We received our ‘Autorização para uso alternativo do solo’ licence from the environmental agency, Sudema this week which allowed our contractor to commence the first phase of the works at Palma do Mar.

Phase one involves the removal of all of the vegetation on the site, some leveling works and the initial dragging of the roads, which bisect the quadrants.  As part of the work I had to walk the development site with the contractor identifying trees and bushes that we wished to retain on the site.

There are many coconut palms, which we have saved meaning some lucky Green Land Securities clients will have their own palm tree, which would normally take 10-20 years to grow or cost thousands to buy!  There are also many Mangaba fruit bushes, which are not for eating but make a very popular fruit juice and also lots of Cashew trees, which produce Brazil’s most popular nut.

We will receive our ‘Licença Prévia’ and Licença de Instalação next Friday which will mean the commencement of Phase two and the installation of the roads, drainage and kerbing. 

I will be sending photo’s every few days showing the progress of the works which will be shown on the Infrastructure Update pages of the website.

The infrastructure work at Palma do Mar is starting on Monday 1st March with the first phase of the works involving the clearance of the vegetation from the site and leveling of some of the quadrants.  The environmental laws in Brazil are very strict and the powers granted to the environmental agencies are growing year on year.

Even though Palma do Mar received its planning permission many years ago I still met with a Sudema technician this week to walk over the land and confirm that there were no protected plants on the site. We will collect our licence on Friday and the bulldozers will be on-site Monday morning.

All of our infrastructure drawing projects are completed and have been presented to the relevant statutory bodies for approval.  These projects will be available to view on the web site soon.

The next phase of work will be the opening of the roads between each quadrant, which isolate each quadrant and start to shape the project.  Further phases will include drainage provision, water supply and electricity distribution.

It’s been carnival time here in Brazil with huge celebrations throughout the country.  João Pessoa has a very different way of celebrating carnival as it has a pre-carnival week, with a different theme most nights.

There is a party every night with hundreds of thousands of people in attendance, with the best nights being:

The night of the Tambau Virgins when all the men dress up as women to party through the night, very strange!

Muriçoquinhas, which is children’s carnival with everyone in fancy dress and lots of throwing of water bombs, spraying of shaving foam and general mayhem.

The biggest night of the week is Muriçocas where a massive party starts in the centre of the city and dances its way to the beach, a night not for the faint hearted!At all of the events were huge floats, dancers and massive lorries just carrying speakers.

With pre-carnival out of the way the city takes a break with most of the carnival parties moving outside of the city to Lucena in the North and Jacuma in the South.  The traffic queues to get into Jacuma were over 3km’s from Saturday to Wednesday with over 50,000 people entering the village daily, this coupled with every house, apartment and hotel already being full meant that Jacuma and the surrounding villages were one big party, night and day!

Keeping abreast of housing development and the construction industry is an essential part of my job here in João Pessoa.  A change to these market segments has an affect on our clients investments and on Green Land Securities´ developments with regard to value and cost.

There is currently a huge housing boom in Brazil due to the launch of the “Minha Casa, Minha Vida” programme, a government-backed project to bring affordable housing to the burgeoning Brazilian middle classes. Minha Casa, Minha Vida will pour an impressive R$60bn into Brazil’s housing market, and with the construction industry accounting for 5 per cent of Brazil’s GDP this will give a valuable boost to employment and earnings.

In Paraíba 21,306 new homes are already planned for families earning between zero and 10 times the minimum wage and with Paraíba’s housing discrepancy standing at 122,166 units there are many more developments planned. 

This scheme is creating a whole new generation of home owners and which is helping the property market to gain year on year.  This has been coupled with a relaxation in the domestic mortgage market which has seen a huge increase in lending over the last 4 years.

Residential mortgages only account for 2.5% of Brazil’s GDP  the property market has huge room for expansion. To give an example, residential mortgage levels in other countries are 11% in Mexico, 20% in Chile, 45% in Spain and as much as 68% in the US. Despite the current worldwide financial crisis, mortgage lending in Brazil has risen by 41% in the last year, twice as fast as consumer credit.

These factors tied in with the many other positive growth factors reported over the last year in Brazil lead me to believe that there is at least another 4-5 years of positive property growth here in north-east Brazil.

After many years of negotiation the Federal Government, Ministério Público Federal (MPF) has granted the state of Paraíba permission for the construction of a conference centre in the state capital of João Pessoa.  The centre will be constructed close to Cabo Branco, João Pessoa's number one residential district. The building has a budget of $50 million, already in place and works have started.

The land upon which the convention centre is to be constructed is part of a large master-planned area with proposals for at least six large resort hotel schemes. 
This is big news for João Pessoa as the building will be a landmark in tourism history in state.   With this convention centre João Pessoa will be able to compete more effectively against the other tourist destinations both in Brazil and internationally, which contribute to a massive increase in real estate prices in the region.   The city is in talks with a variety of companies regarding hotel and resort developments in and around the convention centre.  

The convention centre is another major factor that is helping to sustain the rapid property growth in João Pessoa and the surrounding areas and the proposed hotels and resorts will only increase the investment potential of surrounding locations like Jacuma.

The holiday period here in Brazil is pretty intense with live concerts on the beach running constantly from 20th December to just after New Year.  The concerts range from the North-East traditional music of Forro (pronounced “for-hor”), samba, classical, dance and many others.

The temporary concert stage will now stay erected until the end of February with concerts every weekend leading up to the big party here in Brazil, Carnival!  The big carnival events are found in Rio, Salvador and Recife, but many of the smaller towns such as Jacuma and Lucena will be holding huge carnivals with hundreds of thousands of people in attendance.

The next two months, January and February, are the real holiday periods here in Brazil – the direct equivalent of July and August in the UK, but with guaranteed sunshine.

With João Pessoa being a beach city this means that there is a massive influx of tourists and unless you have booked a hotel room months ago, you won’t find anywhere to stay in João Pessoa or its surrounding towns!

With the infrastructure works starting at Palma do Mar in January I have been finalising the project agreements with the relevant statutory bodies.  Green Land Securities, as the developer of the site will provide electricity, water and drainage to each villa plot.

Each of these items requires a meeting to confirm that our plans are in accordance with the local planning requirements and statutory regulations.  For water I have had to meet with the Paraíba state water authority Cagepa and for electricity meet with Energisa.  Both have strict guidelines which our project drawings have to adhere to.

Drainage is an important issue for the site, as being this close to the equator, there is a three month rainy season when it rains every morning for an hour before the sun comes out again.  Our drainage system at Palma has to be approved by the local Town Hall to ensure it links in with adjacent developments and the new by-pass road which will be constructed next to our site.

Brazil is as heavily regulated with regard to planning permission and utility provisions as the UK .  While this means that I have to obtain many permissions and agreements before we start construction work, it also ensures that purchasers end up with a quality development.

This week I have been visiting some of the completed and new condominiums around João Pessoa to look at the infrastructure and leisure facilities that are being provided by other developers.  There has been a real move in the property market towards condominium living for both first and second homes over the last few years, as buyers are looking for developments which will provide the lifestyle that they require.

For Brazilians this lifestyle choice is all about communal leisure facilities for the adults and the children.   The facilities are maintained by way of a condominium charge so the community of owners pays the bills for the maintenance, upkeep and running costs of the building or development.  The exact “list” of items that are covered by this charge is determined by the people who make up the condominium ie. the owners. Usually the charge includes; power and light to communal areas such as reception, lifts etc, swimming pool maintenance, security / porterage, cleaning of communal areas, buildings insurance, accountancy charges, some or all local and federal property taxes and building maintenance.

The older condominium developments, which are completed and built have very few on site facilities. For example one of the earliest condo developments in João Pessoa is Cabo Branco Privee located between João Pessoa and Jacuma.   This development was sold as individual villa plots which have now been developed into houses.  The development has a small gym, on-site shop, volleyball court and a single tennis court.

In comparison a new development such as the Orchid Grove Condominium has many more facilities such as multiple tennis courts, social club, sports club with sauna, shower, outdoor swimming pool, Jacuzzi, indoor swimming pool and gym.

This is why we have incorporated so many facilities such as tennis, squash, basketball, restaurants, volleyball, children’s playgrounds  and the country club into Palma do Mar and Resort do Mar, because this is what the Brazilian market is demanding.

Many of the clients that have purchased at Palma do Mar are now considering having a villa constructed now that the infrastructure works are starting in the New Year. In the nearly two years since the development was launched to the market, there have been many changes in Brazil and the rest of the world.

Our standard villa package is now being re-vamped so I have been meeting architects, engineers and builders to look at the current trends in house design, construction and finish.

The typical house being constructed by middle class Brazilian’s for holiday/weekend home residence averages between 120 sqm – 170 sqm with three to five bedrooms and a pool.  Gardens in the main are terraced with ceramic tiles to keep maintenance costs low.

I am currently working to get build costs confirmed,  the costs of the villas will vary depending on the number of floors, pool, landscaping requirements and the quality of finish.  Watch this space for more information!

The talk this week in the City has been about the first direct flights from Europe to João Pessoa becoming a reality for visitors.  From April 2010, Fly Brasil, a Dutch company will be responsible for weekly flights from Amsterdam.

With the travel company, Tui, having inspected the airport last year, its only a matter of time before more airlines are flying direct to the João Pessoa. 

Also due to João Pessoa’s increasing popularity as a holiday destination for Brazilians, from the 1st of December the airline Gol Linhas Aéreas will be providing one extra flight a week from from Aeroporto Galeão in Rio de Janeiro to Aeroporto Castro Pinto, in Joao Pessoa. The new flight was put in to service due to increased demand particularly from the south-east of the country.

It has also been announced that another airline is preparing to provide more flights to João Pessoa from the beginning of January 2010.

All of this is good news for the property market, which has continued to experience an average growth rate of 20% per annum, even through the current worldwide economic crisis.

The summer Season has kicked off with a Bang in João Pessoa. The first of many beach concerts is opening on Saturday. The concerts are held in Cabo Branco and will continue for the next five months especially over the Christmas, New Year and the Carnival period, Brazilians love to party!
 
I am now glad we have moved from Cabo Branco, as the music from these concerts used to shake the house and keep us awake all night. Now we will be able to choose what we listen to and when!
 
This concert is part of the Rota do Sol motorcycle festival which takes place in Cabo Branco every year. It is a huge motorbike party with thousands of bikes from all over Brazil. I stayed in a hotel next door to this festival last year when I was over here planning our move. The noise was amazing, but the festival was good fun with live music and film shows (official and unofficial) and plenty of stalls to buy bike gear and bikes. There were parades of bikes and a bike run out not to be missed!
 
If you have never been to a motorcycle festival then this is definitely one to see. A great spectacular with a good feeling about it!