Company presentation october 2012


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Company presentation october 2012

  1. 1. Company Presentation
  2. 2. Company OverviewThe largest commercial property company in the country, with a portfolio of approximatelyR$13.6 billion in market value and over 2 million sqm of GLACompany Profile2 Diversified portfolio, comprised of 122 properties,with 2.2 million sqm of gross leasable area (GLA)and estimated market value of R$13.6 billion Diversified tenant base, composed of high credit-quality national and multinational companies Present in 14 Brazilian states 16 greenfield projects, with approximately 451thousand sqm of GLA Fully integrated and experienced in-house teams:acquisitions, financing, legal, property managementand engineering Value creation management strategy through re-tenanting, market realignments, retrofit, andimprovements to technical installations Market recognition: proven ability to source dealsand execute complex transactions Wholly owned property management subsidiary –BRPR ASegments of ActivityOfficeIndustrialRetailC&A PortfolioTNUDP LouveiraVentura Complex CES - PetrobrásVW VinhedoTok & Stok Portfolio
  3. 3. Properties Average Shopping Malls Average69%14%30%Properties Average Shopping Malls Average96%28%23%Properties Average Shopping Malls Average57%27% 27%Properties Average Shopping Malls Average32%-4%14%Highest Growth in Sector…Impressive growth rate, much higher than the average of its comparables…GLA CAGR 2008 - 2011 Net Revenues CAGR 2008 - 2011FFO CAGR 2008 - 2011 EBITDA CAGR 2008 – 20113Source: CompaniesNotes:1 Malls Average: Considering BR Malls, Multiplan, and Iguatemi2 Properties Average: Considering São Carlos and CCP
  4. 4. CCP São Carlos8.7222.1992.595Largest and Most Efficient Company…BR Properties has the highest EBITDA margin among all players in the properties and mallssectors4Source: CompaniesNotes:1 Considering BR Malls, Multiplan, and Iguatemi – 2Q122 Considering São Carlos and CCP – 2Q124.0x 3.4xSource: Bloomberg (10/22/2012)3Q12 EBITDA MarginBRPR vs Competitors(Market Cap – R$ mm)PropertiesAverageShopping MallsAverage93%86%76%
  5. 5. 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 outlook5Value Creation Since IPO…Source: BloombergStock Performance2010Stock Performance2011Stock Performance9M12Ibovespa MSCIBrasil43%4%-6%
  6. 6. Oil & Gas Other ConsumerGoodsFinancialServicesTelecom Logistics Industrial Tech23%20% 19%14%10%7% 6%1%6Tenant base entails some of the most recognized companies in the country, spanning wideindustry diversificationTenants Composition by SectorHigh Credit-Quality Tenants…MainTenants
  7. 7. 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%0,0%1,0%2,0%3,0%4,0%5,0%1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q127Most Defensive and Resilient Business…Delinquency RateVacancy RateDespite having experienced several cycles throughout the last years, the Company’s delinquencyrate is insignificant2Q11 3Q11 4Q11 1Q12 2Q12 3Q121,5%0,9% 0,9%1,9% 1,9%3,2%2,3%1,5% 1,7%1,3% 1,3%4,5%PhysicalFinancial
  8. 8. Portfolio: Strategic Positioning8Irreplicable portfolio, present in 14 states, and mainly concentrated in the best andmost liquid regions of the country— Office: 41— Warehouse: 35— Developments: 16— Retail: 30 Number of Properties : 122 Total Properties GLA: 2,181,854 sqm— Office: 472,089 sqm— Warehouse: 1,144,451 sqm— Developments: 451,260 sqm— Retail: 114,054 sqmPortfolio Breakdown – Market Value Existing Properties/Development (%GLA)OfficeWarehouseBRPRRetailPortfolio Breakdown – Footprint67%21%12%São Paulo Rio de Janeiro Others% GLA80%20%Existing Properties Developments50%21%24%5%Office AAA Office Industrial Retail
  9. 9.  Average office lease term: 5-10 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— 85% market alignment— 26% 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 Characteristics2012 2013 2014 >20152%8%16%74%2012 2013 2014 >201524%23%38%15%87%9%4%IGP-MIPCAOther
  10. 10. Adding Value: Potential for Market Consolidation10The 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 Retail Total3.4053.75129650
  11. 11. Initial 3Q12Initial 3Q12Initial 3Q12Initial 3Q12Initial 3Q1211Adding Value: Performance ImprovementOutstanding management leads to very fast operating improvements and impressive increases inthe short and mid termVentura West (Acquired in Aug/2010) RB 115 (Acquired in Jun/2010)C&A Portfolio (Acquired in Dec/2010)H. Schaumann (Acquired in 2007) Vargas (Acquired in 2007)TNU (Acquired in Mar/2010)Cap Rate+200 bps10,3%12,3%Cap Rate+230 bps12,3%14,6%Cap Rate+510 bps10,5%15,6%+1215bps11,1%23,3%+660 bps13,9%20,5%Cap RateInitial 3 months later+180 bps10,6%12,4%Cap Rate Cap Rate
  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 Alignments3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q127%10%15% 14%12%39%34%15%27%14%11%28%34%46%Office Industrial Retail3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q1213,6%8%21%24% 24%34%36%16%21%14,4%23%13%16%16% 17%Office Industrial Retail
  13. 13. Adding Value: Selective Developments1316 development projects, which once finalized, will correspond to 451 thousand sqm of GLAEd.CidadeJardim Type: Office AAA Location: São Paulo / SP Delivery Date: 1Q13 Owned GLA: 34,583 sqm Stake: 100%Ed.CES Type: Office AAA Location: São Paulo / SP Delivery Date: 4Q12 Owned GLA: 6,792 sqm Stake: 50%Ongoing ProjectsJKComplex–TowerD&E Type: Office AAA Location: São Paulo / SP Delivery Date: 1Q13 Owned GLA: 14,868 sqm Stake: 75%CES:Retail Type: Office AAA Location: Rio de Janeiro / RJ Delivery Date: 4Q12 Owned GLA: 95,174 sqm Stake: 100%WTNU–TowerIII Type: Office A Location: São Paulo / SP Delivery Date: 1Q13 – Phase 1 Owned GLA: 14,502 sqm (3 towers) Stake: 50%PanaméricaGreenPark Type: Retail Location: Rio de Janeiro / RJ Data de Entrega: 1Q13 Owned GLA: 2,881 sqm Stake: 100%
  14. 14. 14 Type: Warehouse Location: São José dos Campos / SP Delivery Date: n/a Owned GLA: 125,000 sqm Stake: 100%TechParkSJCGaiaTerra Type: Warehouse Location: Jarinú / SP Delivery Date: 2Q13 – Phase 1 Owned GLA: 51,791 sqm (3 Warehouses) Stake: 67%Ongoing ProjectsAdding Value: Selective Developments Type: Warehouse Location: Louveira / SP Delivery Date: 2Q13 Owned GLA: 30,122 sqm Stake: 100%DPLouveira7JKComplex–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: 1Q14 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
  15. 15. Recycling: Sales of Non Core Properties15BR 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 Total903503789133
  16. 16. 2009 2010 2011 9M11 9M1242,472,0106,077,597,22009 2010 2011 9M11 9M1291,1178,4300,7229,4392,716Net Revenues(R$ mm)Adjusted EBITDA and Margin(R$ mm and %)Adjusted FFO and Margin(R$ mm and %)205%230%70%150%Financial Highlights: P & L71%81%87% 90% 91% 91%2009 2010 2011 9M11 9M12112,7204,5343,5253,2430,225%37% 34% 31% 31%23%
  17. 17. 2009 2010 2011 1Q12 2Q12 3Q12892321.0321.10460939417Cash and Cash Equivalents 3Q12 Debt ProfileFinancial Highlights: Balance SheetIndebtedness46%33%14%1%6%TRCDIIGPMINPCIPCA2010 2011 1Q12 2Q12 3Q121.8302.0834.5945.045 4.8931.5981.0513.4894.436 4.499Gross Indebtedness Net Indebtedness
  18. 18. 18Loan-to-Value3Q12 Debt Amortization Schedule (R$ million)Financial Highlights: Indebtedness2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 202586525387 367517574385 375213106 78 64 56 39Principal1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q1238% 40%24%40%45% 43% 42% 41% 40% 39%37%4% 23% 21%36% 36%35%21% 21%30%35% 34%LTV Gross Debt LTV Net Debt
  19. 19. ContactInvestor Relations19Pedro DaltroCFO and Investor Relations OfficerMarcos HaertelInvestor Relations ManagerGabriel BarcelosInvestor Relations AnalystPhone: (55 11) 3201-1000Email: