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Made in Brazil

Positive news about Brazil's economy - and by extension Brazil property investment - just keeps coming. Heralded as "the locomotive out there pulling the train" by the OECD in June, this month Brazil is the most attractive emerging market in the A.T. Kearney 2009 Retail Apparel Index.

Beating Asiatic giant, China, Brazil tops the Index ahead of other huge clothing manufacturing countries such as India, Ukraine and Turkey. What is more, Brazil heads the field for the second year in a row. Reasons behind Brazil's success can be found in the large total clothing sales, its young population and high annual clothing sales per capita. The Index found that on average, every Brazilian spends US$490 on clothes a year. Furthermore, spending has grown at over 20% over the last five years, a rate A.T. Kearney describes as "staggering".

Around 60% of Brazil's 191.5 million population is under 40 and this huge percentage of young people is a major contributing factor behind high clothing sales. The country's recent economic boom has also lead to increased spending power among the population, another driving force behind Brazil's retail success. This young and affluent population is "extremely fashion conscious" and has a strong sense of celebrity culture.

According to A.T. Kearney, a world leading global management consulting firm, "in addition to the strong market indicators for apparel, Brazil is in a strong economic position compared to the rest of the region." The company believes that Brazil's pro-active economic stimulus package instigated by the government and lower inflation and interest rates are the engines behind high consumer spending.

Not only is Brazil top of the retail apparel index. The country also ranks in the world's top ten countries for retail development. A.T. Kearney's 2009 Global Retail Development Index (GRDI) looks at retail investment attractiveness in 30 emerging markets. Top of the 2009 Index was India with Brazil close behind.

Brazil's top rankings are excellent news and a direct result of strong foreign investment over the last few years. The global recession, whose effects have generally been low-key in Brazil, has made investment conditions even stronger.

According to the GRDI Index, Brazil is one of the "larger, resilient developing countries" and along with India and China, is "most likely to lead the economic recovery". A.T. Kearney found that prime real estate locations in development markets, including Brazil, are increasingly available and affordable. This combined with Brazil's young and mainly urban population has led to a growing interest in retail outlets. As a result, Brazil is now one of the world's top retail locations with huge potential for investment.

However, retail is not the only area offering excellent potential for investment - property investment in Brazil also makes strong investment sense. With Brazil's GDP set to continue to grow over the remainder of this year after a slight blip in the first quarter, Brazil is, as quoted by The Economist, "ready to roll again".

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