Presentation bof a merrill lynch 2013 brazil conference

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Presentation bof a merrill lynch 2013 brazil conference

  1. 1. Company Presentation
  2. 2. Company OverviewThe largest commercial property company in the country, with a portfolio of approximatelyR$13.8 billion in market value and over 2 million sqm of GLACompany Profile2 Diversified portfolio, comprised of 123 properties,with 2.2 million sqm of gross leasable area (GLA)and estimated market value of R$13.8 billion Diversified tenant base, composed of high credit-quality national and multinational companies Present in 14 Brazilian states 13 greenfield projects, with approximately 322thousand sqm of GLA Fully integrated and experienced in-house teams:acquisitions, financing, legal, property managementand engineering Value creation management strategy through re-tenanting, market realignments, retrofit, andimprovements to technical installations Market recognition: proven ability to source dealsand execute complex transactions Wholly owned property management subsidiary –BRPR ASegments of ActivityOfficeIndustrialRetailC&A PortfolioVenturaDP LouveiraJK Complex - Tower D&E CESVW VinhedoTok & Stok Portfolio
  3. 3. Highest Growth in Sector…Impressive growth rate, much higher than the average of its comparables…GLA CAGR 2008 - 2012 Net Revenues CAGR 2008 - 2012FFO CAGR 2008 - 2012 EBITDA CAGR 2008 – 20123Source: CompaniesNotes:1 Malls Average: Considering BR Malls, Multiplan, and Iguatemi2 Properties Average: Considering São Carlos and CCPProperties Average Shopping Malls Average39%-3%14%Properties Average Shopping Malls Average60%30%28%Properties Average Shopping Malls Average82%29%26%Properties Average Shopping Malls Average72%16%31%
  4. 4. Ibovespa MSCIBrasil41%-2%4%Ibovespa MSCIBrasil10%-15%-21%BR Properties’ stock has outperformed the most relevant indices over the last years, given itsmore defensive profile in an uncertain economic outlook4Value Creation Since IPOSource: BloombergStock Performance2010Stock Performance2011Stock Performance2012Ibovespa MSCIBrasil38%7%-4%ADTV:R$ 8 millionADTV:R$ 13 millionADTV:R$ 30 million
  5. 5. CCP São Carlos8.2112.0702.592Largest and Most Efficient Company…BR Properties has the highest EBITDA margin among all players in the properties and mallssectors5Source: CompaniesNotes:1 Properties Average: São Carlos and CCP2 Malls Average: BR Malls, Multiplan, and Iguatemi4.0x 3.2xSource: Bloomberg (01/09/2013)2012 EBITDA MarginBRPR vs Competitors(Market Cap – R$ mm)PropertiesAverageShopping MallsAverage90%84%73%
  6. 6. Great Potential for Market Consolidation6The Company has a proven track record as the consolidator of the highly fragmented Braziliancommercial properties marketAddressable Market1: 36.3 mm m2BRProperties10 OrganizedCompanies58%OrganizedCompanies12%Non-OrganizedMarket88%42%Fragmented Industry¹ (in terms of GLA - m2)1 Including existing properties onlyAcquisition Pipeline (R$ million)Office Industrial Total1.8679202.787
  7. 7. Portfolio: Strategic Positioning7Irreplicable portfolio, present in 14 states, and mainly concentrated in the best andmost liquid regions of the country— Office: 44— Warehouse: 36— Developments: 13— Retail: 30 Number of Properties : 123 Total Properties GLA: 2,222,637 sqm— Office: 597,387 sqm— Warehouse: 1,189,693 sqm— Developments: 321,503 sqm— Retail: 114,054 sqmPortfolio Breakdown – Market Value Existing Properties/Development (% Market Value)OfficeWarehouseBRPRRetailPortfolio Breakdown – Footprint67%21%12%São Paulo Rio de Janeiro Others% GLA49%21%25%5%Office AAA Office Industrial Retail90%10%Existing Properties Developments
  8. 8. 8Most Defensive and Resilient Business…Vacancy RateDespite having experienced several cycles throughout the years, the Company’s delinquency andvacancy rate have been consistently lowDelinquency Rate1Q12 2Q12 3Q12 4Q121,0%1,9%3,2%2,6%1,1%1,3%4,5%4,0%PhysicalFinancial0,9%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%0,0%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
  9. 9. Oil & Gas Other ConsumerGoodsFinancialServicesTelecom Logistics Industrial Tech23%20% 19%14%10%7% 6%1%9Tenant base entails some of the most recognized companies in the country, spanning wideindustry diversificationTenants Composition by SectorHigh Credit-Quality TenantsMainTenants
  10. 10.  Average office lease term: 5-10 years Average warehouse lease term: 5-10 yearsExpiration Schedule(% revenues)Market Alignment Schedule(% revenues)Inflation Adjustment IndicesLease Contract CharacteristicsLease contracts in place allow for stable, predictable cash flows, while creating a very lowvacancy risk scenario and considerable upside potential in revenues10 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 2 Years— 52% market alignment— 16% 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 Characteristics88%8%4%IGP-MIPCAOther2012 2013 2014 >20151%6%9%84%2012 2013 2014 >20157%20%25%48%
  11. 11. Initial 4Q12Initial 12 months laterInitial 45 days laterVentura East (Acquired in Apr/2012)11Adding Value: Performance ImprovementOutstanding management leads to very fast operating improvements and impressive increases inthe short and mid termRB 115 (Delivered in Dec/2010)C&A Portfolio (Acquired in Dec/2010)TNU (Acquired in Mar/2010)Cap Rate+310bps8,5%11,6%Cap Rate+280 bps12,3%15,1%Cap Rate+260 bps10,5%13,1%Cap Rate+180 bps10,6%12,4%Initial 3 months later
  12. 12. Adding Value: Impressive Real Gains on Rental Prices12Leasing Spreads – New LeasesCompany has built a successful track record on increasing spreads in both contract renegotiationand new leasesLeasing Spreads – Lease Renewals and Market Alignments1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q1221%24% 24%34%36%16%21%35%23%13%16%24%16% 17%Office Industrial Retail1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q1215% 14%12%39%34%15%27%8%11%28%34%46%10%Office Industrial Retail2010 2011 201272.492 74.642191.255New Areas Leased (sqm)
  13. 13. Adding Value: Portfolio Recycling13BR Properties maintains a constant portfolio recycling by selling properties that have reachedtheir maturity and full potential for value creationExit Cap RatesSold Properties (R$ million)Average2009Average2010Average2011Average201211,4%8,6%9,2%8,4%2009 2010 2011 2012 Total903533789137
  14. 14. Selective Developments1413 development projects, which once finalized, will correspond to 322 thousand sqm of GLAEd.CidadeJardim Type: Office AAA Location: São Paulo / SP Delivery Date: 1Q13 Owned GLA: 6,792 sqm Stake: 50%Ongoing Projects Type: Office AAA Location: São Paulo / SP Delivery Date: 1Q13 Owned GLA: 14,868 sqm Stake: 75%WTNU–TowerIII Type: Office A Location: São Paulo / SP Delivery Date: 1Q13 – Phase 1 (5,185 sqm) Owned GLA: 14,502 sqm (3 towers) Stake: 50%PanaméricaGreenParkCES:Retail Type: Retail Location: Rio de Janeiro / RJ Data de Entrega: 1Q13 Owned GLA: 2,881 sqm Stake: 100%GaiaTerra Type: Warehouse Location: Jarinú / SP Delivery Date: 2Q13 – Phase 1 (23,017 sqm) Owned GLA: 51,791 sqm (3 Warehouses) Stake: 67% Type: Warehouse Location: Louveira / SP Delivery Date: 3Q13 Owned GLA: 30,122 sqm Stake: 100%DPLouveira7
  15. 15. 15 Type: Warehouse Location: São José dos Campos / SP Delivery Date: n/a Owned GLA: 125,000 sqm Stake: 100%TechParkSJCOngoing ProjectsSelective DevelopmentsJKComplex–TowerB Type: Office A Location: São Paulo / SP Delivery Date: 2Q14 Owned GLA: 2.019 sqm Stake: 50%Ed.SouzaAranha Type: Office AAA Location: São Paulo / SP Data de Entrega: 2Q14 Owned GLA: 29,539 sqm Stake: 100%CESIIBayview Landbank / Office Rio de Janeiro/ RJ 22,000 sqm Downtown Landbank / Office Rio de Janeiro/ RJ 21,989 sqm Downtown
  16. 16. 2009 2010 2011 201242,472,0124,9154,22009 2010 2011 201291,1178,4312,1568,82009 2010 2011 2012112,7204,5343,5630,816Net Revenues(R$ mm)Adjusted EBITDA and Margin(R$ mm and %)Adjusted FFO and Margin(R$ mm and %)460%Financial Highlights: P & L524%81%87% 91% 90%264%37% 34% 36% 24%
  17. 17. 17Cash and Cash Equivalents 4Q12 Debt ProfileFinancial Highlights: Balance SheetIndebtedness2009 2010 2011 2012892321.032574 44%36%13%1%6%TRCDIIGPMINPCIPCA2010 2011 1Q12 2Q12 3Q12 4Q121.8302.0834.5945.045 4.8935.2521.5981.0513.4894.436 4.499 4.678Gross Indebtedness Net Indebtedness
  18. 18. 18Loan-to-Value4Q12 Debt Amortization Schedule (R$ million)Financial Highlights: Indebtedness1T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T1238% 40%24%40%45% 43% 42% 41%40% 39%37% 38%4%23% 21%36% 36%35%21% 21%30%35% 34%34%LTV Bruto LTV Líquido2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025467835313469532350 34919597 77 72 74 62Principal
  19. 19. 19Dividend2010 2011 2012R$ 0,108R$ 0,193R$ 0,51379%166%Dividend distribution in the amount of R$160.0 million, related to the fiscal year ended on December31st, 2012.2010 2011 20120,6%1,0%2,0%75%93%* Considering BRPR3’s closing price in 12/28/2012 – R$25.50Dividend per Share Dividend Yield *
  20. 20. 20Appendix – Real Estate MarketNew Supply (sqm) Total Absorption (sqm)Average Rental Price/sqm (R$/month) Vacancy Rate (%)100.000200.000300.000400.000500.000600.000700.000800.0002007 2008 2009 2010 2011 2012São Paulo Rio de Janeiro5070901101301501701902007 2008 2009 2010 2011 2012São Paulo Rio de Janeiro1,0%3,0%5,0%7,0%9,0%11,0%13,0%15,0%2007 2008 2009 2010 2011 2012São Paulo Rio de Janeiro*Excluding Alphaville and Barra da Tijuca regions-50.000100.000150.000200.000250.000300.000350.000400.000450.000500.0002007 2008 2009 2010 2011 2012São Paulo Rio de JaneiroSource: CBRE
  21. 21. 21Appendix – Real Estate MarketMarginalJardinsPaulistaDowntownAlphavilleSource: BRPR93,550 sqmNew FariaLima/JK2013: 71,233 sqm2014: 0 sqmJK Towers – 34,583 sqm - BRPRCid. Jardim – 3,871 sqm - BRPRVilaOlímpia/Bandeirantes2013: 51,841 sqm2014: 40,022 sqmMarginal (New Berrini)2013: 77,424 sqm2014: 193,831sqmVilaOlímpia/JK2013: 32,000 sqm2014: 90,668 sqmNote: In the areas of new supply described above are included only those which will be effectively vacant upon delivery. Therefore, the numbers aboveexclude pre-leased areas and new supply owned by BR Properties such as Cidade Jardim,the JK Towers, and Panamérica Green Park (PGP).PGP – 9,392 sqm - BRPRMarginal
  22. 22. ContactInvestor Relations Team22Pedro DaltroChief Financial Officer and IROMarcos HaertelIR ManagerGabriel BarcelosIR AnalystPhone: (55 11) 3201-1000Email: ri@brpr.com.brwww.brpr.com.br

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