* Fund sells two buildings for 60 million pounds
* Standard Life says rental prices in Sao Paulo could decline
* Move is the latest sign of Brazil’s cooling property market
SAO PAULO, March 27 (Reuters) - 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 million pounds.
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.