Aging cities drive demand for more renovations | Business

The company focuses primarily on the restoration of historic properties. Rio de Janeiro hosts many of these projects, including the National Museum, which suffered a severe fire in 2018, and the Gustavo Capanema Palace, which Concrejato will complete in November.

“Cities are aging, many have buildings over 100 years old,” said Eduardo Viegas, the company’s CEO. While these structures need renovations, it is also essential to recognize the value of restoring them. “From an investment perspective, it might not pay off, but [restoration projects] offer intangible benefits to society,” he said.

The Gustavo Capanema Palace, a modernist building from the 1940s, gained renewed attention after it was nearly sold during the Bolsonaro administration. Once renovated, it will host parts of the Ministry of Culture and exhibitions. “It’s the largest intervention in the building since it was constructed,” Mr. Viegas noted.

The contract with Concrejato was valued at R$85 million. The company installed air conditioning, modernized electrical and fire systems, restored the flooring to its original state, and reinstalled the furniture.

Concrejato also works on restoring structures for the oil, gas, and highway sectors, though 65% of its revenue comes from restoring historical and cultural buildings. “In Brazil, if you stay in just one sector and it faces a crisis, the company might not survive,” said Mr.Viegas. The company reported revenue of R$330 million in 2023 and expects R$500 million this year, which it deems appropriate.

In 2024, it completed other restoration projects in Rio, such as the Docas de Santos building, home to the National Institute of Historic and Artistic Heritage (IPHAN), and the Palace of Democracy, headquarters of the Rio Regional Electoral Court. By December, it will also complete restoration of the domes and façade of the Museum of Fine Arts.

The company is seeking to attract more restoration projects funded by private capital to balance those using public resources or conducted via the Rouanet Law, intended to fund cultural projects, which are the majority.

Payment flows in publicly funded projects are more challenging. Large-scale projects, like the National Museum restoration, must be divided into numerous small phases, hindering progress. “Funding usually stops midway through the project, and we have to find ways to keep activities going, albeit at a reduced pace,” Mr. Viegas said.

Under incentive laws, funds are disbursed in a lump sum, but budget adjustments, common in restoration projects, can pose issues.

With private clients, Concrejato is restoring the Júlio Prestes train station in São Paulo for CCR, refurbishing one façade of the Copan building, and revitalizing the Casa Bradesco building, a cultural venue in the Cidade Matarazzo complex.

In Rio, restoration work on the former Gama Filho University buildings, a listed site with some structures demolished in 2023, will begin in early 2025.

With limited land in its most valuable areas, the capital city has attracted renovation projects for both historic and non-historic buildings. In Cinelândia, Brookfield plans to convert a commercial building over 100 years old into residential rental units.

In Leblon, HSI is renovating the former telephone operator Oi headquarters, with 20,000 square meters of leasable space. The building will maintain its commercial use but will be upgraded to a high-standard, or “AAA,” rating in the corporate real estate market. According to Bruno Greve, HSI director, completion is expected by mid-2026.

In Gávea, developer Aros, Inc is transforming a commercial building, which saw prices fall during the pandemic, into high-end residential units with spaces of 160 square meters. The total sales value is R$250 million, with delivery anticipated in 2027. Developer AZO is also part of the project.