Brazilian shopping mall REITs face pressure from slowing retail sales

The shopping center market in Brazil is facing challenges driven by a slowdown in retailer sales and fiscal uncertainties. According to Rafael Teixeira, manager of the real estate investment fund (FII) VISC11, declining revenue threatens the financial health of merchants, which can subsequently impact occupancy rates and fund performance.

National retail sales fell 3.9% in September 2026 compared to the same period in 2025, according to the Cielo Extended Retail Index. This downturn is attributed to prolonged restrictive monetary policies, as high interest rates increase credit costs and reduce household disposable income for consumption.

Teixeira noted that a sustained decline in sales could lead to increased delinquency, rent renegotiations, and eventual store vacancies. However, for the VISC11 portfolio, delinquency and discount indicators remain controlled at approximately 2%, with an occupancy rate of 93.9%, compared to roughly 94% the previous year.