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1
Company Presentation
2
Disclaimer
► The material that follows is a presentation of general background information about BR Properties S.A. and ...
3
Company Overview
► Largest public commercial properties company in Brazil
► A GP sponsored company, BR Properties was fo...
4
GLA Breakdown by Type of Property¹ sq m
Portfolio Overview
Market Value of the Portfolio¹ (R$ mm)
36 24 1 61
# of Proper...
5
A unique vehicle, exposed exclusively to Brazilian commercial real estate, extremely well
positioned to benefit from the...
6
NTN-B (% aa.) - July 15th 2010
Real GDP Growth (%)
► Lower interest Rates
► Increased credit availability
► Increasing d...
7
 The potential increase in the nominal interest rate until the end of the year would result in a small
increase in the ...
8
Rio de JaneiroSão Paulo
Low vacancy combined with steady demand and short supply in the near term allow for solid
growth...
9
BR Properties benefits from its strong expertise to add value throughout the whole Real Estate
investment chain…
Unique ...
10
613,645 sqm
993,143 sqm
69,8
1.196,2
101,2
151,2
180,0
182,7
94,1
157,0
DP Araucária BBP TNU Jacarandá
Build.
DP Louvei...
11
3 Unique Business Model: Successful Cases
Note:
1 CBRE’s independent appraisal, as of December 31st, 2009
ROE*: 147%
Sa...
12
Br Properties
22%
10 Organized
Companies
78%
Fragmented Industry (in terms of GLA – sq m) Stages of Our Acquisition Pip...
13
Management Team Biography
Claudio Bruni
CEO
Mr. Bruni’s whole career was dedicated to real estate development and manag...
14
EBITDA (R$ mm) and EBITDA Margin (%)Net Revenues 1Q10 (R$ mm)
Financial Highlights 1Q10
27.281
41.600
52.874
1Q09 1Q10 ...
15
Net Debt 1Q10 (R$ mm)
Solid Balance Sheet
Debt Profile 1Q10 (Index)
Debt Amortization Schedule 1Q10 (R$ mm)
42.008 48.3...
16
Strategy Going Forward
► Deployment of the offering proceeds (R$726 million) over the next 9 to 12 months
► Maintain Lo...
17
São Paulo
Appendix: Office Market
Fonte: CBRE
Rio de Janeiro
18
Appendix: Industrial Market
Fonte: CBRE
São Paulo - Industrial
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Company Presentation

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Company Presentation

  1. 1. 1 Company Presentation
  2. 2. 2 Disclaimer ► The material that follows is a presentation of general background information about BR Properties S.A. and its subsidiaries (“BR Properties” or “BRP” or the “Company”) prepared as of the date of the presentation by BR Properties. ► This information is in summary form and does not purport to be complete. It is not intended to be relied upon as advice to potential investors. Information contained in this material has not been independently verified. Certain information has been obtained from public sources. Information not obtained from public sources and contained herein was prepared solely based on information provided by the Company. No representation or warranty, either express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of the information presented herein. This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice. It is not targeted to the specific investment objectives, financial situation or particular needs of any recipient. It is not intended to provide the basis for any third party evaluation of any securities or any offering of them and should not be considered as a recommendation that any investor should subscribe for or purchase any securities ► Although BR Properties believes that the expectations and assumptions reflected in the forward-looking statements are reasonably based on information currently available to BRP’s management, BR Properties cannot guarantee future results or events. BR Properties expressly disclaims a duty to update any of the forward-looking statement. ► Neither this material nor its content shall be deemed to constitute an offer of or an invitation, or solicitation of an offer to subscribe for or purchase any securities. The information contained herein is subject to change without notice and neither the Company past performance is not indicative of future results. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. ► No person is authorized to give any information or to make any representation not contained in and not consistent with this material and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the Company. ► These materials are strictly confidential and are being submitted to selected recipients only. They may not be reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company. These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
  3. 3. 3 Company Overview ► Largest public commercial properties company in Brazil ► A GP sponsored company, BR Properties was founded in Dec/06 by an experienced team of executives, aiming at acquiring, managing, developing and leasing high quality commercial properties in Brazil ► Company’s portfolio currently holds 61 properties, with approximately 1 million sqm of GLA and estimated market value of R$ 2.98 billion ► Experienced in-house teams: acquisitions, financing, legal and engineering ► Market recognition: proven ability to source deals and execute transactions makes BR Properties the partner of choice for co- development and built-to-suit operations ► 4 greenfield projects, with approximately 150.4 thousand sq m of gross leasable area (GLA) Illustrated Portfolio – Recent AcquisitionsCompany Description The largest and most complete commercial properties company in Brazil  RB 115  11,344 sqm  DP Louveira 8 & 9  88,643 sqm  Acquisition: Jun/10  Manchete Building  26,439 sqm  Acquisition: Jun/10
  4. 4. 4 GLA Breakdown by Type of Property¹ sq m Portfolio Overview Market Value of the Portfolio¹ (R$ mm) 36 24 1 61 # of Properties A top-notch portfolio comprised of office buildings and warehouses, located in the most dynamic regions of Brazil Note: 1 As of June, 2010 BR Properties tenant base entails some of the best known Companies in the country, spanning wide industry diversification ► 150 tenants Main Tenants Tenant Base Breakdown by Industry 1.655 2.9881.311 22 Escritórios Galpões Redesenvolvimento Total 1,655 1,311 22 2,988 255.810 993.143730.148 7.184 Escritórios Galpões Redesenvolvimento TotalWarehouse Office Warehouse RedevelopmentRedevelopmentOffice Storaging Consumer Goods Credit Cards Construction Consulting Publishing Education Energy Pharma Industrial Financial Inst.Government Logistics Media Tecnology Telecom Other
  5. 5. 5 A unique vehicle, exposed exclusively to Brazilian commercial real estate, extremely well positioned to benefit from the bullish fundamentals of the sector in Brazil 1 2 34 5 Favorable Macro-Economic Scenario Attractive Sector Dynamics Unique Business Model Broad Growth Potential: Natural Industry Consolidator World-Class Sponsorship and Tier 1 Management Team Investment Case
  6. 6. 6 NTN-B (% aa.) - July 15th 2010 Real GDP Growth (%) ► Lower interest Rates ► Increased credit availability ► Increasing demand for industrial and distribution space Unemployment Rate (%)¹ Favorable Macro-Economic Conditions 1Q10 Industrial Production Growth (%)¹ 1 Growing industrial production and GDP, declining unemployment rates and single-digit interest rates are fueling sectors exposed to domestic market Source: Brazilian Central Bank Note: 1 Adjusted Seasonally ► Emerging middle class► Pent-up demand for commercial properties 2002 2003 2004 2005 2006 2007 2008 2009 2010E 11.9% 12.4% 11.0% 9.7% 9.7% 8.7% 7.9% 6.8% 6.5% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E 1.3% 2.7% 1.1% 5.7% 3.2% 4.0% 5.7% 5.1% -0.2% 6.3% 4.5% 2005 2006 2007 2008 2009 2010E 3.8% 3.8% 6.2% -17.7% -5.5% 10.5% 6.2% 4% 5% 6% 7% 8% 9% 10% 11% 12% Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10
  7. 7. 7  The potential increase in the nominal interest rate until the end of the year would result in a small increase in the TR, main index that readjusts our financing contracts  The inflation increase, on the other hand, would have a positive effect on the Company’s results, given that 100% of our lease contracts are indexed to inflation rates  Our cash reserves are invested exclusively in bank notes indexed to the Brazilian inter-bank rate (CDI), which would cause an increase in our financial revenues with the forecast increase in the SELIC rate Effects of the Nominal Interest Rate Increase (SELIC vs. TR) Expected Positive Effects of the Growth of Inflation Indexes (TR vs. IPCA vs. BRPR Inflation basket) Source: Santander research 0,00% 7,95% 0,82% 0,97% 4,31% 5,47% 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 2009 2010e BRPR Basket of lease contract inflation readjustment indices TR IPCA (CPI) 8,75% 12,00% 0,82% 0,97% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 2009 2010e Forecast SELIC TR Favorable Macro-Economic Conditions 1Q101
  8. 8. 8 Rio de JaneiroSão Paulo Low vacancy combined with steady demand and short supply in the near term allow for solid growth potential in the commercial properties sector Attractive Sector Dynamics2 Rental Rate (R$/sq m/month) Vacancy Rate (%) Rental Rate (R$/sq m/month) Vacancy Rate (%) New Offerings (‘000 sq m) Gross Absorption (‘000 sq m) New Offerings (‘000 sq m) Gross Absorption (‘000 sq m) Source: CBRE 95 0 30 60 90 120 2005 2006 2007 2008 2009 2010 5.9 0 4 8 12 16 20 2005 2006 2007 2008 2009 2010 123 0 30 60 90 120 150 2005 2006 2007 2008 2009 2010 3.7 0 4 8 12 2005 2006 2007 2008 2009 2010 43 0 50 100 150 200 250 2005 2006 2007 2008 2009 1Q10 148 0 200 400 600 800 2005 2006 2007 2008 2009 1Q10 20 0 50 100 150 2005 2006 2007 2008 2009 1Q10 27 0 40 80 120 160 200 240 2005 2006 2007 2008 2009 1Q10
  9. 9. 9 BR Properties benefits from its strong expertise to add value throughout the whole Real Estate investment chain… Unique Business Model3 Pro-active Deal Sourcing Value Creation Selective Developments Divestment Lease / Property Management Retrofit Conservative Use of Leverage
  10. 10. 10 613,645 sqm 993,143 sqm 69,8 1.196,2 101,2 151,2 180,0 182,7 94,1 157,0 DP Araucária BBP TNU Jacarandá Build. DP Louveira 3,4,5,6 RB 115 DP Louveira 8,9 Manchete Build. Total 3 2010 Gross Leasable Area Evolution Out of 8 acquisitions finalized in 2010, 5 were concluded only three months after IPO ► GLA Acquired: 392,121 sqm ► Acquisitions’ market value: R$1,304 mm ► Amount invested: R$ 1,196 mm ► Concluded Acquisitions: 8 ► Concluded Disinvestments: 3 IPO Jun/10Mar/10Dec/09 Jul/10 ► Crescimento do ABL no ano: 62% ► Valor investido após IPO: R$ 873,8 mm ► 2010 GLA Growth: 62% ► Amount invested after IPO: R$ 873.8 mm 260.0 101.2 151.2 180.0 182.7 94.1 157.0 1,196.2 69.8
  11. 11. 11 3 Unique Business Model: Successful Cases Note: 1 CBRE’s independent appraisal, as of December 31st, 2009 ROE*: 147% Sale Value Addition Henrique Schaumann Acquisition Value R$ 41.0 mm Acquisition Date Nov/07 Re-tenanting R$ 6.5 mm / year (42% increase on rental income) Retrofit Elevators/ Façade/Parking 2009 Appraised Value R$ 78.0 mm Ed. Generali Acquisition Value R$ 16.6 mm Acquisition Date Aug/07 Sale Value R$ 21.5 mm Sale Date Jan/10 Holding Period 29 months IRR 36% * Before taxes 16.6 21.5 Acquisiton Value Sale Value 41.0 78.0 26.97 38.10 - 5,00 10,00 15,00 20,00 25,00 30,00 35,00 40,00 45,00 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 At Acquisition Current Property Value Lease/sq m
  12. 12. 12 Br Properties 22% 10 Organized Companies 78% Fragmented Industry (in terms of GLA – sq m) Stages of Our Acquisition Pipeline Jun/10 (R$ mm) Ample market fragmentation and lack of professional competitors creates a unique environment for market consolidators Broad Growth Potential: Natural Industry Consolidator4 Total Acquisition Pipeline R$3,543R$2,988Current Portfolio Organized Companies 8% Addressable Market: 36.3 mm sq m Non – Organized Market 92% 914 515 1.429 1.476 638 2.114 2.390 1.153 3.543 In Negotiation Under Analysis Total Pipeline Office Industrial Retail Total
  13. 13. 13 Management Team Biography Claudio Bruni CEO Mr. Bruni’s whole career was dedicated to real estate development and management. From 1979 to 1989, Mr. Bruni worked for Multiplan, Brazil’s largest real estate developer, where he was in charge of market research, construction management, commercial and residential planning, and development. From 1983 to 1985, Mr. Bruni was the Managing Director of Renasce, Brazil’s first shopping center management company, a joint venture of Multiplan and Brazilian investment bank Bozano, Simonsen. From 1986 to 1994 Mr. Bruni co-partnered in Visor, a real estate development company dedicated to low income residential housing, where he helped develop 4,000 residential units, generating revenues of US$128 million. In 1988, Mr. Bruni founded Deico, Brazil´s largest independent real estate services company, where he was the CEO until December of 2006. Mr. Bruni served as Executive Vice-President of ABRASCE, Brazil’s shopping center association for 3 years. Mr. Bruni served as a member of the Retail and Commercial Development Council of the Urban Land Institute. Claudio Bruni is a civil engineer, with a graduate degree from The Polytechnic School of Engineering at the University of São Paulo (class of 1978). Industry Experience: 31 Years Martin Jaco CIO Mr. Jaco started his career in Andrade Gutierrez and Metodo Engenharia and joined CB Richard Ellis in 1996 with the objective of developing the investment consultancy operations of the company in Brazil. Mr. Jaco had direct responsibility and involvement in all investment activities of the company in the country in the last 10 years, especially in advising investments for institutional investors, pension funds, property companies and foreign institutions. Martin Jaco graduated as a civil engineer from the Polytechnic School of Engineering at the University of São Paulo, Brazil, MBA from the College of Estate Management, Reading University, UK and a Postgraduate Diploma in Project Management from the Royal Institute of Chartered Surveyors, UK. Industry Experience: 17 Years Marco Antônio Cordeiro COO Mr. Cordeiro was in charge of construction and project management at Schahin Cury and Metodo Engenharia (general contractors) for 15 years. While at Deico, Mr. Cordeiro was in charge of planning, market studies, feasibility analysis and appraisals. Mr. Cordeiro has also been in charge of the consulting division, advising the vast majority of Brazilian pension funds. Mr. Cordeiro has assisted pension funds in over US$350 million of real estate transactions in the last 2 years. Marco Cordeiro is a civil engineer, with a graduate degree from the Polytechnic School of Engineering at the University of São Paulo and specialization at the Business School of Fundação Getúlio Vargas. Industry Experience: 30 Years Pedro Daltro CFO Mr. Daltro started his career in Banco Marka as a Corporate Finance Manager and a Deputy Director. Later, he worked as a VP in the Credit Risk Management department of Citigroup and Treasurer and Financial Manager in Gafisa, the second largest real estate developer in Brazil. After Gafisa, he went back to Citigroup as Director of the Public Sector, Infrastructure and Real Estate division. Pedro Daltro has a bachelor´s degree in Business Administration from Unifacs, Brazil, and MBA from the Owen Graduate School of Management, Vanderbilt University, U.S. Industry Experience: 16 Years BR Properties is managed by a team of seasoned professionals, highly motivated and fully aligned with stockholders through long term stock options plans 5
  14. 14. 14 EBITDA (R$ mm) and EBITDA Margin (%)Net Revenues 1Q10 (R$ mm) Financial Highlights 1Q10 27.281 41.600 52.874 1Q09 1Q10 1Q10 Pro Forma 23.210 35.479 46.753 1Q09 1Q10 1Q10 Pro Forma 85% 85% 88%
  15. 15. 15 Net Debt 1Q10 (R$ mm) Solid Balance Sheet Debt Profile 1Q10 (Index) Debt Amortization Schedule 1Q10 (R$ mm) 42.008 48.312 63.496 56.650 77.812 72.846 81.006 221.818 37.904 24.025 2.738 1.027 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 90.1% 5.1% 4.8% TR IGPM CDI 92 788 90 58 698637 ShortTerm Debt Obligations for Acquisitions LongTerm Debt Total Debt Cash & Equivalents Net Debt
  16. 16. 16 Strategy Going Forward ► Deployment of the offering proceeds (R$726 million) over the next 9 to 12 months ► Maintain Loan to Value of roughly 50% ► Maintain diversification levels of our current portfolio ► Keep development at a level equal to or below 15% of our portfolio ► Maintain focus on key regions of the country
  17. 17. 17 São Paulo Appendix: Office Market Fonte: CBRE Rio de Janeiro
  18. 18. 18 Appendix: Industrial Market Fonte: CBRE São Paulo - Industrial

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