Standard Life Investments Select Property Fund sold two buildings in prime areas of São Paulo, Brazil’s largest city, for a combined total of £60m, the fund said yesterday.
The buildings were purchased in 2010 for a combined £35m.
The sales are the latest sign of a cooling property market in Brazil, where home and office prices soared in the past decade from a mix of fast economic growth, cheap credit and rising wages.
Office prices in São Paulo are now comparable to those in the City of London, one of the world’s most expensive, according to research by real estate services company CBRE.
The sales also add to evidence of foreign investors’ more cautious stance about Latin America’s largest economy, which could grow less than 3 per cent for the third straight year in 2013.
Foreign direct investment will probably remain strong at $65bn, according to central bank estimates, but investments in stocks and bonds have been more modest.
“We expect the increasing supply of office space in São Paulo to lead to negative or at least muted rental growth in the medium term,” said Andrew Jackson, manager of Standard Life Investments Select Property Fund.
“This in no way means that we rule out further investment in Brazil in the future. We will continue to monitor opportunities.”