RIO DE JANIERO, BRAZIL-The real estate country of the year award should go to Brazil, which has turned its economy from high risk due to hyperinflation, debt and volatile currency into an attractive investment vehicle with a mounting middle class and high GDP (compared to the rest of the world). An Ernst & Young survey says this celebration could go on, as many savvy investors say they plan to put at least a toe into the Brazilian pool.

Rogerio Basso with the company conducted the survey of 60 international investors, including private equity fund managers, investment bankers and real estate developers. He says 40 of the respondents said they have earmarked investment dollars in the next two years.

Basso, who concentrates on the hospitality market in Brazil, says many of the respondents indicated they are participating in hotel ownership and development. The hotel market is doing well in the country because of locals and tourists, with demand far outweighing supply. “The outlook is particularly promising, since Brazil will host the 2014 FIFA World cup, and the 2016 Olympics,” Basso tells GlobeSt.com. “But what is even better is that those investing in the country say they plan to hold onto their properties as a mid-to-long-term play.”

The country is known for having barriers to entry to international hotel firms, with most of the properties in the country locally owned. However, Basso says most large international firms are finding ways to come into the country, either opening a local office or partnering with local developers. “For example, Marriott recently signed a partnership with PDG Realty to build 50 Fairfield hotels in the next few years in Brazil. There’s currently only four Marriott hotels in the country,” he says.

Other property types will benefit, Basso says, because many investors plan to build hotels within the framework of larger, mixed-use developments in order to offset the high cost of land. There are other obstacles, such as high taxes, restrictive labor laws and lingering transparency issues. “Despite these hurdles, the survey strongly suggests that foreign investors are viewing Brazil as a significant growth market in the mid-term and intend to commit major capital to its real estate sector,” Basso says.