Which developers are growing affordable housing and preparing to enter the stock market

São Paulo – a new wave of developers specializing in the affordable housing market – particularly in My Home My Life (MCMV) – is preparing to go public. Emccamp, BRZ and Metrocasa have submitted requests for registration in category A Securities and Exchange Commission (CVM). If they get permission, they can issue any type of securities, including shares.

The movement is gearing up for a potential initial public offering (IPO) once the market conditions are right. A window of opportunity is expected to open next year as falling interest rates prompt investors to seek higher yielding options such as companies and stocks. MCMV developers will be at the forefront of the IPO race, according to investment banks.

O real estate market residential and commercial already represents one of the largest segments If so, with 28 companies listed. Five are focused on the housing program: Cury, Directional, Plano & Plano, MRV and Tenda. Of these, three raised funds through follow-on stock offerings (subsequent) in the middle of the year.

Given the strong demand from investors, banks believe there is an appetite for this type of paper, encouraging new names to try to go public. U Directed by you MRVthe demand for shares exceeded the supply by five times.

Changes to MCMV have improved the market for developers photo: Ricardo Stuckert/PR / DIV

For prospective stock exchange entrants, the goal is to raise resources to drive business growth. Appetite increased after the government c President Luiz Inácio Lula da Silva to increase MCMV through increased subsidies, lower interest rates, increased price cap and longer payment terms, among other measures that increased the purchasing power of real estate.

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“In the economic segment, the ball is behind the developers. All are growing with record sales, improved margins and bottom lines. And so do we,” BRZ vice-president Marcos Dutra said in an interview. Estadão/Broadcast.

BRZ was founded in 2010 in Belo Horizonte and is controlled by sisters Mariana and Eduardo Tolentino. The latter is also the executive president. The developer is growing in the inland cities of Minas Gerais, São Paulo and Rio de Janeiro.

From January to September of this year, BRZ sold 3,500 apartments for R$771 million. Launches amounted to 4.2 thousand units worth 1.1 billion reais. In 2024, the goal is to increase output and sales to approximately 1.5 billion reais with revenue of around 1.3 billion reais.

The BRZ already tried to go public in 2020, but had to back off after the pandemic hit. Now it wants to access the stock exchange to raise resources and expand the startups. “The IPO will be held for growth, not for debt repayment or payments to current partners,” the vice-president emphasizes.

Emccamp has also started working on completing an initial public offering in the near future after two failed attempts in 2013 and 2020. The developer was founded in 1997 in Belo Horizonte and operates in the capitals and metropolitan regions of the state of Minas Gerais. Sao Paulo and Rio. The company is managed by brothers Regis and Eduardo Campos, who pass the baton on to their children. The future IPO will be a way to perpetuate the company, guarantee the professionalism of the management and strengthen the money for growth.

“We have attended banking events and spoken to over 60 funds in ‘no-deal roadshows’ (endless meetings to close investments). Everyone appreciates the company and the segment,” says André Avellard, Emccamp’s CFO and Investor Relations. “We are confident that there is room for new companies of this type on the stock exchange. There are few of them in this popular segment, and there is a prospect of growth in operations to eliminate the housing shortage.”

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According to his assessment, the improvement of MCMV conditions has increased the positive view of the sector. “Many families had access to the program. This increases the speed of sales, creates more liquidity and more money,” says Avelar. This year, Emccamp achieved R$ 734 million in launches and R$ 893 million in net sales. For the two-year period of 2024 and 2025, it is projected to generate about 1.5 billion reais annually in the form of launches, sales and net income.

Another potential IPO candidate is Metrocasa, a São Paulo-based developer owned by partners Andre Arago (formerly of Tenda), Claudio Lima (formerly of Re/Max and WTorre) and Marcus Custodio (formerly of Cyrela and Toledo Ferrari). . The company focuses on two-bedroom apartments in areas of São Paulo close to the metro. When contacted, the company preferred not to be interviewed. His work numbers are not public.

Pakaembu and Patrimar are also being touted by investment banks as potential IPO candidates. Pacaembu specializes in building affordable homes in the interior. Patrimar operates in the mid- and high-end sectors, in addition to owning MCMV-focused Novolar.

Both have already tried to go public, but they didn’t take off either. When interest rates fell to 2%, many construction companies attempted IPOs, hoping to boost sales through easier financing. The most ambitious plan was the construction company Kallas, which at the beginning of 2020 intended to raise 2 billion reais, but, like its competitors, refused.

CVM data shows that between 2020 and 2021, almost 20 construction companies or developers abandoned their IPOs due to the rapid deterioration of the market situation with the onset of the pandemic. In Faria Lima, bankers are betting that some of these names have already become more prepared and should renew their plans.

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