Thursday 23 January 2020

What next for Olympic Park after Rio Games?

After a spectacular closing ceremony, Rio officials must now decide the future for the Olympic Park (AP)
After a spectacular closing ceremony, Rio officials must now decide the future for the Olympic Park (AP)

The celebrations are over and the torch has been extinguished, and now Rio is left with the question of what will become of the Olympic Park.

There are plans to turn it into a bustling recreational district with luxury apartments and offices, but a mid a continuing national recession, the consortium behind the park has sold less than 7% of the Olympic Village's 3,604 apartments - and real estate experts worry a similar fate is ahead for the main Olympic site.

Claudio Tavares de Alencar, president of the Latin American Real Estate Society, said: "Right now we are in the bottom of a well. Nobody is making offers on apartments, and there are many apartments sitting empty."

When Rio de Janeiro was picked as the Olympic host city seven years ago, the country was a darling of the emerging markets. Rich oil fields had been discovered and in 2010, the nation's economy grew by 7.5%.

Bidding wars for apartments were common then, and in 2005 some 1,500 apartments built for the Pan American Games sold out just hours after they went on the market.

But the financial landscape is now very different.

Brazil's economy contracted 3.8% last year and is expected to keep shrinking, affected by a slowing demand for iron ore and other commodities. Across the nation, more than five million people have lost their jobs since the end of 2014.

There is an oversupply of apartments all over Rio, obvious by the sight of partially-built towers. After years of rising, prices per square metre have dropped 6% in the last year-and-a-half to 10,241 Brazilian reals (£2,420).

With financial institutions charging prohibitively high rates for lending, real estate agencies have begun offering incentives such as honeymoon trips or private school tuition.

Rio 2016 organisers and city officials have not talked about how the weak market could affect the potential for development of the 12.7 million sq ft Olympic Park and its environs. But Leonardo Schneider, vice-president of Rio's housing union, said residential and commercial space are key pieces of the puzzle and that too many buildings around the park are unfinished or vacant.

"The problem is how we fill up those apartments," he said. "As good as it sounds to live in the Olympic Park, it's going to take some time to find occupants and transform the area."

Carlos Carvalho, the billionaire who developed the Olympic Park and village, has infuriated many in a country that desperately needs subsidised housing for saying the village caters to the city's elite.

It is called "Ilha Pura" - Pure Island - and apartments average 1.4 million reals (£332,000), offering amenities such as pools, a spa and a beauty salon. Penthouses of 1,700sq ft go for up to 2.3 million reals (£545,800).

Another wealthy developer is building luxury marble and glass high-rise apartments around the Olympic golf course, with units that will start at about £1.5 million.

"They are very nice looking apartments," said Idenir Cunha, a 67-year-old retired physician's assistant who lives in an older complex nearby. "If I had the money, I would love to buy one. But in the middle of this crisis, who does?"

London 2012's village was turned into an affordable housing complex, where people paid below-market purchase prices.

Many in Brazil protested against the 39.1 billion reals (£9.5 billion) in public and private money that went on building Olympic venues and infrastructure - and the spending is not over yet.

The city will pay more than £230,000 to dismantle or convert some of the sporting venues inside the Olympic Park.

The arena that housed fencing and taekwondo will be turned into a school for about 1,000 students with a focus on sport. A racetrack will be added to the park. And salvaged materials from one of the stadiums will be used to build four schools elsewhere.

Brazil faced scrutiny for building expensive venues for the 2014 World Cup that wound up being barely used after the event. Some of the stadiums that cost several times their initial estimates were built in remote areas without first-division football teams and are now playing host to weddings or being used as car parks.

With the Olympics, "everything was conceived in terms of what it would become after the Games", Rio Mayor Eduardo Paes said this weekend in an interview with Globo TV.

As for white elephants? "No way," he said.


PA Media

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