The luxury mega-complex Cidade Matarazzo, built around Avenida Paulista, has just completed a credit operation worth R$343 million. The money will go towards completing the final phase of the construction: a hub with designer stores and restaurants, a cultural centre, an organic products fair and a boulevard open to the public. All this with an opening scheduled for July next year. So far, the complex has already opened the doors of the six-star Rosewood hotel. In all, investments in the project will total R$ 3 billion, of which R$ 800 million correspond to the land. This lavish area housed historic buildings abandoned for decades in the heart of the city.
The credit operation was closed by the owners of the mega-complex – BM Varejo, controlled by Groupe Allard and whose minority partners are Autonomy Investimentos and Gafisa Properties – and Vectis Gestão. It is a transaction for “people to understand that the financial market is not just for generating income, but can also leverage transformational projects for cities”, says Vectis partner Mucio Mattos.
The transaction consists of issuing a certificate of real estate receivables (CRI) which had the peculiarity of bringing together a combination of guarantees. This is where the resources provided for leasing stores come in; for example, Farfetch (retailer of fashion items from brands such as Prada, Burberry and Versace) and the wealthy club Soho House will operate. The operation also covers receivables from brand exposure contracts as collateral. Bradesco is already confirmed as the name of the cultural centre. Although Cidade Matarazzo is known as a corner of luxury, it is expected to attract more than 30,000 people a day, with attractions open to the general public.
On the financial side, CRI provides the release of R$ 343 million in tranches according to the progress of the works. The first one is out now, worth R$ 80 million. The CRI matures in 2040 and pays IPCA + 9% per year, a not-so-mild value that signals the risk of executing the project in an area with listed buildings, not to mention the extended payment term. The certificate has a single buyer, the real estate investment fund Vectis Juros Real Fundo (ticker VCJR11).