Standard Life makes first property acquisition in Brazil

Standard Life Investments, one of the largest property investors in Europe, announced that it has made its first direct investment in the Brazilian real estate market with the acquisition of a multi-let office property in Sao Paulo for c.R$15m.

Acquired from Brazilian Capital on behalf of Standard Life Investments' Select Property Fund, the Alana II Building is located in the Berrini sub-market, one of Sao Paulo's most established office locations. Purchased with an initial yield of c.12%, the building comprises 13 floors and 7,500sq.m of constructed area. The building is currently 88.5% occupied with a further 7.5% of floor space under negotiations. The building has tenants from a range of industries including oil, shipping and bioscience.

Standard Life Investments and its Brazilian partner, Eccelera, plan a major refurbishment of the Alana II Building during 2010. The property will have its profile upgraded, including a modernisation of the façade.

The first of its kind in the marketplace, the Select Property Fund offers both institutional and retail investors in the UK access to global property markets. The £600m fund accesses commercial property markets via direct investment, unquoted specialist property products and stock exchange listed property vehicles globally.

Andrew Jackson, Manager of the Select Property Fund, Standard Life Investments, said: "Direct investment in the Brazilian property market offers some exciting opportunities for discerning investors at the moment. The health of the Brazilian economy, strong demographic profile and major oilfield discoveries off its coast bode well for future growth in the Sao Paulo and Rio de Janeiro commercial property markets. It's therefore great news for the Select Property Fund's investors that we've added the Alana II Building in Sao Paulo to our international portfolio of real estate investments.

"This acquisition fits in well with the fund's strategy of seeking opportunities to add value through refurbishment and operational expertise. In line with this approach, we hope in due course to announce further acquisitions within the Brazilian property market."