Canada’s Brookfield to exit Brazilian shopping mall sector, sources say

Canada’s Brookfield Asset Management Ltd. BAM-T is exiting the shopping-mall sector in Brazil to concentrate its local real estate holdings in offices, apartment buildings and logistics, three people familiar with the matter told Reuters.

Earlier this year, Brookfield sold its controlling stake in Rio de Janeiro’s Shopping Rio Sul and is now seeking buyers for its majority stakes in two Sao Paulo malls, Patio Paulista and Patio Higienopolis.

Brookfield aims to raise around three billion reais ($721-million) from the sales, said one of the sources, who requested anonymity to discuss negotiations. The goal is to complete both – together or separately – by early 2025, a second source said.

Brookfield has hired investment banks Bradesco BBI and BTG Pactual to conduct the sales. The planned sales were first reported by business-news website Brazil Journal.

Brookfield and Bradesco BBI declined to comment. BTG Pactual did not reply to a request for comment.

Brookfield, with approximately US$1-trillion in assets in more than 30 countries, has its origins in a utility company founded in 1899 in Sao Paulo.

The asset-management firm is still present in several Brazilian sectors, including renewable power, infrastructure, private equity and real estate, with close to 200 billion reais under management locally.

Brookfield’s largest real estate holdings in Brazil are in corporate offices, but it has invested recently in logistics parks, supported by booming e-commerce, and apartment rentals, which have expanded amid high financing costs for home purchases, according to a company prospectus.

The firm has invested since the 1980s in Brazilian malls, which have rebounded quickly from pandemic-era restrictions.

While online retail has battered the mall sector in some countries, Brazilian malls continue to attract shoppers as a safe, family-friendly destination in a country with long-standing public-security issues, said Tadeu Masano, a retail consultant and former professor at Fundacao Getulio Vargas.

Brookfield decided to sell its Rio de Janeiro and Sao Paulo malls because it considers that both investments are now mature, according to the first two sources.