Brazil's JHSF Diversifies Its Luxury ‘Ecosystem'

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a day ago

For JHSF, a mall isn't just a mall, a restaurant isn't just a restaurant.
They're part of a holistic approach to luxury that the São Paolo-based conglomerate uses to cater to the affluent lifestyle.
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Shopping centers, hotels and restaurants, upscale condos and houses, office towers, surf clubs, an asset management firm — even an exclusive executive airport for private jets — they all sit in the JHSF portfolio. And the company operates dozens of designer stores in Brazil for luxury brands such as Celine, Chloé, Isabel Marant, Balmain and Emilio Pucci while also leasing space to many other high-end names in its centers.
'You have important groups that have malls, but they are just mall operators. You have important groups that operate hotels, but they just manage hotels. And there are groups that operate just restaurants. But there isn't a group that connects to this luxury lifestyle like we do,' said Augusto Martins, the chief executive officer of JHSF.
JHSF is a complex corporation with seven business units that for outsiders isn't easy to get a handle on at first. It's sometimes labeled too narrowly as a builder, though that's how the company began in 1972. The business was founded by brothers Fábio and José Roberto Auriemo and two other partners. The Auriemo family currently holds 55.2 percent of the total capital of the company, which gets its name from the first-name initials of the founders.
For any highly diversified company, there are challenges and opportunities. Expertise across industries, attracting a wider range of talent, and the creating synergies are required. But being diversified, according to Martins, helps buttress the company against macro headwinds, and the various business units of JHSF share many of the same customers.
'All of our businesses are very connected to the high end sector,' Martins said. 'Our customers get off at the airport, take the helicopter, go shopping at our Cidade Jardim shopping center, and dine at a Fasano restaurant. It's a complete experience.'
Or they live in JHSF's mammoth Boa Vista Village, a gated community in Porto Feliz located an hour from São Paulo. In an area roughly the size of Manhattan, Boa Vista Village contains hundreds of large homes and apartments, acres and acres of lush landscaping, golf courses, an equestrian center, a triathlon training center, two polo fields, a spa and a wave pool for surfing, among other amenities.
The Shopping Cidade Jardim mall, located in the Morumbi district of São Paulo, continues to attract top European brands. Van Cleef & Arpels, Brunello Cucinelli and the L'Avenue restaurant from Paris recently opened in the center. Three more luxury brand flagships will soon open, furthering the upscale, international appeal. The shopping center is part of a complex consisting of nine residential towers that are part of the high-end condominium Parque Cidade Jardim, and three commercial towers that make up the Cidade Jardim Corporate Center.
During an interview at the JHSF's Fasano Hotel situated on Manhattan's Fifth Avenue between 62rd and 63rd Streets — where suites start at $970 a night and run as high as $8,000 for a duplex — Martins outlined what can only be described as a full plate of JHSF expansion projects in the works in Brazil and other countries. Over the next five years, the company predicts it will expand its gross leasable area from 58,000 square meters to 99,000 square meters.
Here's what he said is happening:
In September or October this year, Boa Vista Village will open its 'Town Center,' an open-air destination with 15,000 square meters of gross leasable area for approximately 100 designer shops including Gucci and Chloé, as well as restaurants, galleries, entertainment features and a church. It's a setting that Martins said is inspired by the villages of the Hamptons on Long Island's East End.
Shops Faria Lima, a 10,000-square-meter shopping center with stores, restaurants, a cinema and a gym in the heart of São Paulo's technological and financial center, is expected to be complete in 2027. It's being designed by famed architects Sig Bergamin and Murilo Lomas, with famed landscaper Maria João D'Orey.
Usina São Paulo, a hub for corporate offices, media firms, entertainment and culture situated by the Pinheiros River, will house JHSF's new headquarters as it nears completion on a third phase of development.
JHSF's São Paulo Catarina International Airport is being expanded from 12 hangers to 16 hangers for dozens of additional private jets. There's a waiting list of more than 100. The airport is often compared to Teterboro Airport in New Jersey.
The São Paulo Surf Club, with a wave pool for surfing, will open next to the Shopping Cicade Jardim mall. (JHSF's Boa Vista Village Surf Club also has a pool with technology that generates waves for up to 22 seconds each, and which reportedly cost $320 million.)
A fourth expansion of Catarina Fashion Outlet, located in São Roque, 45 minutes from São Paulo. It has more than 51,000 gross square meters leasable area and 300 brands including Coach, Burberry, Aeropostale, Calvin Klein, Ferragamo, Michael Kors and Under Armour.
On the international front, JHSF is rolling out four Fasano Hotels, starting with South Beach, Miami, on Collins Avenue next year. Through 2027, three more hotels will open, in the Mayfair section of London; in Sardinia, Italy, opposite the island of Tavolara, and in Cascais, Portugal, in Quinta da Marinha. JHSF bought the Fasano hotel chain 14 years ago, and opened the Fasano Fifth Avenue hotel and restaurant four years ago. About three years ago, the company opened the Fasano restaurant on Park and 49th Street, the site of the former Four Seasons restaurant, in New York. Considering its proximity to several major financial institutions, the restaurant quickly became a busy power lunch destination. The four-and-a-half-year-old JHSF Capital has roughly $450 million U.S. in assets under management and the team was recently in Dubai and Abu Dhabi meeting with sovereign funds and family offices to raise money for the company's internationalization efforts.
With its unique platform, the family-run, publicly held JHSF is the largest luxury player in Latin America. The company continues to show sales and profit gains despite the luxury sector's global softness.
For the first quarter of 2025, JHSF's gross revenue rose 37 percent to 439.5 million reais, or about $80 million. Adjusted earnings before interest, taxes, depreciation and amortization rose 61 percent to 197.8 million reais, or about $35 million U.S.
Recurring revenues alone rose 36 percent to 332.8 million reais, or about $60 million, with adjusted EBITDA based on recurring figures up 52 percent to 147.4 million reais, or $27 million.
JHSF has begun concentrating more on recurring revenues which include rents from residences, airport hanger space, and retailers in the malls; club memberships; Fasino hotel fees charged to landlords, and JHSF Capital, and do not include real estate changes. These recurring revenues are steady, received regularly, and can be considered a better barometer of a company's financial performance, and a better basis for planning and forecasting.
For all of 2024, recurring revenues rose 21 percent to 1.1 billion reais, or about $200 million, representing 64 percent of the company's total revenue. Adjusted EBITDA rose 42 percent to 495 million reais, or approximately $90 million.
The luxury sector globally has been slowing, but according to Martins, 'In Brazil, there is probably a different scenario from what you find around the world.' The Cidade Jardim shopping center saw sales growth of 25 percent last quarter, and currently is 100 percent occupied. 'This platform, this ecosystem we created, is making a difference,' Martins said.
He also credited JHSF's curation of luxury brand fashion houses and restaurants, citing such recent additions as Celine and Dior, and the Makoto and L'Avenue restaurants. 'We create a mix and an exclusive project that is giving us this power.'
Martins said JHSF further benefits by being less dependent on international tourism, which is drying up around the world amid trade wars and cross-border conflicts. 'Consumer demand is holding up in Brazil,' Martins said. 'Yes, there's a lot of inflation now. We now operate with around 5 percent of inflation in Brazil, but this is in our culture. Unfortunately, inflation is not a new issue. It's an issue that has become natural for us, and this 5 percent rate is historically low. We used to have 30 percent.'
The Brazilian luxury market has been valued at $17.1 billion, according to Bain & Company. The sector in Brazil is projected to experience an annual growth rate of 6 percent to 8 percent until 2030, driven by a growing base of high-net-worth individuals. Even though luxury consumers account for less than 1 percent of Brazil's population, their combined wealth exceeds 3.5 trillion reais ($613 billion), making the demographic a significant economic force. Brazil is home to approximately 380,000 individuals with at least $100 million in assets, highlighting the country's concentration of ultra-wealthy residents. The collective wealth of these individuals represents nearly 31 percent of Brazil's 2023 GDP, which stood at 11.3 trillion reais, or $1.98 trillion.
JHSF has been doubling down on luxury. 'We had two very nice shopping malls in northern Brazil but they are not focused on the high end sector,' Martins said. 'So last year, though JHSF Capital, these two malls were sold. They were not connected to our strategy.'
Martins said JHSF is on a trajectory of good growth. 'We have been investing in these different business units a lot in the past years to diversify our risk, to diversify our structure,' Martins said. 'We are not only in real estate development. It's about connecting with customers in different ways, in different moments of their lives. So we invested a lot to create clubs, to create new hotels, to expand the malls.'
Asked if there is any desire to further diversify the company to businesses or sectors the company is not involved in Martins said: 'We think that now we have a very nice combination of businesses. They are very complementary. So when we [embark] on a new project, we try to have almost all the business units that we operate included. It's about maintaining total attention to our customer. How do they live? Where to they go? What products do they want? We will continue with this attention to their lives.'
Last December, Martins hosted a holiday party for vendors at the Fasano on Fifth Avenue, as a way to say thank-you for their support. Many luxury and designer brands sent representatives. 'Not only have we been working with them at our malls Shopping Cidade Jardim and Shops Jardins, but we have also been connecting them with our high-end customers in our luxury residences, Fasano hotels and restaurants, private clubs, as well as in São Paulo Catarina Executive Airport, the only international private airport in Brazil.' For Martins and JSHF, it's all about connectivity and making it happen in the lap of luxury.
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