* Fund sells two buildings for 60 million pounds
* Standard Life says rental prices in Sao Paulo could
* Move is the latest sign of Brazil's cooling property
SAO PAULO, March 27 The fund management arm of
British insurer Standard Life Plc sold its last two real
estate assets in Brazil, saying office rental yields will level
off or even drop in coming years after a recent boom in property
prices in the country.
Standard Life Investments Select Property Fund sold two
buildings in prime areas of Sao Paulo, Brazil's largest city,
for a combined total of 60 million pounds (181 million reais),
the fund said in a press release on Wednesday.
The buildings were purchased in 2010 for a combined 35
The sales are the latest sign of a cooling property market
in Brazil, where home and office prices soared in the past
decade from a mix of fast economic growth, cheap credit and
rising wages. Office prices in Sao Paulo are now comparable to
those in the City of London, one of the world's most expensive,
according to research by real estate services company CBRE.
The sales also add to evidence of foreign investors' more
cautious stance about Latin America's largest economy, which
could grow less than 3 percent for the third straight year in
2013. Foreign direct investment will probably remain strong at
$65 billion, according to central bank estimates, but
investments in stocks and bonds have been more modest.
"We expect the increasing supply of office space in São
Paulo to lead to negative or at least muted rental growth in the
medium term," said Andrew Jackson, manager of Standard Life
Investments Select Property Fund.
"This in no way means that we rule out further investment in
Brazil in the future. We will continue to monitor opportunities
and make decisions based on our extensive research of the
country," he added in a press release.
Both buildings - one at Vila Olimpia district and the other
on the Paulista Avenue - were sold to a domestic fund manager,
Standard Life said.