Building Self-Storage in Brazil: A Developer Explores a Blossoming Industry

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My wife and I visited several Brazilian facilities this year. All of them appear to be doing very well. The most established was on the south end of Belo Horizonte, a city with more than 5 million people in its metro area. A facility representative told us he's been in business for more than 10 years and has an occupancy rate of 87 percent. He said there’s plenty of unmet demand for self-storage in the area.

We were also told that one of the initial obstacles was getting consumers used to the idea of a do-it-yourself business like self-storage. Middle- and upper-class Brazilians have historically depended on servants to do a lot of their manual work. But all of this is quickly changing as they adapt to life in the 21st century.

Belo Horizonte, the capital of the state of Minas Gerais, has a population of about 5 million.

Moving Forward

My wife and I are in the process of choosing a location to open our very own self-storage facility. We’re considering a warehouse that has the capacity for expansion, as we’ll likely convert it in phases. There are many warehouses in Belo Horizonte and other cities. We hope to have the first phase completed within two years.

We’re also looking at partnering with Brazilian and U.S. investors to raise some of the capital for the project. Brazil has taken some positive steps recently to encourage foreign investment, including eliminating a tax on overseas investors.

Working in Brazil can be a challenge for foreigners who know little or no Portuguese. It also helps to understand a lot of the cultural nuances as well as how business is conducted there. In this sense, I feel very blessed to have grown up in the country and have a close network of friends there.

The challenges to doing business in Brazil are easily surmountable, even for those who are new to the country. For starters, Brazilians are known for their warmth and willingness to help. Brazil also has numerous firms including legal and real estate companies that are very knowledgeable in assisting foreign investors. Policy-makers know that creating a business-friendly environment is key to Brazil’s future prosperity and economic growth. As an example, there’s no capital-gains tax for Brazilian investors.

Our recent visit to Brazil only served to reinforce our belief that the self-storage industry has a very good future, one with almost unlimited opportunities.

John Scheibe is founder and general manager of Go Self Storage Brazil LLC, a development company focused on establishing and operating self-storage facilities in Brazil. For more information, call 805.338.2315; e-mail info@goselfstoragebrazil.com; visit www.goselfstoragebrazil.com .

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