At the South American Shared Ownership Investment Conference (SASOIC) 2010 held in Rio de Janeiro, Brazil from May 31 through June 1, Luxury Leisure Properties International (LLPI) presented a market analysis, sponsored by RCI Latin America, on the shared-ownership industry in Brazil.

LLPI Founder and President Luca Franco speaks at the South American Shared Ownership Investment Conference (SASOIC) 2010 in Rio de Janeiro, Brazil

And according to LLPI Founder and President Luca Franco, the outlook is very good. “The bottom line,” says Franco, “is that there’s an excellent opportunity for growth. The market depth is almost endless, and the fractional industry is in a very early stage.” Franco compares the Brazilian shared-ownership market with that of the United States to illustrate his point: “After 40 years in the U.S., shared ownership has an 18% market penetration rate of the income-eligible market. If you exclude the Orlando and Las Vegas destinations, it is around 13%,” he says.

“In Brazil, the existing market-penetration rate is 0.02%, and shared ownership has been there for only 16 years. If you project the penetration for Brazil for the next 24 years, the numbers are huge. It would be approximately 4.3 million households.”

Franco says the Brazil fractional market is currently very small. “At the moment, fractional has only four built homes with a total of 80 sales in the whole of Brazil,” he says. “That means it’s a newborn baby.” Consequently, says Franco, “there’s a lot of interest from many developers.” The market is doing well and is poised to do even better because the country is doing so well, Franco says, citing reasons including political stability, an expanding middle class, a strong domestic market, considerable public investment in infrastructure and many foreign investors. What’s more, Brazil has the 10th largest economy and fifth-largest country population in the world, with 190 million.

Franco says the country essentially missed being hit by the global credit crisis “because they didn’t have any financing.”

Focus Groups
For the purpose of this report, four focus groups were conducted in March 2010 to explore consumers’ understanding and perceptions of the vacation ownership industry in Brazil and their potential interest in variations on the existing product. Participants were upper‐class married homeowners, age 35‐65. Two groups took place in Rio de Janeiro and two in São Paulo. Half of the groups consisted of existing vacation ownership members and the other half included prospective consumers who could afford but did not currently have vacation ownership, but were interested in acquiring real estate.

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Tags: Brazil, Fractional, LLPI, Luca Franco, Luxury Leisure Properties International, RCI Latin America, Rio de Janeiro, SASOIC, shared ownership, South American Shared Ownership Investment Conference, Timeshare