Copacabana: Getting a Facelift

July 19, 2011 | Filed underReal Estate | Posted by Contributing Reporter

By Sarah de Sainte Croix, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Copacabana, perhaps the most famous of all of Rio’s beach-side neighborhoods, needs little introduction, but since its hey-day in the 1930s the glamor has been gradually giving way to a grittier reality, and the glitterati have moved on down the beach to Ipanema. However, the neighborhood is undergoing a quiet metamorphosis in anticipation of the Olympic Games in 2016 that is slowly putting the shine back.

The Copacabana Palace Hotel - the symbol of the neighborhood's illustrious past, photo by Yusuke Kawasaki/Flickr Creative Commons License.

One of the most significant changes the neighborhood has witnessed in recent years is the pacification of its surrounding favelas. In 2009 the favelas Babilônia and Chapéu Mangueira overlooking Copacabana’s eastern-most tip, and Pavão-Pavãozinho and Cantagalo at the south-western end were amongst the first favelas to be occupied by theUPP (Police Pacification Force) in the city’s Zona Sul (South Zone), significantly improving the safety and security in the area.

Copacabana resident Priscila Paiva commented, “I used to see a lot more crimes going on in the street, like people buying and selling drugs in broad daylight. I’m sure it’s still going on to some extent, but it seems a lot less obvious now.”

The second major change for Copacabana was the inauguration in February this year of “BRS Copacabana” (Bus Rapid System) – a new system of bus lanes on Copacabana’s main arterial roads, Avenida Nossa Senhora de Copacabana going north, and Ruas Barata Ribeiro and Raul Pompeia going south.

Paiva says, “The traffic in Copacabana was notorious. My commute to work has definitely improved. It can still be chaotic and the bus drivers still drive far too quickly, but it’s a step in the right direction.”

The beach is also receiving a major facelift courtesy of Orla Rio’s project to renovate Copacabana’s beach-side kiosks. The new kiosks are made from stainless steel and glass allowing a view through from all angles, and they feature subterranean kitchens and public bathrooms.

One of Copacabana's renovated beach-side kiosks, photo by Skellig2008/Flickr Creative Commons License.

But while all the signs point towards a shiny new future for Copacabana, David Eger from Rio Apartment Rental urges an honest caution to those thinking of investing in property in the neighborhood. “I’d wait to see what happens in the next year, due to the huge increases in real estate values experienced in the past couple years. The bubble might burst. Of course if you find a great deal, go for it, but, buyer beware here….no mortgage insurance.”

Indeed, rental prices have gone up by over 100 percent since The Rio Times’ last survey in April 2010. Then, a basic one-bedroom apartment started from around R$500 per month. Now the starting price is in the region of R$1,200 per month, not including condo fees and taxes.

Purchase prices have also demonstrated dramatic increases. One-bedroom apartments start at around R$200,000 for just 28 to 30 square meters, and a two-bedroom will set you back upwards of R$400,000 for 60 to 100 square meters – an increase of over R$100,000 on last year’s figures.

However, Eger goes on to say, “The population of Copacabana is aging…this may prevail as an opportunity for more affluent and worldly people to purchase, remodel and rebuild this world-famous, beautiful location.”

  shareshare

PAY ME NOW OR PAY ME LATER

Rio World Cup and Olympic Legacy: Economics

September 13, 2011 | Filed under2016 Olympics,Business | Posted by Helen Trouten

By Helen Trouten Torres, Contributing Reporter

RIO DE JANEIRO, BRAZIL – It may be no coincidence that recent mega-events have been awarded to countries with developing economies; the 2008 Beijing Olympics and 2010 World Cup in South Africa were both hosted by BRICS. The events are capable of generating unique enthusiasm in a worldwide audience and present lucrative financial opportunities and have become an imperative for nations trying to attract international investment.

The 2016 Olympic Games attracts major multinational sponsors like GE in August, photo by Rio 2016.

Recently, The Rio Times reported on the expected2014 World Cup and 2016 Olympics legacy for the city and country in terms of infastructure. In the second part of this series, we now turn our attention to the predicted legacy of the mega-events on the Brazilian economy.

Rio 2016 spokesman Bernardo Domingues explains, “The expected gross economic impact of the 2016 Games on the Brazilian economy is US$51.1 billion, according to a University of São Paulo study commissioned by the Ministry of Sport in 2009.”

Bruno Reis, Managing Director of Exclusive Analysis’s Brazil office, pegs the World Cup figure even higher, stating “The 2014 World Cup will involve R$142.39 billion of investments in Brazil, of this, direct investment between 2010-2014 will be R$29.6 billion.”

Reis breaks those numbers down to: “42 percent will come from the public sector and 58 percent from the private sector…As regards indirect investment, such as salaries that return to the economy, the estimate is R$112.7 billion.”

For Rio’s Olympic’s legacy on Brazil, Reis estimates direct investment at approximately R$30 billion between 2009-2016, with indirect investment estimated at R$90 billion.

There are high hopes in terms of employment rates. Sectors related to tourism, construction, electricity, IT, telecom, creative industries and financial services are the sectors that will see the most job creation, says Exclusive Analysis’s Brazil office. Around 120,000 jobs per year are expected to be created as a consequence of the Games until 2016, and then a further 130,000 jobs per year until 2027 according to research by the Ministry of Sport.

There is expected to be a massive boost to the tourism industry as well. According to Embratur, 1.4 million tourists visit Rio every year and this is expected to more than double, increasing to 3.3 million. For Brazil, the goal is to increase the number from 5 to 10 million visitors annually. The World Cup alone is expected to generate R$5.94 billion for the tourism sector according to Reis.

Mayor Eduardo Paes presents figures of Rio hotel chains, photo by Beth Santos/Rio City Hall.

“About 12,000 new rooms are predicted to 2015. 5,400 of them are already under construction. Rio de Janeiro has an extensive agenda of major events happening the next years, culminating with the Olympic Games in 2016,” said Mayor Eduardo Paes.

The Riotur President, Antonio Pedro Figueira de Mello, announced: “We will leave an unprecedented legacy. We are not only enlarging hotel capacity, but we are also attracting new investors to Rio, exciding IOC’s expectation and demands.”

Experts note the economic benefits gained by the organizing committee of the Games through improved practices of public administration, as was reported in Barcelona. While under the World Cup and Olympic spotlight, local and national governments are often forced to take political steps to showcase their strengths and conform to international political pressures.

President Dilma Rousseff already stepped in to put pressure on the World Cup preparations, holding public officials accountable for progress or lack thereof. In Rio, the above mentioned Maracanã Stadium is expected to be ready on time, but at a cost of nearly R$1 billion, approximately fifty percent more than originally estimated.

  shareshare

GOING, GOING ,GOING

Issue CXXX - Weekly Edition: September 7 - September 13, 2011
Dollar Climbs to R$1.70 Against the Real: Daily
September 13, 2011 | Filed underDaily Update | Posted by Contributing Reporter
By Brennan Stark, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The U.S. dollar rose 1.78 percent against the Brazilian real according to Monday’s closing figures. The rise effectively leaves the dollar worth just over R$1.70, its highest level since December 2010, but still well below its five year high of R$2.50 in December 2008.


The dollar climbs to highest value against the real since December 2010, image by Yahoo Finance.
Although the U.S. economy continues to struggle, economic crises in Greece and Italy have diverted some to pull funds and investments and direct them at the less risky U.S. market.

“Everyone is very afraid of a Greek default,” Andre de Carvalho Ferreira, director of Nova Futura DTVM Ltda., a brokerage firm in Sao Paulo said in an interview with Bloomberg. “You never know what’s going to happen. There’s no upside to hold the real. There’s more to go.”

The last eight consecutive reports have indicated that the dollar has strengthened and, according to Abucater dos Santos, manager of foreign exchange at brokerage company ICAP Brasil, the dollar’s trend could continue to rise until it reached R$1.80.

One possible reason, dos Santos suggests, was early September’s cut in the basic interest rate in Brazil from 12.5 to twelve percent per year.