BRAZIL - The sales of two significant real estate holdings do not signal a withdrawal from Brazil, according to Equity International (EI).

Instead, they can be seen as signs of the continuing maturation of the country's real estate scene and EI's involvement, according to the chief executive.

The company recently announced the sales of its ownership interest in Brazilian Finance & Real Estate (BFRE) to BTG Pactual, as well as the completion of the sale of its stake in BR Malls.

BFRE combines mortgage lending, investment management and real estate securitisation arms, and BR Malls is the country's largest retail property company.

Gary Garrabrant, chief executive at EI, said: "These sales represent the continuation of our business in Brazil.

"We have not lost our enthusiasm for Brazil. It is not an event or a signal but rather part of our natural evolution. We are applying our resources to the next vanguard."

On the retail front, Garrabrant confirmed that EI has continued interest in the sector, with a new focus on open-air retail centres, anchored by groceries or pharmacies.

"There is not a leader in that sector in Brazil," said Garrabrant, mentioning the US model pioneered by Kimco as an exemplar.

With EI's participation and the establishment of a new leadership team, beginning in 2006, BR Malls grew very quickly from six properties to 47 malls with more than 1.5m square meters of gross leasable area.

"Over time, we began to realise our work was winding up," said Garrabrant, who confirmed that EI's withdrawal was a gradual, planned process.

The commercial lending and securitisation businesses also still have potential, he said.

Brazil's tradition of segmented ownership in the office sector, where individual floors of an office building may be under different owners, remains a challenge to development, although Garrabrant noted that the new wave of office development was under holistic ownership.

The sale of BFRE to BTG Pactual was simply a response to a "compelling offer".

EI's current holdings in Brazil include GuardeAqui, a pioneer in the self-storage sector in the country, and Grupo Tha, a regional home builder.

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