The phrase “in the winning team, don’t move” is an example of an expression that appeared in a specific context – football, in this case – but which well illustrates the behavior of the experts consulted by Seu Dinheiro when it comes to defining the favorite real estate fund of the month.
Present among the favorites of the recommended portfolios of four brokers, Bresco Logística (BRCO11) he was elected for the third time in a row.
Observing the entire year 2022 so far, the experts highlighted on eight occasions the FII focused on the construction, lease, purchase and sale of logistics warehouses.
Those who have followed the recommendation since BRCO11 first appeared here in February have accumulated an appreciation of more than 12%.
Capitalizing on the general good moment for funds investing in real assets, BRCO11 is also thriving in light of the rise of big names in e-commerce. Its client portfolio includes names such as Magazine Luiza, Mercado Livre and Americanas.
But for those who don’t yet own shares of BRCO11 and fear they’ve lost their entry point, the good news is that there’s room for further appreciation: the fund is trading 8.6% below its book value — which is around Rs 119. according to the latest quarterly report.
The ratio is calculated by dividing the net worth by the total shares of the fund and shows the “ideal value” at which an asset should be traded. When there is a discount, as is the case with FIIs, investors have an opportunity to buy shares at a lower price than expected for the portfolio.
FII of the month: more logistics, bricks and paper
Demand from e-commerce giants such as Magazine Luiza supports analysts’ optimism with FIIs owning distribution centers.
Along with Bresco Logística, another real estate fund in the segment appears on the list of brokers’ favorites this month. With three clues, BTG Pactual Logística (BTLG11) reinforces the point that, supported by e-commerce growth, the sector is a good choice for an FII’s portfolio.
But since diversification is one of the golden rules for those who want to be successful in the investment world, experts bring an alternative that mixes brick and paper assets – such as the well-known fixed income securities linked to the real estate sector – into one FII : the RBR Alpha Multistrategy Real Estate (RBRF11).
Below, check out each broker’s favorites among those listed in their recommended portfolios for October:
Understanding the FII of the Month: Every month Seu Dinheiro consults the main brokers in the country to find out what their bets are for that period. Within the recommended portfolios, usually with up to 10 real estate funds, analysts list their three favorites. Considering the ranking list, we selected those who had at least two nominations.
Bresco Logística (BRCO11) — the gem of the segment
In general, real estate funds have been under pressure from the covid-19 pandemic and the tightening of Brazilian interest rates promoted to curb inflation. But social isolation has accelerated e-commerce – and those exposed to the sector’s dynamics have done well.
This is the case of Bresco Logística (BRCO11), whose tenant portfolio is about 57% related to online retail. This is, for example, the case of Magazin Luiz, one of the clients that rents warehouses belonging to the fund.
With 11 properties in its portfolio, the fund is also attracting attention for the quality of its properties, with Magazin Luiza, Mercado Livre and Americanas among its tenants. “Besco Logística has one of the best logistics portfolios in the industry,” says Guide Investimentos, one of the brokers that recommended FII this month.
The quality of properties that attract the attention of experts is maintained not only through the selection of new properties with “A+” technical specifications – that is, high constructive standards – but also through the maintenance of projects already in the portfolio.
This month, for example, is scheduled to deliver work to improve the Whirlpool São Paulo property. Currently in its third phase, the renovation includes improvements in several areas of the company for a total investment of R$17 million.
The location of the warehouses is another strong point: 59% of them are located in São Paulo, and 39% of the fund’s total income comes from the capital of the country, the largest metropolis in the country. The remaining assets are divided between Minas Gerais, Bahia, Parana, Rio Grande do Sul and Rio de Janeiro.
Additionally, the current zero physical vacancy rate is pleasing to analysts. And this situation should remain for some time, because lease agreements have an average remaining term of 4.8 years.
All these qualities that were overshadowed by the turbulent macroeconomic scenario were once again valued by the market in the previous month, with FII accumulating gains of 9.8% in the last two months.
BTG Pactual Logística (BTLG11) — a jump in the portfolio
Speaking of a quality portfolio, another real estate logistics fund recommended by three brokers in October is BTG Pactual Logística (BTLG11).
The fund — which was born in 2010 as TRX Realty Logística Renda Fundo de Investimento and was renamed and restructured in 2019 when it was transferred to the management of BTG Pactual Gestora de Recursos — also focuses on “A+” logistics ventures.
With prime construction properties in sight, he has built a portfolio with 15 properties and tenants from a wide variety of sectors.
And that number has grown recently: FII formalized the incorporation of V2 Properties (VVPR11), the owner of five warehouses in São Paulo and Bahia, late last month.
The operation increased the gross leasable area (GLA) of BTLG11 to 597.5 square meters without jeopardizing the financial vacancy rate, which remained at zero.
RBR Alpha Multiestratégia Real Estate (RBRF11) — portfolio balance
As we indicated at the beginning of the text, diversification is one of the main strategies to ensure that an investment portfolio is successful in any scenario.
Experts consulted this month by Seu Dinheiro chose an alternative that combines the two main classes of FIIs into one product, RBR Alpha Multiestratégia Real Estate (RBRF11).
To give you an idea, the RBRF11 portfolio consists of shares of 22 other FIIs — 15 of them brick-and-mortar — and 10 Real Estate Claims (CRIs), debt securities in the real estate market.
Diversification is also present in the distribution by segments, divided into five sectors. See below:
- Receivables from real estate: 39.8%
- Corporation: 27.9%
- Others: 15%
- Logistics warehouse: 10%
- Shopping: 7.3%
Santander, one of the houses that recommends the real estate fund, points out that balance in the portfolio can result in attractive dividends. “We estimate a dividend yield above 9.6% over the next 12 months,” the analysts calculated.
Consequences — the real estate fund recommended in September rose by more than 7%
IFIX, the index that brings together the main B3-traded real estate funds, remained on a recovery path, rising 0.4% in September.
Broker-recommended funds for the period also followed the trend in recent months, with brick-and-mortar FIIs outperforming paper funds.
Pátria Logística (PATL11) was a positive point, up 7.46%. Bresco Logística, champion of the month and partner of the PATL11 segment, returned a small part of the increase accumulated in August and retreated by 0.46%.
See below how all funds of the 3 best brokers performed: