The aging of the Brazilian real estate stock is creating a new front of expansion for the financial market: credit aimed exclusively at condominiums. Pressured by mandatory maintenance works, technological modernization, regulatory adjustments and investments in sustainability, property managers and administrators began to look for alternatives to finance projects that previously depended exclusively on extra shares from residents.
The trend follows a broader movement in the real estate market, marked by the search for solutions that increase operational efficiency and increase the value of properties.
“The Brazilian condominium has become more complex. The buildings have aged, regulatory requirements have increased and construction costs have grown a lot. In many cases, the alternative ends up being a very high extra quota, which puts pressure on default and makes it difficult to approve projects”, says Ricardo Chalfin, founder of Wind Capital,
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The company specialized in credit for this segment already grants financing through Bank Credit Certificates (CCB), allowing condominiums to transform large extraordinary expenses into long-term installments, in some cases of up to 84 months. The objective is to avoid high immediate disbursements and make investments that often end up postponed due to lack of resources viable.
According to Chalfin, financing starts at approximately R$100,000, but the most frequent projects involve significantly higher amounts. In structural works, retrofit and building modernization, operations can exceed R$1 million. The company has already served more than 1,200 condominiums and financed around 780 works across the country.
In the first five months of this year alone, the company originated around R$30 million in credit. Since the start of operation, the accumulated volume has reached approximately R$50 million, whether for financing for structural renovations, waterproofing, electrical modernization, changing elevators, implementing solar energy and digitalizing services.
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Investments for modernization
The need for investments is not restricted to older condominiums. According to Chalfin, the market serves residential and commercial projects of different sizes, including new buildings that need to adapt their infrastructure to new technological and environmental demands.
Among the fastest growing projects are solar energy installations, energy efficiency systems and adaptations for charging electric vehicles. “The adaptation to receive electric vehicles is already a reality in many condominiums. This requires investments not only in chargers, but mainly in the electrical infrastructure necessary to guarantee safety for residents”, he explains.
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Cost cutting
Another segment that has demanded credit is the replacement of physical entrances with remote and digital systems. In many buildings, especially in large urban centers, labor costs represent a significant portion of monthly expenses. Migration to digital models usually requires significant initial investments and, in many cases, the payment of high severance pay.
There are operations in which labor costs exceeded R$600,000 just to make the change in the operational model viable. According to the company, financing has also been used to cover labor liabilities, collective layoffs and administrative restructuring.
Planning
With so many demands, credit for condominiums began to be seen not only as an emergency alternative, but as a financial planning instrument.. Instead of accumulating resources for years, while inflation makes materials and labor more expensive, many condominiums choose to carry out the work immediately and spread the costs over time. This logic has been adopted in solar energy projects, elevator replacements and structural restoration of buildings.
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But the expert claims that contracting normally requires financial analysis of the condominium, approval at a meeting and presentation of the project’s accounting and legal documentation. Even so, he believes that demand should continue to advance in the coming years.
Underexplored market
Brazil today has millions of condominium units built decades ago, many of them requiring investments in maintenance, security, accessibility and energy efficiency. “Credit for condominiums is still an underexplored market in Brazil. But as buildings age and investment needs increase, it tends to become an increasingly important tool for the preservation and appreciation of real estate assets”, says Chalfin.
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Some Brazilian cities, such as the capitals of São Paulo and Rio de Janeiro, are investing in programs such as “Requalifica Centro”, in São Paulo, which provides discounts on IPTU during construction and facilitates the renegotiation of old property debts. “Reviver Centro”, in Rio, is exempt from IPTU and ITBI, and other tax benefits for converting commercial buildings into social housing. Today, São Paulo and Rio account for 86% of the country’s retrofits. The growth of cities and the lack of land in central areas make renovations and updates a way to offer more housing by reusing old and underused buildings.
A survey by Banco Santander and consultancy Bain, for example, indicated that there are 59 similar ventures in five capitals analyzed: São Paulo, Rio de Janeiro, Recife, Salvador and Fortaleza. The number is still considered a fraction of the real estate market, but it represents an improvement compared to the time before incentive programs, when the number of retrofits could be counted on one hand.
