The “financial engineering” behind the record number of real estate fund issuances.

Real Estate Investment Funds (REITs) hit a record in offering volume in 2025, with R$ 79.18 billion in issuances, a volume 77% higher than the previous year, according to data from Anbima. This was possible amidst a risk-averse market and high interest rates because most of the issuances occurred through share swaps or market consolidation.

But behind this record lies "financial engineering." An exclusive survey conducted by Clube FII at the request of NeoFeed analyzed 152 listed REIT offerings completed last year and showed that only 36.7% of the issuances represented an inflow of new cash. Almost 60% of the issuances used shares to guarantee the operation.

To map the allocation of resources, Clube FII cross-referenced information from the offerings with other fund announcements, such as relevant acquisition facts, and contacted 22 fund managers directly.

Within the analyzed universe, the volume of issuances in 2025 was R$ 29.73 billion. The movement was led by real estate funds, with R$ 17.46 billion issued, of which 54.4% were issued for acquisitions via share swaps, whether of real estate assets, asset portfolios from other funds, or even the incorporation of other funds.

“It’s not a new practice; it’s been done since 2021. But the movement accelerated significantly in 2024 and 2025. It’s certainly never been at this level before,” says Danilo Barbosa, partner and head of Research at Clube FII.

What led to this was the scarcity of liquidity in the market, with high interest rates for an extended period and investors avoiding risk allocations, making it impossible for managers to raise the necessary funds to buy the opportunities they saw, which were not few.

The sellers had been waiting for an opportunity for quite some time, but the window of opportunity didn't seem to be opening anytime soon. So, the transactions took place through the exchange of shares.

“The capital market was closed to new investments, but it is precisely in these moments that the buyer's market becomes more attractive. It's the return of 'barter,' with the currency of exchange being the share. This works as long as it has liquidity,” says Vitor Duarte, CIO of Suno Asset.

Large numbers and market consolidation

The firm that drew the market's attention to the increased use of this form of exchange was TRX, an asset manager with approximately R$ 6.5 billion under management, which raised around R$ 1 billion at the beginning of last year, of which approximately R$ 750 million came through the exchange of shares with sellers.

“We were negotiating the purchase of a large real estate portfolio from a family. Without the possibility of raising the funds on the market, the transaction was done through shares,” says Vinícius Araújo, director of investor relations at TRX. “But after that, we started being approached by other families wanting the same thing. And in the second half of the year, we had a pipeline of around R$ 4 billion.”

Assessing the opportunities that arose, the asset manager carried out a R$ 3 billion issuance for TRXF11 in the second half of the year, of which almost R$ 2 billion came from subscription/exchange of shares, completed in December. This was the largest transaction of its kind in the market that year.

Another case with a major impact on the market was that of Patria, which last year secured a transaction of R$ 1.4 billion, paid for with shares of HGRU 11 (Pátria Renda Urbana FII RL Única).

“We were already doing this type of operation before, but it has really gained scale now. Sellers have understood it as an option,” says Rodrigo Abbud, partner and head of real estate at Pátria Investimentos.

Some real estate sectors have seen the disappearance of another investor who has dried up liquidity: foreign investors. This is the case in the energy sector. Snel11, a clean energy generation fund from Suno Asset, doubled in size and exceeded R$ 650 million under management by buying assets through shares in the last year.

“Before, we incorporated [properties], but now it’s more worthwhile to buy ready-made because the price has fallen. Foreign investors, who were major buyers, have disappeared. And families who invest in these assets have realized it’s better to sell to a fund like ours,” explains Vitor Duarte, CIO of Suno Asset.

Transactions involving shares also occurred between funds, with asset managers wanting to divest portfolios and others seeking greater operational scale. This led to a significant consolidation of the sector in an unexpected way.

One of the major players in this move was Zagros, whose GGRC11 fund grew from R$850 million under management to R$2.4 billion in less than two years. In 2024, they absorbed half of Bluemacaw's real estate fund with Oaktree. And then they bought SNLG from Suno, which came with the purchase of Mogno Capital.

And more recently, it acquired a single-asset fund from Tivio in this way, in addition to several acquisitions of fund portfolios and direct assets using this mechanism.

“Many funds had low liquidity and were unable to grow in the market. And where many saw problems, we saw opportunities and were one of the first to absorb portfolios and funds in this way,” explains Pedro van den Berg, CEO of Zagros Capital.

Advantages and disadvantages for buyer and seller.

Sellers face some disadvantages in this operation, mainly because they forgo the immediate liquidity that only cash payment can provide. If the fund's unit price is not liquid, there may be difficulty in realizing the investment. And the value of the assets then depends on market perception, with the value of the units fluctuating.

For asset managers, having a large sale of units at once is damaging because it impacts their market price, which harms unit holders. And this has generated concerns in the market.

In total, 18 real estate investment funds issued R$ 9.16 billion in shares for property acquisitions. According to Clube FII, these funds trade an average of R$ 10 million per day on the stock exchange each. With the exit door narrower than the entry door, Barbosa warns of the risk of selling pressure.

"All of this is a share held by whoever sold the asset. At some point, that person may want to sell on the market, and the liquidity of the real estate fund is limited," says the head of Research at Clube FII.

Managers say that transactions are being carefully analyzed to avoid this problem. In fact, most asset managers are buying these assets with a contractual exit clause after a certain period, limited in some way, such as to a percentage of the fund's average daily liquidity.

“We closed the deal with the expectation that the shares would only be sold after 90 days and, subsequently, with the limitation of sales to a fraction of up to 20% of the average volume traded in 30 days in the fund,” says Araújo, from TRX.

According to managers who have conducted this type of negotiation, in many cases the owners want to remain as unit holders. These are investors who like having real estate in their portfolio, but feel they lack professional management to achieve the best returns. Furthermore, a fund allows for greater portfolio diversification.

Another point that is gaining traction is estate planning. Dividing real estate among heirs at the correct value is not simple. Distributing shares to everyone, however, keeps the succession organized.

“It’s necessary to know what you’re buying and from whom; it’s part of due diligence. We’re not interested in those who just want to sell. Many families we negotiate with are selling for estate planning reasons. Instead of everyone being part of a holding company, each one has their own shares,” says Abbud, from Patria.

Prospects for the future

A cycle of falling interest rates is expected this year, starting in March, with the Selic rate ending the year around 12% per year. At this level, the market may experience some relief, but it is still far from having an abundance of capital for risk assets that would lead to a return of follow-on offerings.

Therefore, managers are betting that the purchase through share swaps should continue this year. But that's not all; this is a transaction model that's here to stay in the market.

“Even with falling interest rates, the use of quotas will continue to be complementary. There will be a mix, part in quotas and the rest in cash, especially when the transaction is very large. It's a model that the market has already understood as interesting,” says Berg, from Zagros Capital.

Furthermore, tax reform and the new taxation of dividends are changing the way these investors want to be invested in real estate, showing that there are many asset owners interested in becoming unit holders, since the tax changes have made real estate investment trusts (REITs) more advantageous.

“While income remains tax-exempt in REITs, the IBC and CBS rules are affecting the service sector. So the 14% rent will move towards 28%. And there's also the dividend rule, taxing another 10%. Many families are seeing that it's more advantageous to be a shareholder in their assets,” says Duarte, from Suno Asset.