Brazilian REITs (FIIs): A Guide for Global Investors
FIIs (Fundos de Investimento Imobiliário) are Brazil’s version of publicly traded real estate funds. They offer monthly income, exposure to inflation-linked commercial leases, and access to key sectors like shopping malls, logistics, and offices. Structured similarly to REITs, FIIs provide diversified, professionally managed real estate exposure to Latin America’s largest economy.
Brazil currently has among the highest real interest rates in the world, making the opportunity to diversify internationally particularly compelling.
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Este artigo foi originalmente escrito em inglês. Para ler na versão original, mude o idioma do site para Inglês usando o seletor de idiomas no menu.
How Do FIIs Compare to REITs?
FIIs are structured similarly to REITs in many ways. Both are exchange-traded vehicles that invest in income-generating real estate and are required to distribute most of their profits to investors.
However, there are some key differences:
- Legal Structure: FIIs are structured as investment funds regulated by Brazil’s CVM (similar to the SEC), instead of real estate operating companies or trusts.
- Management Style: FIIs typically have external managers, while REITs may be internally or externally managed.
- Leverage Limits: FIIs have stricter limits on leverage (max. 33.33%) and tend to be more conservative financially (many have no debt).
- Dividends: FIIs distribute monthly, and Brazilian law requires that at least 95% of adjusted income be paid out, compared to 90% for REITs.
- Liquidity & Size: The Brazilian market is smaller and less liquid than the U.S. REIT market, with FIIs generally focused on local real estate.
- The market captilization of US REITs is $1.5T
- At least 28 REITs are S&P 500 constituents
- The market capitalization of FIIs is only ~$30B USD
- History: In the United States, Congress established REITs in 1960. Brazil is one of 42 countries worldwide with REIT legislation dating back to 1993. But popularity didn’t grow significantly until 2018.
- Interest Rates: As of June, 2025, the basic interest rate in Brazil is 15.0% and real returns are among the highest in the world. This means the returns from FIIs can be quite attractive.
- Taxation (for locals): Income from FIIs are currently tax exempt for Brazilian Residents, although the rate may increase to 5% starting 2026, based on a tax proposal currently under consideration. Foreign investors will need to account for potential Brazilian withholding taxes, local income taxes and tax treaties between their home country and Brazil.
FIIs tend to offer high returns with low leverage. However, tax advantages generally favor Brazilian residents over foreign investors.
How to Invest in FIIs
FIIs like XPML11 are traded on Brazil’s B3 stock exchange and can be purchased through brokers with access to Brazilian markets, similar to buying international stocks. Each FII has a ticker symbol that typically ends in “11”, indicating a fund (e.g. XPML11, HGBS11, BTLG11).
Investors can gain exposure through:
Individual FIIs, each focused on specific sectors or strategies.
IFIX, the broad benchmark index of Brazilian FIIs. While not a fund itself, some ETFs track it, and it’s often used for performance comparison. Explore IFIX composition and fund weights
HERT11, an ETF launched in June 2025, aimed at international investors. It’s composed of 31 of the largest and most liquid brick-and-mortar (tijolo) FIIs, unlike the IFIX, which has ~40% exposure to credit funds. See HERT11 components and sector exposure
FII Sector Types
US-based National Association of Real Estate Investment Trusts (Nareit) counts 14 different REIT sectors.
In contrast, the Brazilian FII market remains more limited in scope. Most brick-and-mortar FIIs fall into four core categories:
- Shoppings
- Industrial/Logistics
- Escritórios
- Retail/Urban Real Estate
Entire sectors common in the U.S., such as data centers, residential housing, and healthcare facilities, are largely absent or underrepresented in Brazil’s FII landscape.
In addition to these property-based FIIs, credit FIIs, known as CRIs (Certificados de Recebíveis Imobiliários), make up roughly 40% of the IFIX. These funds hold real estate-backed debt instruments such as securitized rent payments and mortgage receivables. CRIs are typically shorter in duration and less leveraged than U.S. mortgage REITs, as they do not rely on interest rate spreads for income.
🔍 Want to Go Deeper?
Each major FII sector has unique characteristics, risk factors, and leading funds. The guides below offer focused insights into how each segment of Brazil’s real estate market works, with sortable fund tables, composition analysis, and sector-specific considerations.
Explore the sector that interests you most:
- 🛍️ Shopping Mall FIIs – Dominated by large operators like XPML11 and VISC11, this sector offers steady rental income from retail tenants.
- 🚚 Logistics & Industrial FIIs – Growing fast with the rise of e-commerce and last-mile delivery needs.
- 🏢 FIIs de Escritórios – Facing headwinds post-pandemic but still significant in portfolio weight.
- 🏘️ Urban Mixed-Use & Retail FIIs – Often small and diversified, with residential, strip malls, and street-level retail exposure, but can also have exposures to large grocers.
- 💳 CRI FIIs (Credit FIIs) – Fixed-income-style funds that invest in real estate-backed securities, with different risk-return profiles.
Key Risks of Investing in FIIs
While FIIs offer attractive yields and diversification, investors should be aware of the unique risks associated with the Brazilian market and the structure of these funds:
1. Currency Risk
FIIs are denominated in Brazilian reais (BRL). Foreign investors are exposed to currency fluctuations, which can significantly impact returns when converted back to USD, EUR, or other home currencies, especially during periods of political or macroeconomic volatility in Brazil.
2. Interest Rate Sensitivity
FIIs are highly sensitive to Brazil’s benchmark interest rate (SELIC). Rising interest rates can:
- Depress FII prices due to higher opportunity costs,
- Increase cap rates on properties, reducing asset values,
- And make fixed-income alternatives more attractive.
This is especially important in a country where rates can swing dramatically year-to-year.
3. Liquidity Constraints
Many FIIs trade with relatively low daily volume compared to global REITs. This can result in:
- Wider bid-ask spreads,
- Difficulty entering or exiting large positions,
- And greater price volatility.
4. Concentration Risk
The FII market is still maturing. Many funds:
- Have a limited track-record,
- Own relatively few assets,
- Or have geographic exposure concentrated in São Paulo or Rio de Janeiro.
This makes diversification within a single fund more difficult.
5. Dilution Risk
To grow, some FIIs issue new shares. While this isn’t inherently negative, it can:
- Dilute existing shareholders if not done at fair value,
- Temporarily depress market prices,
- Or be used by managers to increase AUM (and fees) without proportional benefit to investors.
6. Tax & Regulatory Uncertainty
While FIIs are currently tax-exempt for Brazilian residents and subject to withholding tax for foreigners, there are ongoing discussions in Congress about changing the tax regime. Future changes could result in downward pricing pressure.
7. Manager Quality & Conflicts of Interest
All FIIs are externally managed, and incentives aren’t always aligned. Key concerns include:
- Dilutive transactions to increase AUM,
- Selling crown jewel assets to increase headline yields,
- Focusing on retail promotion instead of long-term value creation,
- And lack of transparency or shareholder engagement.
Choosing high-quality, shareholder-friendly managers is critical.
Sample Brazilian FIIs by Sector
To illustrate the diversity within the FII market, here are some of the most well-known and widely held funds in each major sector. These examples are not investment recommendations, but may serve as a starting point for further research:
Shoppings
- XPML11 – Managed by XP; diversified exposure to retail shopping centers across Brazil.
- VISC11 – One of the largest mall REITs by AUM, managed by Vinci Partners.
- HSML11 – Focused on mid-sized malls, often in secondary cities.
Logistics & Industrial
- HGLG11 – One of the largest and most respected FIIs, with a nearly pure logistics portfolio and a long track record of performance.
- BTLG11 – Managed by BTG Pactual, includes newer logistics parks with the majority of its portfolio witin 60kms of São Paulo.
- BRCO11 – Focused on high-quality logistics assets, often leased to multinational tenants.
Office
- PVBI11 – Premium office buildings in São Paulo, often in Faria Lima.
- RBRP11 – Diversified office strategy with some repositioning exposure.
Retail/Urban Real Estate
- HGRU11 – One of Brazil’s largest urban-focused FIIs, HGRU11 holds properties such as retail outlets and educational facilities in major metropolitan areas
- TRXF11 – Long-term leases with national supermarkets and wholesale grocers.
- RBVA11 – Long-term leases with major banks and essential retail locations such as pharmacies and supermarkets.
Credit (CRI)
- KNCR11 – One of the largest CRI funds, focused on senior structured credit.
- RZAK11 – Actively managed CRI fund with focus on shorter-term duration.
- KNIP11 – Focused on inflation-linked (IPCA) paper.
Hybrid & Others
- GARE11 – Mixes both logistics and urban real estate.
- BCFF11 – Fund-of-funds strategy providing indirect exposure across multiple sectors but multiple layers of fees.
- HTMX11 – A rare example of a hotel-focused FII in Brazil, giving exposure to the tourism market.
- NAVI11 – Exposure to healthcare but only participation in a single hospial.
- TVRI11 – Properties leased only to bank agencies and offices.
- RZAG11 – One of the few listed FIIs focused on agribusiness infrastructure, such as grain silos, logistics hubs, and farmland leases. Has credit/CRI exposure.
Conclusion and Resources
Brazilian FIIs can be a powerful tool for investors seeking exposure to emerging market real estate, offering attractive yields, inflation protection, and portfolio diversification.
But like any investment, they come with both macro and fund-specific risk. On the macro side, international investors need to consider exchange rate volatility, interest rate sensitivity and regulatory risk. On the fund-specific side, investors need to consider the quality and diversification of an FIIs property or credit portfolio, major concentrations such as tenant risk and the general quality of a manager and risk that they might dilute shareholders.
If you’re just starting, consider focusing on funds included in major indexes like the IFIX or HERT11, which provide a pre-vetted group of liquid, widely-held FIIs.
To explore further:
- 🧰 HERT11 ETF Breakdown: A sortable list of 31 brick-and-mortar FIIs in the B3 ETF
- 📊 IFIX Composition Tool: See which FIIs make up Brazil’s main real estate benchmark
- 📝 How I Choose FIIs: My personal criteria for selecting sustainable, high-quality funds
Glossary of Common Terms
FII (Fundo de Investimento Imobiliário)
A Brazilian real estate investment fund. FIIs are publicly traded and invest in income-generating real estate or real estate-backed credit.
REIT (Real Estate Investment Trust)
An investment vehicle that owns and often operates income-producing real estate. Common in the U.S., with similar goals to FIIs.
B3
The main Brazilian stock exchange (Brasil, Bolsa, Balcão), where FIIs and other securities are traded.
11 Ticker Suffix
In Brazil, most FIIs have a ticker ending in “11” (e.g., XPML11, HGLG11) to indicate they are fund shares.
HERT11
An ETF launched in 2025 that tracks a curated portfolio of Brazil’s largest brick-and-mortar FIIs, designed for international investors.
IFIX
The broad benchmark index of FIIs in Brazil. Not a fund itself, but often used to compare performance.
CRI (Certificado de Recebíveis Imobiliários)
Real estate credit certificates held by credit FIIs. These are income-generating debt instruments backed by real estate.
CVM (Comissão de Valores Mobiliários)
Brazil’s equivalent of the SEC. Regulates investment funds and financial markets in Brazil.
Dividend Yield
The annualized dividend income from a fund divided by its share price, expressed as a percentage.
AUM (Assets Under Management)
The total market value of the assets that a fund manager is responsible for investing.
Aviso de Conflito de Interesses
I currently hold long positions in several of the FIIs mentioned in this article, including BTLG11, BRCO11, HSML11 and XPML11. I may also initiate or increase positions in other FIIs discussed here in the future. This content is for informational purposes only and does not constitute financial advice. Always do your own research and consult a licensed advisor before making investment decisions.
Aviso Legal Importante
As informações fornecidas neste site são apenas para fins informativos gerais. Todo o conteúdo se baseia em opiniões pessoais, experiências ou dados publicamente disponíveis e não deve ser interpretado como aconselhamento financeiro, jurídico, tributário ou de investimentos. Nada aqui deve ser entendido como uma recomendação para comprar, vender ou manter qualquer instrumento financeiro.
Não sou consultor financeiro certificado e não conheço sua situação financeira pessoal. Sempre consulte um profissional qualificado antes de tomar qualquer decisão de investimento. O Gringo Investor e seu criador isentam-se de qualquer responsabilidade por perdas ou danos decorrentes do uso dessas informações.
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Este artigo foi originalmente escrito em inglês. Para ler na versão original, mude o idioma do site para Inglês usando o seletor de idiomas no menu.