Loft to raise US$68 million investment vehicle to shop for properties in Brazil

Loft had previously launched an investment fund in December of 2019.
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ContxtoLoft wants to buy more real estate in Brazil but needs the money to do so. As a result, it’s been quietly amassing a real estate fund with investors. Now it’s made sufficient headway and is ready to share its progress with the world.

Last Saturday (25), Loft announced it’s raised R$300 million (~US$58.1 million) of its fund’s targeted R$360 million (~US$68 million) for buying properties in São Paulo and Rio de Janeiro.

The startup told Estadão that it pitched R$100 million (~US$19 million), while XP Investimentos and Itaú BBA procured the other R$200 million (~US$39 million). The remaining R$60 million should be closed within the next couple of months.

However, it’s not the first time the proptech launches a real estate investment vehicle. It had previously closed a fund for approximately US$52 million in December of 2019 through Credit Suisse Hedging-Griffo.

Why it’s a big deal: The startup’s recent maneuvers provide some interesting hints as to the future of real estate, not only in Brazil but within the entire industry.

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Loft investment and house-hunting in Brazil

The startup anticipates a shift in property seekers’ goals as a result of the coronavirus outbreak. 

Loft said it expects them to hunt for homes that are well-located within the metropolises in which it operates. Albeit people will want a bit of distance from the city and more outdoor spacing.

Plus, they’ll want more inexpensive pricing compared to living in the heart of São Paulo and Rio de Janeiro. 

In short, they’ll want that suburban setting, without ditching big cities entirely.

Rightly so, Covid-19 is also changing multiple aspects within real estate. 

For one, the rise of remote work will lead many property seekers to appreciate a home with a designated office space.

Likewise, people looking to rent may be reluctant to sign a long-term lease. Especially if their job allows them to work from anywhere full-time.

Furthermore, as everyone’s learned to social distance (even within a home or apartment) they’ll likely appreciate more open spaces.

The only problem with these trends is that many go against how most apartment complexes in urban centers are set up. 

Ergo, Loft’s recent bets on short-term rentals via its acquisition of Uotel and the near-wrap up of this real estate fund. 

Related articles: Tech and startups from Brazil!


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