RIO DE JANEIRO-Houston-based Hines has been hired to serve as real estate consultant for the massive 2-square-mile Porto Maravilha docklands redevelopment here. The city is getting ready to host a number of global events, including the 2014 FIFA World Cup and the 2016 Olympic Games, and wants to rebuild its vacant dock front with new public and commercial buildings, and better infrastructure.
The Urban Development of the Port Area Co. is leading the redevelopment in a public-private partnership. Caixa, Brazil’s largest savings and loan bank, is a consultant to the Porto Maravilha real estate investment trust, an investment fund set up to finance the work.
Caixa is the firm that has hired Hines to evaluate all proposed new developments in the area. Hines will also act as co-investor in private sector developments, including office towers, hotels, retail and residential projects, which will be funded through sales of building rights. The sale of these rights, which, for example, could include office or apartment development on top of an existing building, will go through the REIT to be used for urban renovation of the area. Buyers and owners also receive a tax reduction for new investment. The trust has a current investment of $2 billion.
The docklands area, about five million square meters along the water, has about 20% vacancy in its warehouses, and scores of historical properties. The section also has the infamous history of being the largest port for the former slave trade to the United States.
Phase 1, the public and infrastructure part of the redevelopment, is already underway. This phase includes 435 miles of infrastructure lines, 2.5 miles of tunnels, 43 miles of new roads, 15,000 trees and three new sanitation plants. Other projects include the Museum of Tomorrow, a project designed by Santiago Calatrava; and hotels, convention centers and living villages for the Olympic athletes.
Douglas Munro, president of Hines Brazil, said in a statement that the entire development is expected to last about 15 years. “It is our privilege to assist in revitalizing a wonderful area of Rio for the benefit of REIT shareholders and, in fact, the entire city and country,” he said.
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