Company presentation august 2013

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Company presentation august 2013

  1. 1. Company Presentation
  2. 2. Company Overview The largest commercial property company in the country, with a portfolio of approximately US$6.3 billion in market value and over 2 million sqm of GLA Company Profile 2  Diversified portfolio, comprised of 123 properties, with 2.2 million sqm of gross leasable area (GLA) and estimated market value of US$6.3 billion  Diversified tenant base, composed of high credit- quality national and multinational companies  Footprint in 14 Brazilian states  6 development projects and 6 landbanks, with approximately 277 thousand sqm of GLA  Wholly self managed company: acquisitions, financing, legal, property management and engineering  Value creation management strategy through re- tenanting, market realignments, retrofit, and improvements to technical installations  Market recognition: proven ability to source deals and execute complex transactions  Wholly owned property management subsidiary – BRPR A Segments of Activity OfficeIndustrialRetail C&A Portfolio Manchete - Statoil DP Louveira - DHL / Unilever Chucri Zaidan - Vivo TNU - Microsoft Brazilian Business Park - multi Tok & Stok Portfolio Note: USD/BRL 2,25
  3. 3. Highest Growth in the Sector Impressive growth rate, much higher than the average of its comparable GLA CAGR 2008 - 2012 Net Revenues CAGR 2008 - 2012 FFO CAGR 2008 - 2012 EBITDA CAGR 2008 – 2012 3 Source: Companies Notes: 1 Malls Average: Considering BR Malls, Multiplan, and Iguatemi 2 Properties Average: Considering São Carlos and CCP Properties Average Shopping Malls Average 39% -3% 14% Properties Average Shopping Malls Average 60% 30% 28% Properties Average Shopping Malls Average 82% 29% 26% Properties Average Shopping Malls Average 72% 16% 31%
  4. 4. Ibovespa -25% -22% Ibovespa 41% -2% Ibovespa 38% 7% Ibovespa 10% -15% BR Properties’ stock has outperformed the most relevant indices over the last years, given its more defensive profile in an uncertain economic outlook 4 Value Creation Since IPO Fonte: Bloomberg Stock Performance 2010 Stock Performance 2011 Stock Performance 2012 ADTV: R$ 8 million ADTV: R$ 13 million ADTV: R$ 30 million Stock Performance 6M13 ADTV: R$ 45 million
  5. 5. CCP São Carlos 5.790 ($ 2.573) 1.722 ($ 765) 2.171 ($ 965) Largest and Most Efficient Company BR Properties has the highest EBITDA margin among all players in the properties and malls sectors 5 Source: Companies Notes: 1 Properties Average: São Carlos and CCP 2 Malls Average: BR Malls and Multiplan 3.4x 2.7x Source: Bloomberg (08/07/2013) Note: USD/BRL 2,25 2Q13 EBITDA Margin BRPR vs Competitors (Market Cap – R$ million) Properties Average Shopping Malls Average 93% 79% 71%
  6. 6. Great Potential for Market Consolidation 6 The Company has a proven track record as the consolidator of the highly fragmented Brazilian commercial properties market Addressable Market1: 36.3 mm sqm BRProperties 10 Organized Companies 58% Organized Companies 12% Non-Organized Market 88% 42% Fragmented Industry¹ (in terms of GLA - sqm) 1 Including existing properties only Note: USD/BRL 2,25 Acquisition Pipeline (R$ million) Office Industrial Total 2.000 (US$ 889) 3.000 (US$ 1.333) 1.000 (US$ 444)
  7. 7. Portfolio: Strategic Positioning 7 Irreplicable portfolio concentrated in São Paulo e Rio de Janeiro, the most liquid and resilient regions of the country — Office: 44 — Warehouse: 37 — Developments: 6 — Retail: 30  Number of Properties : 123  Total Properties GLA: 2,221,712 sqm — Office: 618,121sqm — Warehouse: 1,212,708 sqm — Developments: 84,134 sqm Portfolio Breakdown (% Revenues) Existing Properties/Development (% Market Value) Office Warehouse BRPR Retail Portfolio Footprint % GLA 94% 6% Existing Properties Developments — Landbank: 6 — Landbank:192,695 sqm — Retail: 114,054 sqm 38% 28% 2% 26% 5% Office Rio de Janeiro Office São Paulo Office Other Industrial Retail 67% 22% 11% São Paulo Rio de Janeiro Others
  8. 8. 8 VenturaComplex  Type: Office AAA  Location: Rio de Janeiro/ RJ  CBRE Region: Downtown  Owned GLA: 88,563 sqm  Type: Office AAA  Location: Rio de Janeiro/ RJ  CBRE Region: Downtown  Owned GLA: 95,174 sqm CentroEmpresarialSenado JKComplex–TowersD&E  Type: Office AAA  Location: São Paulo / SP  CBRE Region: Jardins  Owned GLA: 34,583 sqm PateoBandeirantes  Type: Office AAA  Location: São Paulo / SP  CBRE Region: Jardins  Owned GLA: 17,458 sqm 82% 18% AAA Office A Office Rio de Janeiro - Revenues (%) São Paulo - Revenues (%) Trophy properties located in São Paulo and Rio de Janeiro account for approximately 70% of Company’s office portfolio Portfolio of Trophy Office Properties 53% 47% AAA Office A Office
  9. 9. 9 DistributionPark-Louveira  Type: Warehouse A Main Tenant  Location: Louveira/ SP  Owned GLA: 339,548 sqm DistributionPark-Araucária QueimadosWarehouse VinhedoWarehouse Portfolio Breakdown (% Revenues) Breakdown of Lease Contracts (% Revenues) Logistics and Distribution portfolio comprised of state-of-art warehouse facilities leased to “triple AAA” credit-quality tenants The Safe Harbor: Logistics and Distribution Centers  Type: Warehouse A Main Tenant  Location: Araucária/ PR  Owned GLA: 42,697 sqm  Type: Warehouse A Main Tenant  Location: Queimados/ RJ  Owned GLA: 24,112 sqm  Type: Warehouse A Main Tenant  Location: Vinhedo/ SP  Owned GLA: 112,501 sqm 64% 36% Build-to-Suit Typical 76% 9% 15% SP RJ Other
  10. 10. 10 Most Defensive and Resilient Business Occupancy Rate (%) Despite having experienced several cycles throughout the years, the Company has maintained very high occupancy rates and significantly low delinquency rates Delinquency Rate (%) 50% 60% 70% 80% 90% 100% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 97% 99% 99% 99% 99% 98% 97% 97% 95% 95% Occupancy Rate 0,9% 0,0% 0,0% 0,3% 1,1% 0,1% 0,3% 0,0% 0,5% 0,0% 0,0%0,0% 1,1% 0,2% 0,0% 0,2% 0,5% 0,4% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
  11. 11. 11 Premier portfolio attracts the best-credit tenants, providing a long-term, high-quality cash flow Tenants Composition by Sector Diversified, High-Credit Quality Tenants Oil & Gas Other Consumer Goods Financial Services Telecom Logistics Industrial Tech 23% 20% 19% 14% 10% 7% 6% 1% Largest Tenants
  12. 12.  Duration of lease contracts: + 6 years Expiration Schedule (% revenues) Market Alignment Schedule (Ex. BTS) (% revenues) Inflation Adjustment Indices Favorable Legal Environment Lease contracts in place allow for stable, predictable cash flows, while creating a very low vacancy risk scenario and considerable upside potential in revenues 12  Annual Inflation Adjustments — 100% of lease contracts are indexed to inflation  Triple Net Contracts — Tenant is responsible for all operating property costs — Costs include: taxes, insurance, and maintenance expenses  Next 2 Years — 47% market alignment — 15% expiration  Bank Guarantees on Leases — Standard practice in Brazil — Protects against delinquencies from smaller tenants  Tenant Delinquency ̶ Delinquency exceeding 30 days, lessor has right to break the contract and remove the tenant Main Characteristics 79% 18% 3% IGP-M IPCA Other 2013 2014 2015 >2016 7% 8% 12% 73% 2013 2014 2015 >2016 21% 26% 41% 12%
  13. 13. Initial 12 months later Initial 45 days later Ventura East (Acquired in Apr/2012) 13 Adding Value: Performance Improvement Outstanding management leads to very fast operating improvements and impressive increases in the short and mid term RB 115 (Delivered in Dec/2010) C&A Portfolio (Acquired in Dec/2010) TNU (Acquired in Mar/2010) Cap Rate +310bps 8,5% 11,6% Cap Rate +380 bps 12,3% 16,1% Cap Rate +260 bps 10,5% 13,1% Cap Rate +180 bps 10,6% 12,4% Initial 3 months later Initial 2Q13
  14. 14. Adding Value: Impressive Real Gains on Rental Prices 14 Leasing Spreads BR Properties continues to take advantage of the favorable market dynamics to update the contracts which are below market ​​levels 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 35,5% 15,9% 22,3% 33,6% 17,3% 15,3% 1,7% 34,4% 18,0% 20,0% 5,4% 14,6% Office Industrial Retail
  15. 15. Adding Value: Portfolio Recycling 15 BR Properties maintains a constant portfolio recycling by selling properties that have reached their maturity and full potential for value creation Exit Cap RatesSold Properties (R$ million) Average 2009 Average 2010 Average 2011 Average 2012 11,4% 8,6% 9,2% 8,4% Average 6M13 8,2% 2009 2010 2011 2012 6M13 Total 90 364 37 89 137 10
  16. 16. Adding Value: Selective Developments 16 6 development projects, which once finalized, will correspond to 84,134 thousand sqm of GLA Ongoing Projects CES:Retail  Type: Retail  Location: Rio de Janeiro / RJ  Delivery Date: 3Q13  Owned GLA: 2,881 sqm  Stake: 100%  Type: Office A  Location: São Paulo / SP  Delivery Date: 3Q13 – Phase 1  Owned GLA: 5,185 sqm  Stake: 50% PanaméricaGreenPark GaiaTerra-Araucária  Type: Warehouse  Location: Jarinú / SP  Delivery Date: 2Q14 – Phase 2  Owned GLA: 14,388 sqm  Stake: 67%  Type: Warehouse  Location: Louveira / SP  Delivery Date: 3Q13  Owned GLA: 30,122 sqm  Stake: 100% DPLouveira7  Type: Office A  Location: São Paulo / SP  Delivery Date: 3Q14  Owned GLA: 2.019 sqm  Stake: 50% Ed.SouzaAranha JKComplex–TowerB  Type: Office AAA  Location: São Paulo / SP  Data de Entrega: 3Q14  Owned GLA: 29,539 sqm  Stake: 100%
  17. 17. 17 Landbanks  Type: Warehouse  Location: São José dos Campos / SP  Delivery Date: n/a  Owned GLA: 125,000 sqm  Stake: 100% TechParkSJC Adding Value: Selective Developments In addition to 6 landbanks projects, which once finalized, will correspond to 192,695 thousand sqm of GLA  Type: Office  Location: Rio de Janeiro / RJ  Delivery Date: n/a  Owned GLA: 22,000 sqm  Stake: 100 CESII  Type: Office  Location: Rio de Janeiro / RJ  Delivery Date: n/a  Owned GLA: 21,989 sqm  Stake: 100 Bayview GaiaTerra-Castanheira  Type: Warehouse  Location: Jarinú / SP  Delivery Date: n/a – Phase 3  Owned GLA: 14,388 sqm  Stake: 67  Type: Office A  Location: São Paulo / SP  Delivery Date: n/a – Phase 2  Owned GLA: 4,659 sqm  Stake: 50% PanaméricaGreenPark–Phase2  Type: Office A  Location: São Paulo / SP  Delivery Date: n/a – Phase 3  Owned GLA: 4,659 sqm  Stake: 50% PanaméricaGreenPark–Phase3
  18. 18. 2010 2011 2012 6M12 6M13 72,0 124,9 154,2 62,4 166,0 2010 2011 2012 6M12 6M13 178,4 312,1 568,8 237,2 433,3 2010 2011 2012 6M12 6M13 204,5 343,5 630,8 262,1 464,1 18 Net Revenues (R$ mm) Adjusted EBITDA and Margin (R$ mm and %) Adjusted FFO and Margin (R$ mm and %) 209% Financial Highlights: P & L 77% 219% 83% 114% 166% 87% 91% 90% 90% 93% 34% 36% 24% 24% 36%
  19. 19. 19 Cash and Cash Equivalents 2Q13 Debt Profile Financial Highlights: Balance Sheet Indebtedness 2009 2010 2011 2012 1Q13 2Q13 89 232 1.032 574 771 661 41% 42% 11% 1% 6% TR CDI IGPM INPC IPCA Debt Breakdown 2009 2010 2011 2012 6M13 636 1.830 2.083 5.252 5.672 547 1.598 1.051 4.678 5.011 Gross Indebtedness Net Indebtedness IGP-M IPCA INPC TR CDI 620 325 45 2,345 2,370 10.26% 6.91% 12.07% 9.96% 0.97% Índex Balance (R$mm) Average Coupon
  20. 20. 20 Loan-to-ValueDebt Service Coverage Ratio Financial Highlights: Indebtedness Debt Amortization Schedule (R$ million) Net Debt / EBITDA 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 288 784 265 887 511 332 336 187 94 75 70 72 60 Principal 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 2,5x 3,5x 2,4x 2,1x 1,4x 1,6x 2,7x 2,5x 3,0x 1,1x 1,5x 1,5x 1,7x 2,0x EBITDA / Net Financial Expenses 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 2,5x 3,5x 2,4x 2,1x 1,4x 1,6x 2,7x 2,5x 3,0x 1,1x 1,5x 1,5x 1,7x 2,0x EBITDA / Net Financial Expenses 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 38% 40% 24% 40% 45% 43% 42% 41% 40% 39% 37% 38% 39% 40% 4% 23% 21% 36% 36% 35% 21% 21% 30% 35% 34% 34% 34% 36% LTV Gross Debt LTV Net Debt 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 0,6x 3,7x 4,9x 7,0x 6,0x 5,5x 3,2x 3,4x 9,7x 7,8x 7,3x 6,7x 5,6x 5,7x Net Debt/EBITDA
  21. 21. 21 Growing Dividend Payouts Defensive player and significant free cash flow generator with all revenues indexed to inflation * Considering BRPR3’s closing price in 12/28/2012 – R$25.50 2010 2011 2012 R$ 0,108 R$ 0,193 R$ 0,513 79% 166% 2010 2011 2012 0,6% 1,0% 2,0% 75% 93% Dividend per Share Dividend Yield *
  22. 22. 22 Appendix - Real Estate Market New Supply (sqm) * Total Absorption (sqm) * Average Rental Price/sqm (R$/month) Vacancy Rate (%) 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 2007 2008 2009 2010 2011 2012 São Paulo Rio de Janeiro 50 70 90 110 130 150 170 190 2007 2008 2009 2010 2011 2012 São Paulo Rio de Janeiro 1,0% 3,0% 5,0% 7,0% 9,0% 11,0% 13,0% 15,0% 2007 2008 2009 2010 2011 2012 São Paulo Rio de Janeiro *Excluding Alphaville and Barra da Tijuca regions - 50.000 100.000 150.000 200.000 250.000 300.000 350.000 400.000 450.000 500.000 2007 2008 2009 2010 2011 2012 São Paulo Rio de Janeiro Source: CBRE
  23. 23. Contact Investor Relations Team 23 Pedro Daltro Chief Financial Officer and IRO pedro@brpr.com.br +55 11 3201-1020 Marcos Haertel Investor Relations Manager marcos@brpr.com.br +55 11 3201-1044 Gabriel Barcelos Investor Relations Analyst gabriel@brpr.com.br +55 11 3201-1031 Investor Relations e-mail: ri@brpr.com.br www.brpr.com.br

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