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    Presentation   bof a merrill lynch 2013 brazil conference Presentation bof a merrill lynch 2013 brazil conference Presentation Transcript

    • Company Presentation
    • 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$13.8 billion Diversified tenant base, composed of high credit-quality national and multinational companies Present in 14 Brazilian states 13 greenfield projects, with approximately 322thousand sqm of GLA Fully integrated and experienced in-house teams:acquisitions, financing, legal, property managementand engineering Value creation management strategy through re-tenanting, market realignments, retrofit, andimprovements to technical installations Market recognition: proven ability to source dealsand execute complex transactions Wholly owned property management subsidiary –BRPR ASegments of ActivityOfficeIndustrialRetailC&A PortfolioVenturaDP LouveiraJK Complex - Tower D&E CESVW VinhedoTok & Stok Portfolio
    • Highest Growth in Sector…Impressive growth rate, much higher than the average of its comparables…GLA CAGR 2008 - 2012 Net Revenues CAGR 2008 - 2012FFO CAGR 2008 - 2012 EBITDA CAGR 2008 – 20123Source: CompaniesNotes:1 Malls Average: Considering BR Malls, Multiplan, and Iguatemi2 Properties Average: Considering São Carlos and CCPProperties Average Shopping Malls Average39%-3%14%Properties Average Shopping Malls Average60%30%28%Properties Average Shopping Malls Average82%29%26%Properties Average Shopping Malls Average72%16%31%
    • Ibovespa MSCIBrasil41%-2%4%Ibovespa MSCIBrasil10%-15%-21%BR Properties’ stock has outperformed the most relevant indices over the last years, given itsmore defensive profile in an uncertain economic outlook4Value Creation Since IPOSource: BloombergStock Performance2010Stock Performance2011Stock Performance2012Ibovespa MSCIBrasil38%7%-4%ADTV:R$ 8 millionADTV:R$ 13 millionADTV:R$ 30 million
    • 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%
    • 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
    • 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
    • 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
    • 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
    •  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%
    • 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
    • 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)
    • 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
    • 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 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
    • 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%
    • 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
    • 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
    • 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$25.50Dividend per Share Dividend Yield *
    • 20Appendix – Real Estate MarketNew Supply (sqm) Total Absorption (sqm)Average Rental Price/sqm (R$/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
    • 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
    • ContactInvestor Relations Team22Pedro DaltroChief Financial Officer and IROMarcos HaertelIR ManagerGabriel BarcelosIR AnalystPhone: (55 11) 3201-1000Email: ri@brpr.com.brwww.brpr.com.br