NEW YORK, Oct 4 (Reuters) - MRV Engenharia e Participacoes SA, Brazil’s No. 1 low-income housing builder, plans to boost spending on land for future property developments next year in a bid to increase its holdings before property prices rise, its chief executive said on Wednesday.
MRV, which spent 1 billion reais ($319.10 million) on land parcels from 2014 through the first half of 2017, will spend 500 million reais in 2018 to boost holdings, part of an aggressive push to take advantage of prices while they remain low, CEO Rafael Menin told Reuters in an interview.
“We think that at a certain point in the medium term this opportunity will close or at least narrow,” he said. “So we think that being aggressive until the end of next year will allow us to reap many dividends and benefits for the next six to seven years.”
The company’s expansion binge, which took advantage of fading competition from other developers that had pushed into the low-income market during Brazil’s boom years as well as depressed prices for land, has helped bolster the estimated value of those holdings - once developed with an estimated 284,000 apartments - to 43 billion reais.
MRV, which has projects in 148 Brazilian cities, is trying to take advantage of its 2.6 billion real cash trove to boost its share of the Brazilian low-income housing market to 15 percent from 10 percent.
After a painful two-year recession, MRV also hopes to take advantage of moves by the government to raise some income limits on its subsidized mortgage program and create a new income range slightly above the heavily subsidized lower end of the low-income market.
The latter move “puts a much bigger number of families in play” for the company, Menin said.
$1 = 3.1338 reais Reporting by Christian Plumb; Editing by Leslie Adler