Company presentation may 2012


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Company presentation may 2012

  1. 1. Company Presentation
  2. 2. Company OverviewThe largest commercial property company in the country, with a portfolio of approximatelyR$12 billion in market value and over 2 million m² of GLACompany Profile2 Diversified portfolio, comprised of 120 properties,with 2,13 million m² of gross leasable area (GLA)and estimated market value of R$11.7 billion Diversified tenant base, composed by high credit-quality multinational companies Present in 14 states of Brazil 14 greenfield projects, with approximately 396thousand m² of GLA Fully integrated and experienced in-house teams:acquisitions, financing, legal and engineering Value creation management strategy through re-tenanting, market realignments, retrofit, andimprovements to technical installations Market recognition: proven ability to source dealsand execute transactions makes BR Properties thepartner of choice for co-development and built-to-suitoperations Fully owned Property Management CompanySegments of ActivityOfficeIndustrialRetailC&A PortfolioTNUDP LouveiraVentura Complex CES - PetrobrásVW VinhedoTok & Stok Portfolio
  3. 3. Extraordinary Growth3Commitment to over-delivering results to its shareholdersIPO(March 2010)Current(March 2012)Growth(Current / IPO)613,499 1,694,016 2.8x150,473 395,793 2.6x7.4% 1.0% Reduction of 640 bps93.9(2009)367.1(Annualized 1Q12)3.9x45.0(2009)207.4(Annualized 1Q12)4.6xExisting PortfolioGLA(m²)Under DevelopmentGLA(m²)Physical VacancyAdjusted EBITDA(R$ mm)Adjusted FFO(R$ mm)83%(2009)91%(1Q12)Most Profitable Player in theSectorAdjusted EBITDAMargin1,719(2009)11.714(March 2012)6.8xTotal Portfolio(R$ mm)
  4. 4. BR Properties’ stock has outperformed the Bovespa index and the other players in the sector,given its more defensive profile in an uncertain economic outlook4BRPR vs. Real Estate SectorPerformance of BRPR since its IPO vs. IbovespaValue Creation Since The IPOSource: Bloomberg (05/14/2012)82%-16%-40%-20%0%20%40%60%80%100%mar-10 jun-10 set-10 dez-10 mar-11 jun-11 set-11 dez-11 mar-12BRPR3IBOV82%-9%-40%-20%0%20%40%60%80%100%mar-10 jun-10 set-10 dez-10 mar-11 jun-11 set-11 dez-11 mar-12BRPR3IMOB
  5. 5. Great Potential for Market Consolidation5The Company has a proven track record as the consolidator of a highly fragmented marketAddressable Market1: 36.3 mm m2BRProperties10 OrganizedCompanies58%OrganizedCompanies11%Non-OrganizedMarket89%42%Fragmented Industry (in terms of GLA - m2)1 Including existing properties only1 Not including retail propertiesBRPR vs Competitors(Market Cap – R$ MM)3.9x 4.1xSource: Bloomberg (05/14/2012)7.2641.848 1.785BR Properties São Carlos CCP
  6. 6. Portfolio OverviewSECTION 1
  7. 7. Portfolio: Strategic Positioning7Irreplicable portfolio, present in 14 states, and mainly concentrated in the best andmost liquid regions of the country— Office: 39— Warehouse: 35— Developments: 14— Retail: 30— Landbank: 2 Number of Properties : 120 Total Properties GLA: 2,133,798 m2— Office: 435,511 m²— Warehouse: 1,144,451 m²— Developments: 395,793 m²— Retail: 114,054 m²— Landbank: 43,989 m²Portfolio Breakdown – Market Value Portfolio Breakdown – Existing Properties/Development (%GLA)OfficeWarehouseBRPRRetailPortfolio Breakdown – Footprint80%20%Developments87%13%Existing Properties67%21%12%São Paulo Rio de Janeiro OthersPre-Merger Post-Merger% GLA67%26%7%OfficeWarehouseRetail
  8. 8. 8Tenant base entails some of the most recognized Companies in the country,spanning wide industry diversificationMainTenantsTenants Composition by SectorPortfolio: High Credit-Quality Tenant23%20% 19%14%10%7%6%1%Oil & Gas Other Consumer Goods Financial Services Telecom Logistics Industrial Tech
  9. 9.  Average office lease term: 3-5 years Average warehouse lease term: 5-10 yearsExpiration Schedule(% revenues)Market Alignment Schedule(% revenues)Inflation Adjustment IndicesPortfolio: Lease Contract CharacteristicsLease contracts in place allow for stable, predictable cash flows, while creating a very lowvacancy risk scenario and considerable upside potential in revenues9 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 maintenanceexpenses Next 3 Years— 90% market alignment— 24% expiration Bank Guarantees on Leases— Standard practice in Brazil— Protects against delinquencies from smaller tenants Tenant Delinquency̶ Delinquency exceeding 30 days, lessor has right tobreak the contract and remove the tenantMain Characteristics82%14%4%IGP-MIPCAOther2012 2013 2014 >20153%10%11%76%2012 2013 2014 >201520%27%43%10%
  10. 10. Growth DriversSECTION 2
  11. 11. Growth Drivers: Acquisitions and Recycling11Acquisition Pipeline (R$ million)Acquisitions: Great acquisition opportunities given the high fragmentation of the market and lowcompetitionSales: Maintain a constant portfolio recycling by selling properties that have reached theirmaturity and full potential for value creationSold Properties (R$ million)902753789592009 2010 2011 2012 Total11.71413.4311.099601 17Current Portfolio Office Retail Industrial Total
  12. 12. 12Henrique Schaumann (Acquired in 2007) Presidente Vargas (Acquired in 2007)Cap Rate Cap RateMid-TermValueTriggerCap Rate+450 bpsCap Rate+230 bpsCap Rate+150 bpsLong-TermValueTrigger+1140 bps +610 bps10,3%11,8%12,3%14,6%10,5%15,0%Growth Drivers: Performance ImprovementOutstanding management leads to very fast operating improvements and impressive increases inthe long runRB 115 (Delivered in Dec/2010) TNU (Acquired in Mar/2010)Ventura (Acquired in Aug/2010)Initial 1Q12 Initial 1Q12 Initial 1Q12Initial 1Q1211,1%22,5%Initial 1Q1213,9%20,0%
  13. 13. Growth Drivers: Performance Improvement (cont’d)13Leasing Spreads – New LeasesCompany has been building a successful track record on increasing spreads in both contractrenegotiation and new leasesLeasing Spreads – RenegotiationsCase Study: Retail TenantDate of Acquisition Dec/2010GLA 97.714 m²Revenues @ Acquisition R$48.7 mmCap Rate @ Acquisition 10.2%Revenues (post-renegotiation)R$59.4 mmCap Rate (6 months afterrenegotiation)12.4%24,1%33,7%36,1%n/a n/a13,1%17,1%n/a n/a3Q11 4Q11 1Q12Office Industrial Retail12,0%39,3%34,0%n/a n/a 0,4%n/a n/a n/a3Q11 4Q11 1Q12Office Industrial Retail
  14. 14. Growth Drivers: Developments14The Company currently holds 14 development projects, which once finalized, will add 396thousand m2 of GLA to the portfolioEd.CidadeJardim Type: Office AAA Location: São Paulo / SP Delivery Date: 4Q12 Owned GLA: 6,792 m2 Stake: 50%PateoBandeirantes Type: Office AAA Location: São Paulo / SP Delivery Date: 2Q12 Owned GLA: 17,458 m2 Stake: 25%Ongoing ProjectsEd.CES Type: Office AAA Location: Rio de Janeiro / RJ Delivery Date: 3Q12 Owned GLA: 95,174 m2 Stake: 100%JKComplex–TowerD&E Type: Office AAA Location: São Paulo / SP Delivery Date: 3Q12 Owned GLA: 34,583 m2 Stake: 100% Type: Office AAA Location: São Paulo / SP Data de Entrega: 1Q14 Owned GLA: 29,539 m2 Stake: 100%JKComplex–TowerB Type: Office AAA Location: São Paulo / SP Delivery Date: 3Q13 Owned GLA: 14,868 m2 Stake: 75%WTNU–TowerIII
  15. 15. 15 Type: Retail Location: Rio de Janeiro / RJ Data de Entrega: 1Q13 Owned GLA: 2,881 m2 Stake: 100%CES:RetailEd.Paulista Type: Office A Location: São Paulo / SP Delivery Date: 3Q12 Owned GLA: 22,855 m2 Stake: 100%Ongoing Projects... And two landbanks with 44 thousand m² of GLA located in the downtown region of Rio deJaneiroGrowth Drivers: Developments Type: Warehouse Location: Louveira / SP Delivery Date: 4Q12 Owned GLA: 30,122 m2 Stake: 100%DPLouveira7PanaméricaGreenPark Type: Office A Location: São Paulo / SP Delivery Date: 1Q13 Owned GLA: 14,502 m2 (3buildings) Stake: 50% Type: Office A Location: São Paulo / SP Delivery Date: 2Q14 Owned GLA: 2.019 m2 Stake: 50% Type: Warehouse Location: São José dos Campos / SP Delivery Date: n/a Owned GLA: 125,000 m2 Stake: 100%Ed.SouzaAranhaTechParkSJC
  16. 16. Financial HighlightsSECTION 3
  17. 17. Financial Highlights17Net Revenues(R$ mm)Adjusted EBITDA and Margin(R$ mm and %)Adjusted FFO and Margin(R$ mm and %)204,5343,577,8101,22010 2011 1Q11 1Q12178,7310,568,491,82010 2011 1Q11 1Q1287%90%88%91%72,0106,08,651,82010 2011 1Q11 1Q1235% 31%11%51%
  18. 18. Indebtedness18Debt Service Schedule Loan-to-ValueST Debt ObligationsforAcquisitionsLT Debt Total Debt Cash Net Debt8474.6643.560143.803 1.1042012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022572 559421 372 308 362243 237 20092 62302425336309287346218 200194190 186Principal InterestNet Debt (03/31/12) Debt Profile (03/31/12)1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q1238% 40%24%40%45% 43% 42% 41% 40%4%23% 21%36% 36%35%21% 21%30%LTV Gross Debt LTV Net Debt47%35%16%1%TRCDIIGPMINPC
  19. 19. ContactInvestor Relations19Pedro DaltroCFO and Investor Relations OfficerLeonardo FernandesInvestor Relations ManagerMarcos HaertelInvestor Relations AnalystPhone: (55 11) 3201-1000Email: