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Inversiones y Representaciones Sociedad Anónima (IRSA)
Encyclopedia
Inversiones y Representaciones Sociedad Anónima (IRSA) is the leading real estate development firm in Argentina
.
, grew slowly and, as late as 1991, had a book value of around US$120,000. That year, the firm was purchased by a partnership composed of Marcelo Mindlin and Eduardo Elsztain
, the founder's grandson, who had recently obtained support from international financier George Soros
.
The partnership with Soros became profitable for both parties, as the Argentine economy recovered during the 1990s from the severe stagflation
of the previous decade. IRSA entered the international equity market
s with Soros' backing in 1994, raising US$110 million, and purchased three Buenos Aires office buildings and a leading local shopping mall
developer, Alto Palermo S.A.
(APSA), in 1996. The firm's APSA unit later purchased Buenos Aires Design, Galerías Pacífico
, Patio Bullrich
, Patio Olmos
, and a number of other leading Argentine shopping centers, as well as important tourist assets such as the Llao Llao Hotel
, a Bariloche mountain resort privatized in 1997. The following year, the firm redeveloped the historic Abasto de Buenos Aires
, a landmark Art Deco
former wholesale market. The firm, by then, also owned 13 of the most important commercial office buildings in Buenos Aires, enjoying occupancy rates of 97%, and some of the city's highest rents.
IRSA also ventured into the agricultural sector
by purchasing Cresud in 1994. Cresud became a leading landowner of prime pampas agricultural land, controlling over a million hectares (2.5 million acres), as well as acquiring a significant stake in BrasilAgro.
Losses stemming from the Argentine economic crisis that began in 1998 led to Soros' divesting most of his IRSA interests, and by late 1999, the Soros Fund Management
held 7% of the firm's stock. IRSA was forced to retrench somewhat, selling its Venezuela
n interests and the historic Galerías Pacífico
arcade. The group's losses totaled US$590 million during the 1999-2002 crisis, equal to Soros' total return in the venture during the 1990s.
Responsible for half the group's net sales, its seven remaining shopping centers boosted the firm's income following the strong recovery in the Argentine economy after 2002, however, and in 2008, it developed Dot Baires, a 190,000m² (2 million ft²) shopping center and the largest building of its kind in Argentina.
The company resumed its purchases of office buildings during the recovery. Notable among these was Bouchard Plaza
in 2007, which brought the number of such buildings in its portfolio to 17. It also purchased one of three remaining undeveloped lots in the Catalinas Norte
office park in 2009.
IRSA continued to expand into the mortgage lending sector, purchasing 28% of the formerly state owned Banco Hipotecario
, and into the farming and ranching sectors, acquiring the local subsidiary of Amarillo, Texas
-based Cactus Feeders in 2009, as well as into the large Brazil
ian real estate market, establishing IRSA-Cyrela (a joint venture
with Cyrela Brazil Realty
).
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
.
Overview
IRSA (Investments and Brokerage, Inc.) was founded as a realty by Isaac Elsztain, an Argentine Jewish immigrant, in 1943. The small independent realty, based in Buenos AiresBuenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
, grew slowly and, as late as 1991, had a book value of around US$120,000. That year, the firm was purchased by a partnership composed of Marcelo Mindlin and Eduardo Elsztain
Eduardo Elsztain
Eduardo Elsztain is a prominent Argentine businessman.-Career:Eduardo Sergio Elsztain was born in Buenos Aires in 1960. His grandfather, Isaac Elsztain, had founded Inversiones y Representaciones S.A. in 1943 as an independent realty...
, the founder's grandson, who had recently obtained support from international financier George Soros
George Soros
George Soros is a Hungarian-American business magnate, investor, philosopher, and philanthropist. He is the chairman of Soros Fund Management. Soros supports progressive-liberal causes...
.
The partnership with Soros became profitable for both parties, as the Argentine economy recovered during the 1990s from the severe stagflation
Stagflation
In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high...
of the previous decade. IRSA entered the international equity market
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
s with Soros' backing in 1994, raising US$110 million, and purchased three Buenos Aires office buildings and a leading local shopping mall
Shopping mall
A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area — a modern, indoor version...
developer, Alto Palermo S.A.
Alto Palermo S.A.
Alto Palermo S.A. is an Argentine real estate company whose fundamental commercial objectives are the possession, development, administration, acquisition and construction of productive shopping centers...
(APSA), in 1996. The firm's APSA unit later purchased Buenos Aires Design, Galerías Pacífico
Galerías Pacífico
Galerías Pacífico is a shopping centre in Buenos Aires, Argentina, located at the intersection of Florida Street and Córdoba Avenue.-Overview:...
, Patio Bullrich
Patio Bullrich
Patio Bullrich is an important shopping center in the Retiro section of Buenos Aires.-Overview:Designed by English Argentine architect Juan Waldorp, Patio Bullrich was originally built as an auction house in 1867 for the prominent local Bullrich family...
, Patio Olmos
Patio Olmos
Patio Olmos is an architecturally significant shoppng gallery in Córdoba, Argentina, and the city's most important.-History and overview:The development of a suburb southeast of Córdoba proper by developer Miguel Crisol was accompanied by a flurry of public investment...
, and a number of other leading Argentine shopping centers, as well as important tourist assets such as the Llao Llao Hotel
Llao Llao Hotel
The Llao Llao Hotel is located in the tourist resort of San Carlos de Bariloche within the .This famous hotel is situated in the foothills of the Andes on a hill between the Moreno Lake and Nahuel Huapi lakes....
, a Bariloche mountain resort privatized in 1997. The following year, the firm redeveloped the historic Abasto de Buenos Aires
Abasto de Buenos Aires
The Abasto de Buenos Aires was the central wholesale fruit and vegetable market in Buenos Aires, Argentina, from 1893 to 1984. Since 1999, it has served as a shopping mall, Abasto Shopping. It is also famous for being in the area where the tango singer Carlos Gardel, known as El Morocho del Abasto...
, a landmark Art Deco
Art Deco
Art deco , or deco, is an eclectic artistic and design style that began in Paris in the 1920s and flourished internationally throughout the 1930s, into the World War II era. The style influenced all areas of design, including architecture and interior design, industrial design, fashion and...
former wholesale market. The firm, by then, also owned 13 of the most important commercial office buildings in Buenos Aires, enjoying occupancy rates of 97%, and some of the city's highest rents.
IRSA also ventured into the agricultural sector
Agriculture in Argentina
Agriculture is one of the bases of Argentina's economy.Argentine agriculture is relatively capital intensive, today providing about 7% of all employment, and, even during its period of dominance around 1900, accounting for no more than a third of all labor. Having accounted for nearly 20% of GDP as...
by purchasing Cresud in 1994. Cresud became a leading landowner of prime pampas agricultural land, controlling over a million hectares (2.5 million acres), as well as acquiring a significant stake in BrasilAgro.
Losses stemming from the Argentine economic crisis that began in 1998 led to Soros' divesting most of his IRSA interests, and by late 1999, the Soros Fund Management
Soros Fund Management
Soros Fund Management LLC is an American, privately held, hedge fund management firm founded in 1969 by George Soros. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.-Overview:Soros Fund Management...
held 7% of the firm's stock. IRSA was forced to retrench somewhat, selling its Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
n interests and the historic Galerías Pacífico
Galerías Pacífico
Galerías Pacífico is a shopping centre in Buenos Aires, Argentina, located at the intersection of Florida Street and Córdoba Avenue.-Overview:...
arcade. The group's losses totaled US$590 million during the 1999-2002 crisis, equal to Soros' total return in the venture during the 1990s.
Responsible for half the group's net sales, its seven remaining shopping centers boosted the firm's income following the strong recovery in the Argentine economy after 2002, however, and in 2008, it developed Dot Baires, a 190,000m² (2 million ft²) shopping center and the largest building of its kind in Argentina.
The company resumed its purchases of office buildings during the recovery. Notable among these was Bouchard Plaza
Bouchard Plaza
Bouchard Plaza is an architecturally significant office building in the San Nicolás ward of Buenos Aires, Argentina.-Overview:The site of the building, on 557 Bouchard Street, was originally occupied by the printing house of La Nación...
in 2007, which brought the number of such buildings in its portfolio to 17. It also purchased one of three remaining undeveloped lots in the Catalinas Norte
Catalinas Norte
Catalinas Norte is an important business complex composed of fifteen commercial office buildings, in two sections, and occupied by numerous leading Argentine companies, foreign subsidiaries, diplomatic offices, and a hotel...
office park in 2009.
IRSA continued to expand into the mortgage lending sector, purchasing 28% of the formerly state owned Banco Hipotecario
Banco Hipotecario
Banco Hipotecario is an important commercial bank in Argentina and the nation's premier mortgage lender.-Overview:The institution was chartered on September 24, 1886, as the Banco Hipotecario Nacional by a bill signed by President Julio Roca...
, and into the farming and ranching sectors, acquiring the local subsidiary of Amarillo, Texas
Amarillo, Texas
Amarillo is the 14th-largest city, by population, in the state of Texas, the largest in the Texas Panhandle, and the seat of Potter County. A portion of the city extends into Randall County. The population was 190,695 at the 2010 census...
-based Cactus Feeders in 2009, as well as into the large Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian real estate market, establishing IRSA-Cyrela (a joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
with Cyrela Brazil Realty
Cyrela Brazil Realty
Cyrela Brazil Realty is the second largest homebuilder and real estate company in Brazil, after PDG Realty. Considered one of the most solid of the civil construction sector, currently operates in 17 states and 55 cities in Brazil and Argentina...
).