis. The impacts of PDDI’s continuity go far beyond the income generation in the region through governmental works. The maintenance of the development policy for RMBH, as well as the implementation of construction developments and concrete measures to achieve the goals established, create a political stability scenario and enable the reduction of risks in the region, favoring new investments. The proposal of developing an IndustryAirport and subsequently, an Aerotropolis in the region, also favors the installation of aviation related companies or which benefits form the agility and convenience resultant of the airport physical proximity. Nevertheless, it is worth mentioning that neither Vetor Norte’s performance nor the first assumption here established are based in the success of implementation of an Aerotropolis surrounding AITN. The maintenance of this goal, and the Government’s compromise to its achievement through the investments implementation in the region, should be continued as sufficient to attract developments in related areas, providing the regional economic growth, the strengthening of North’s centralities and, eventually, the development of a metropolitan center based around its main airport, AITN. If the number of developments in the region is, in certain way, a good indicator of the private initiative confidence, the region presents a very favorable scenario for new investments. Investor has identified, along with AV Norte, 133 relevant developments spread through the seven cities of the region, including pre-operational businesses and projects in development. Among these, 54 are housing real estate developments, totalizing more than BRL 1.2 Billion, being the majority of them still in pre-operational stage. The other developments are distributed between the Industrial (45), Services (22), Commercial Real Estate (8) and Aviation (4) sectors. The attraction of new businesses to the area itself is a very important ally for regional growth and development of new centralities. The opportunity and income generation in Vetor Norte, favored by the real estate developments have created the ideal conditions for the launch of new real estate developments turned to local residents, attracted by the opportunity, the contact with nature and the ease of access. Some of the largest companies in the State have already launched or are making developments of this kind in the region, most of the time with great success of sales. The success tends to attract even more developments to the local, which, eventually, should balance the demand and supply for housing properties. If on one hand the available space for real estate developments is increasingly restricted, in the other hand there is still plenty of space for complementary services that certainly will be demanded by a high number of new residents. The demand for services related to health, like hospital, clinics, and laboratorial and diagnosis centers; or education, tend to grow in the following years. Few developments were identified in these sectors, and some Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected] 70 of them are still in stage of conception. With the release of so many housing real estate developments in the next two years, great opportunities of investment are expected in this area. In the industrial sector, shall it be in the manufacturing of high value added products, in the capital goods, consumer goods industries or in the segment of parts and services for the aviation sector; a more accelerated growth in the region depends more on the Industry-Airport implementation itself, with fiscal incentives to the establishment of these companies around AITN, than in others sectors. Still, 14 developments for these sectors were identified in the region, six of them that are still under implementation, totalizing more than BRL 1 Billion. This tendency will probably take other industries to the region, looking for synergy gains, within its value chain. In terms of macroeconomics, we did not take into consideration any big change in the global or Brazilian economic scenarios. If on one hand the structural issues of the Brazilian economy have weighted negatively in the country’s development, in the other hand there are not any evidence of any severe crisis or imminent risks, subject only to inflation, which must be closely monitored in the following years. In the international environment, the main issues of concern with greater potential impact in Brazil refer to primarily: (i) the insolvency of some countries from Euro Zone and the economic recovery of the block; (ii) the political standstills regarding the budget in United States; (iii) fears regarding the north-American’s economy recovery and (iv) Chinese economic growth. Generally speaking, we do not believe that none of these points will prejudice in any way the moderated growth scenario forecasted by IMF and some of the key market analysts. That said, unless something really catastrophic occurs, like a default of USA’s debt, a scenario which was not considered, we do not believe that the global economic scenario is capable of interrupting the growth tendencies of Vetor Norte for the next two or three years. Finally, bearing in mind that the development plans of Vetor Norte traced by the Government of State tend to go in the same direction and that the local economy presents differentiated features that points to a growth tendency in the next years, we believe that the region presents good opportunity of gains for businessmen and investors. Of 133 developments surveyed in the region, 69 are in the pre-operational stage, the majority of them being in stage of release or implementation. This means that even between companies that do not operate yet in the region, the vast majority of the developments surveyed are already generating demands, income and opportunities. The attraction of new developments tends to power the virtuous cycle of projects in the region generating opportunities from the most various areas. The chances of success in the Aerotropolis implementation are real taking into consideration the confirmation of the economic growth tendency in the region, sustained by the data hereby included. Seen in these terms, it is likely that Vetor Norte will be the region which offers the most varied and singular investments opportunities in Brazil. Investor believes that Vetor Norte will be consolidated, in the new 10 years, as one of the main metropolitan regions of investment attractions in the Country. Alameda da Serra, 119, 12º andar - CEP 34000-000 - Belo Horizonte - MG - Brasil +55 (31) 2127-2270 – www.investorcp.com Avenida da Marginal, 4159 - Maputo - Moçambique +258 (84) 951-9413 - www.investormz.com - [email protected]