OREANDA-NEWS. February 15, 2011. BM&FBOVESPA and the Getulio Vargas Foundation (FGV) have launched the first profitability index for the Brazilian real estate sector. The General Index for the Real Estate Market – Commercial (IGMI-C) was developed by the Brazilian Institute of Economics (Ibre/FGV), with the sponsorship and support of 26 bodies representing companies in the financial and real estate sectors and pension funds.

The objective is for new index to become a profitability reference for commercial real estate – offices, hotels, shopping malls and others – contributing greater transparency to investors as regards price formation for buying, selling and rental.

Taking part in the event were Jose Antonio Gragnani, Chief Business Development Officer of BM&FBOVESPA; Jose de Souza Mendonca, president of the Brazilian Association of Pension Funds (Abrapp); Emilio Otranto, IGMI-C board chairman and Institutional Participation Relations Officer at BM&FBOVESPA; and Luiz Guilherme Schymura de Oliveira, director of Ibre/FGV. Ibre/FGV researcher Paulo Picchetti gave a technical lecture about the development of the index.

About IGMI-C – The new index is calculated from information supplied by a group of participants that involve institutional investors and companies linked to the real estate sector. These contributors include professional associations, consultancies, real estate portfolio managers, developers and others. The historical series in this release runs from 2000 to the end of 2010. In the final quarter of 2010, the sample was of 190 individual properties, including commercial offices, shopping malls, hotels, and industrial and logistics properties, among others.

The greatest concentrations are in commercial offices (around 50% of the total) and shopping malls (around 25% of the total). In regional terms, all of Brazil’s states are represented, but the largest concentrations are in Sao Paulo (around 37% of the total) and Rio de Janeiro (around 26% of the total).

The IGMI-C is open to new participants, meaning that there should be improvements to the quantity and quality of information over time. The IGMI-C is based on a continuous flow of monthly information from the participants and will be calculated and published every quarter. The next time that it is published, it will have information about the first quarter of 2011. BM&FBOVESPA’s support for the index is another initiative that seeks to benefit the development of both the real estate and the capital markets. Other examples of the Exchange’s vision in this field are the agreement it signed last year with the Sao Paulo State Registers of Deeds Association (ARISP) and the creation of the Real Estate Market Advisory Committee in 2009.