BTLG11 fell more than 4% in April after suffering from the Fed and ‘Campos Neto effect’; Is low a buying opportunity?

After ending the last five months on a positive note, the Ifixan index that brings together the main real estate funds from B3, fell -0.77% in April. Among the drops, the drop of -4.3% in BTG Pactual Logística (BTLG11)one of the biggest names in the industry, caught attention.

But before getting into whether the drop is a buying opportunity or not, it is important to understand what led Ifix to end in the red for the first time since October 2023.

According to analyst Caio Araujo, from Empiricus Research, the reasons are the same as those that affect risk assets as a whole: the possible delay in the process of falling interest rates in the United States and the worsening of the Brazilian fiscal situation.

The call “higher for longer” us USA – higher interest rates for longer than expected – also affects the trajectory of Selic cuts in Brazil.

The president of the Central Bank, Roberto Campos Neto, even stated that external dynamics could reduce the pace of decline in the Brazilian basic interest rate. The BC’s next decision takes place on Wednesday (8).

In real estate funds, products linked to a sector with a great need for capital and famous for paying monthly dividends exempt from Income Tax, the effect can be even more negative due to the strong correlation with interest.

“When we look at local interest rates, estimates for the Selic Rate at the end of the year are already close to 9.5% per year, and the long end of NTN-Bs surpassed the remarkable real level of 6% per year, historically challenging for risky assets.”

In this context, brick real estate funds, those that invest directly in real estate, suffered more in April, as shown in the graph below.

As BTLG11 is a fund that invests directly in logistics warehouses, a drop in the last month would be natural. However, the drop of more than 4% was “exaggerated”, in Araujo’s view.

“It is a fund that must pay a yield interesting at around 9%there will be an asset revaluation soon and we foresee an appreciation. So, in our view, this drop is a little exaggerated.”

In this regard, the analyst sees the decline as an investment opportunity in the real estate fundwhich has a portfolio of 23 properties distributed across six states.

“The fund has around 87% of the gross leasable area located in São Paulo, the main region for the country’s logistics segment, and has several quality assets classified as A+”, says Araujo.

According to the analyst, in addition to the estimated earnings of 9.4% for the next 12 months, the recent drop also gives the FII the possibility of capital gains with the appreciation of shares.

Despite short-term setbacks, Caio Araujo still sees a favorable scenario for the real estate fund industry in 2024.

“I remember that last year we witnessed stress of a similar magnitude in the first half of the year, followed by a sharp rise in the index.”

Analyst opens recommendations for the portfolio that has already yielded 157% of Ifix

The analyst sees five great opportunities to buy nowafter recent falls.

BTLG11, as mentioned, is one of them. It is even one of Caio’s recommendations in his portfolio of real estate funds from Empiricus Research, called Renda Imobiliária.

Since its creation, on January 1, 2017, until May 1 of this year, this portfolio had 129% appreciation. I.e, more than doubled the money of those who followed Caio’s instructions to the letter.

On the other hand, those who invested in Ifix (the stock exchange’s main real estate fund index) in the same period, it had only 81% profit.

Now, you can discover the five biggest opportunities for the “Real Estate Income” portfolio at the moment without paying anything.

This is because a report with the 5 best real estate funds to buy now was released as a courtesy to you.

Free access: find out which are the 5 best real estate funds to buy now

Every month, Caio releases a report recommending the real estate funds with the greatest potential on the stock market, in his opinion. And the report with May’s indications is now available to anyone interested.

This is because Empiricus Research, a company in the BTG Pactual group, provided access to this report as a courtesy. In other words, you do not need to pay anything or commit in any way to the analysis house in order to know all the indications.

To grant your access, simply click the button below and sign up to receive the report in your email. Rest assured, It’s all free.

Therefore, I suggest that you open your access and at least take a “look” at the recommended FIIs. Then you decide whether these indications make sense for your assets: