BR Properties is the largest commercial real estate company in Brazil. It has a portfolio of 95 properties totaling 1.16 million square meters across various Brazilian states. The company focuses on office, industrial, and retail properties leased to over 180 tenants. BR Properties has executed over $1 billion in acquisitions since its IPO and has 4 development projects underway that will add 148 thousand square meters of space once completed. The company's business model and Brazil's favorable economic conditions position it for continued growth.
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.
2
3. Company Overview
The largest and most complete commercial properties company in Brazil
Company Profile Segments of Activity
► Largest public commercial properties company in Office
Brazil
► 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 95 properties,
with 1.16 million sqm of GLA and estimated market
value of over R$ 4 billion ► Ventura Towers ► Ed. Sta. Catarina ► Ed. Manchete
Industrial
► 4 greenfield projects, with approximately 148.3
thousand sqm of gross leasable area (GLA)
► Fully integrated and experienced in-house teams:
acquisitions, financing, legal and engineering
► Pro active, value added investment strategy, “hands-
on” approach ► DP Louveira ► DP Araucária
Retail
► 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
► Fully owned Property Management Company
► Portfolio of Retail Properties
3
4. Portfolio Overview: Breakdown and Tenant Base
A top-notch portfolio comprised of office buildings, warehouses, and retail properties located in
the most dynamic regions of Brazil
Market Value of the Portfolio (R$ MM) GLA by Property Type (sqm)
9% 9%
26%
Of f ice Of f ice
Warehouse Warehouse
35% Retail Retail
56%
65%
Main Tenants Tenant Breakdown by Industry
Storage Media
► Over 180 high quality tenants Construction
Other
Consumer
Energy
Goods
Industrial
Technology Logistics
Financial
Services
BR Properties tenant base entails some of the best known Companies
4
in the country, spanning wide industry diversification
5. Impressive success of post-IPO delivery of acquisitions plan
BR Properties has invested over R$ 1.7 bn after its IPO held in March/10, exceeding in 18% the total
target of acquisitions for 2010
Strong execution track record Equity research coverage
► Ability to source deals at attractive prices ► Currently covered by 10 equity research analysts from the
► 11 acquisitions and 5 sales finalized in 2010 main top banks and brokerage firms
+18%
Budget
Actual
Mar-10 Jun-10 Sep-10 Dec-10
Stock Liquidity GLA Evolution and Capital Invested (R$ MM)
► Significant increase in stock liquidity within few months
after IPO 1.159.756 sqm
20
Moving Avg. (30d) 477 1.709
19,00 18
Stock Price
18,00 16
340 19
Volume (R$ MM)
14
Stock Price
17,00 12 730.402 sqm 260
10
16,00 157
8 94
15,00 6 181
180
4
14,00
2
CBOP DP RB 115 DP Ed. Ventura II BBP FII Total
13,00 -
Jacarandá Louveira Louveira Manchete Topázio Comercial
Sep-10 Oct-10 Nov-10 Dec-10 3,4,5,6 8,9 Progressivo
5
6. Portfolio Overview: Recent Acquisitions
Our recent acquisitions were in line with our strategy to acquire properties of exceptional quality,
leased to large tenants, and located in the main economic regions of Brazil
Comercial Progressivo II Real Estate
Investment Fund
Location: Diverse - 13 States
GLA: 122,146 sqm
CAPEX: R$ 477 MM
Owned: 100%
Edifício Manchete Ventura Towers II
Location: Rio de Janeiro / RJ Location: Rio de Janeiro / RJ
GLA: 26,439 sqm GLA: 21,493 sqm
CAPEX: R$ 260 MM CAPEX: R$ 340 MM
Owned: 100% Owned: 41%
6
7. Portfolio Overview: Geographic Presence
BR Properties’ portfolio is present in 13 states of Brazil, covering the southern, southeastern, mid-
western, northern and northeastern regions
N° of existing properties: 95
Office: 40
Warehouse: 25
Retail: 30
Total GLA of the properties: 1,159,756 sqm
Office: 298,003 sqm
Warehouse: 753,684 sqm
Retail: 108,069 sqm
States Total GLA %
São Paulo 892,769 77.0%
Rio de Janeiro 146,264 12.6%
Paraná 63,120 5.4%
Minas Gerais 18,630 1.6%
Bahia 7,607 0.7%
Pernambuco 6,238 0.5%
Alagoas 4,678 0.4%
BRPR
Maranhão 4.663 0.4%
Espírito Santo 3,989 0.3%
Office
Pará 3,418 0.3%
Distrito Federal 2,989 0.3%
Warehouse
Goiás 2,814 0.2%
Ceará 2,577 0.2%
Retail TOTAL 1,159,756 100%
7
8. Portfolio Overview: Developments
The Company currently holds 4 greenfield projects, of which 3 are office buildings and one is an
industrial condominium, that once finalized, will add 148 thousand sqm of GLA to the portfolio
Cidade Jardim
Type: Office AAA
Location: São Paulo / SP
Delivery Date: Jun/2012
GLA: 6,792 sqm
Forecast Rent (R$/sqm): R$ 125.00
Owned: 50%
Pre-certified Building
Panamérica Park II
Type: Office
Location: São Paulo / SP
Delivery Date: Dec/2011
GLA: 14,502 sqm
Forecast Rent (R$/sqm): R$ 48.00
Owned: 50%
Pre-certified Building
8
9. Portfolio Overview: Developments
BR Properties will invest approximately R$ 59.0 MM in these projects in 2011
Souza Aranha
Type: Office
Location: São Paulo / SP
Delivery Date: Dec/2012
GLA: 2,019 sqm
Forecast Rent (R$/sqm): R$ 57.00
Owned: 50%
Tech Park SJC
Type: Industrial
Location: São José dos Campos / SP
Delivery Date: n/a*
GLA: 125,000 sqm
Forecast Rent (R$/sqm): R$ 13.00
* Delivery in several phases
9
10. Investment Case
A unique vehicle, exposed exclusively to Brazilian commercial real estate, extremely well
positioned to benefit from the bullish fundamentals of the sector in Brazil
Favorable
Macro-Economic
Scenario
World-Class
1
Sponsorship Attractive Sector
and Tier 1 Dynamics
5 2
Management Team
4 3
Broad Growth Potential:
Natural Industry Unique Business Model
Consolidator
10
11. 1 Favorable Macro-Economic Conditions
Growing industrial production and GDP, declining unemployment rates and single-digit interest
rates are fueling sectors exposed to domestic market
Real GDP Growth (%) Unemployment Rate (%)¹
► Pent-up demand for commercial properties ► Emerging middle class
7,5%
6,1% 12,3%
5,7% 11,5%
5,1% 11,7% 10,0%
4,5% 9,3%
4,0%
9,9% 8,1%
3,2%
2,7% 7,1%
7,9%
1,1% 6,7%
-0,2%
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E
Industrial Production Growth (%)¹ NTN-B (% aa.)
► Increasing demand for industrial and distribution space ► Lower interest Rates
► Increased credit availability
11,1% 12%
8,3% 11%
5,9%
4,2% 10%
2,7% 3,1% 2,8% 2,9%
0,1% 9%
8%
7%
-7,2%
6% 5.95%
2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E
5%
Source: Santander and Brazilian Central Bank 2007 2008 2009 2010
Note:
1 Adjusted Seasonally
11
12. 1 Favorable Macro-Economic Conditions
► The potential increase in the nominal interest rate until the end of the year would result in a slight 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 Expected Positive Effects of the Growth
Interest Rate Increase of Inflation Indexes
(SELIC vs. TR) (TR vs. IPCA vs. BRPR Inflation basket)
14,0% 12,0%
TR
12,0% 10,75% 12,25%
10,0%
10,0% 7,85% IPCA (CPI)
8,0%
8,0% Avg. Basket
Forecast SELIC 5,90%
6,0% Inflation pass
6,0% TR through 2011
5,32%
4,0%
4,0%
1,74% 1,74%
2,0% 2,0%
0,69% 0,69%
0,0% 0,0%
2010 2011e 2010 2011e
Source: Santander research and Central Bank
12
13. 2 Attractive Sector Dynamics
Low vacancy combined with steady demand and short supply in the near term allow for solid
growth potential in the commercial properties sector
Rental Rate (in R$/sqm/month) in SP + RJ Vacancy Rate (in %) in SP + RJ
140 130 130
18
120 16
100 14
12
80
10
60 8
40 6 4,9
4 3,1
20
2
0 0
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
São Paulo Rio de Janeiro São Paulo Rio de Janeiro
Net Absorption (in ´000 sqm) in SP + RJ New Inventory (in ´000 sqm) in SP + RJ
450 250
400
200
350
300
150
250
200 100
100
75
150
90 85
100 50
50
0 0
2005 2006 2007 2008 2009 3Q2010 2005 2006 2007 2008 2009 3Q2010
Source: CBRE São Paulo Rio de Janeiro São Paulo Rio de Janeiro
13
14. 3 Unique Business Model
BR Properties benefits from its strong expertise to add value throughout the whole Real Estate
investment chain…
Value Creation
Pro-active Lease / Property
Deal Sourcing Management
Selective
Retrofit
Developments
Conservative
Divestment
Use of Leverage
14
15. 3 Fast Portfolio Growth with low vacancy level
Approximately 1.16 million sqm of gross leasable area acquired in less than 4 years
2007 2008 2009 2010
GLA
1,159,756 sqm
IPO
Private
Placement
Market Value
Private 492 3,842 MM
Placement 340
Initial 865
Funding
295
736
-
105 91 14
337
507 - - 22
82
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Today
Dec/10
Stabilized Vacancy: 0.8%
Delinquency: 0.0%
15
16. 3 Lease Contract Characteristics
Lease contracts in place allow for stable, predictable cash flows, while creating a very low vacancy
risk scenario and considerable upside potential in revenues
Main Characteristics Inflation Readjustment Indices
► Annual Inflation Readjustments
► 100% of lease contracts are indexed to inflation
► Triple Net Contracts
► Tenant is responsible for all operating property costs 5%
► Costs include: taxes, insurance, and maintenance expenses
► 3 Year Market Re-alignment 28% IGP-M
► Lessor can mark the leases to market every 3rd year of the IPCA
contract, independent of lease term
Other
► Bank Guarantees on Leases
67%
► Standard practice in Brazil
► Protects against delinquencies from smaller tenants
► Tenant Delinquency
► Delinquency exceeding 30 days, lessor has right to break
the contract and remove the tenant
Expiration Schedule (% revenues) Market Re-alignment Schedule (% revenues)
► Average office lease term: 3-5 years
► Average warehouse lease term: 5-10 years 21%
15%
28%
14%
21%
36%
2% 6%
2011 2012 2013 2014 2011 2012 2013 2014
16
17. 3 Unique Business Model: Successful Cases
Sale Value Addition
Ed. Generali Henrique Schaumann
Acquisition Value R$ 16.6 MM Acquisition Value R$ 41.0 MM
Acquisition Date Aug/07 Acquisition Date Nov/07
Sale Value R$ 21.5 MM R$ 6.5 MM / year (42%
Re-tenanting
increase on rental income)
Sale Date Jan/10
Holding Period 29 months Retrofit Elevators/ Façade/Parking
IRR 36% 2009 Appraised Value R$ 78.0 MM
90,0 38.10 42,00
ROE*: 147%
80,0 37,00
26.97 32,00
70,0
27,00
60,0
22,00
50,0
21.5 78.0 17,00
40,0
12,00
16.6 30,0 7,00
41.0
20,0 2,00
10,0 -3,00
Acquisiton Value Sale Value At Acquisition Current
* Before taxes
Property Value Lease/sq m
Note:
1 CBRE’s independent appraisal, as of December 31st, 2009
17
18. 4 Broad Growth Potential: Natural Industry Consolidator
Ample market fragmentation and lack of professional competitors creates a unique environment
for market consolidators
Fragmented Industry (in terms of GLA – sqm) Acquisition Pipeline (R$ MM)
Addressable Market * : 36.3 MM sqm
Current Portfolio R$3,842 Total Acquisition Pipeline R$2,566
Non – Organized
Market
91%
2.566
1.982
1.402
Organized 1.181 1.164
Companies 801
9% 584
363
221
- - -
In Negotiation Under Analysis Total
Of f ice Industrial Retail Total
34%
BRProperties
66%
10 Organized
Companies
* Does not include retail properties 18
19. 5 Ownership Structure and Share Performance
BR Properties current ownership structure is highly fragmented, with no controlling shareholder,
no shareholders agreement, and over 99% of its shares in free float
GP Investments 50%
11,5%
40% 39,69%
BRPR3
Wellington
Management 30% Ibovespa
5,8%
20%
BlackRock 10%
5,1%
0% 0,55%
Laugar S.A.
4,6% -10%
Silverpeak -20%
2,6%
-30%
Other
70,3%
Total Shares: 139,511,953
Market Cap: R$ 2.5 billion
ADTV (30d): R$ 14,3 million
* As of December 30th, 2010
19
20. 5 Management Team Biography
BR Properties is managed by a team of seasoned professionals, highly motivated and fully aligned
with stockholders through long term stock options plans
Mr. Bruni’s whole career was dedicated to real estate development and management. From 1979 to 1989, Mr. Bruni worked for
Claudio Bruni
Multiplan, Brazil’s largest real estate developer, where he was in charge of market research, construction management, commercial
CEO 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
Mr. Jaco started his career in Andrade Gutierrez and Metodo Engenharia and joined CB Richard Ellis in 1996 with the objective of
Martin Jaco
developing the investment consultancy operations of the company in Brazil. Mr. Jaco had direct responsibility and involvement in all
CIO 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
Mr. Cordeiro was in charge of construction and project management at Schahin Cury and Metodo Engenharia (general contractors)
Marco Antônio
Cordeiro 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
COO assisted pension funds in over US$350 million of real estate transactions in the last 2 years.
Marco Cordeiro is a civil engineer, with a graduate degree from the Polytechnic School of Engineering at the University of São
Paulo and specialization at the Business School of Fundação Getúlio Vargas. Industry Experience: 30 Years
Mr. Daltro started his career in Banco Marka as a Corporate Finance Manager and a Deputy Director. Later, he worked as a VP in
Pedro Daltro
the Credit Risk Management department of Citigroup and Treasurer and Financial Manager in Gafisa, the second largest real estate
CFO developer in Brazil. After Gafisa, he went back to Citigroup as Director of the Public Sector, Infrastructure and Real Estate division.
Pedro Daltro has a bachelor´s degree in Business Administration from Unifacs, Brazil, and MBA from the Owen Graduate School of
Management, Vanderbilt University, U.S. Industry Experience: 16 Years
20
21. Financial Highlights 3Q10
Net Revenues (R$ MM)
111%
108%
31%
183.613
61%
140.177
7% 86.886
53.688 57.336
27.616 94%
3Q09 3Q10 3Q10 Pro Forma 9M09 9M10 9M10 Pro Forma
EBITDA (R$ MM) and EBITDA Margin (%)
93% 92%
85% 85% 88%
84% 85%
82%
130%
5%
135% 37%
162.430 169.831
61% 118.995
8% 8% 73.995
45.356 49.004 53.087
22.580 101%
3Q09 3Q10 3Q10 3Q10 Pro-Forma 9M09 9M10 9M10 9M10 Pro-
Pro Forma (ex-vacancy) Pro Forma Forma
(ex-vacancy)
Adjusted EBITDA Margin
21
22. Solid Balance Sheet
Net Debt 3Q10* (R$ MM) Debt Profile 3Q10* (Index)
974 1.429 539
20%
890
3% TR
IGPM
362 93
CDI
78%
ST Debt Obligations LT Debt Total Debt Cash Net Debt
for
Acquisitions
* Not including the perpetual bond
Debt Service Schedule 3Q10* (R$ MM)
306.114
13%
183.179 186.917
171.337 170.668 174.804 176.497
Interest
106.285
59% 38% 32% i - 18% 90.399 Principal
49% 87%
50% p - 82% i - 14%
59% p - 86% 50.159
i - 10% 24.752
68% p - 90% i - 8% 14.051
39.049 41% 62% i - 25%
51% 50% p - 92%
56% 41%
p - 75%
44%
* Excluding the R$ 240 MM short-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 term debt fully amortized in Nov/10
22
23. Strategy Going Forward
► Maintain our strategy of market consolidation, buying higher quality existing properties and taking advantage of a highly
fragmented sector
► 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
23
24. Appendix: São Paulo Office Market
Asking Lease Rate
Submarkets Vacancy Rate Range (Class A)
(%) (R$/ sq m/ month)
Downtown 4.0% R$ 14.00 - R$ 27.00*
Paulista 3.8% R$ 75.00 - R$ 110.00
Jardins 3.9% R$ 85.00 - R$ 160.00
Marginal 7.5% R$ 45.00 - R$ 110.00
Other 2.3% R$ 50.00 - R$ 70.00
Total Market 4.9% R$ 45.00 - R$ 160.00
Alphaville 21.9% R$ 30.00 - R$ 60.00
* There are no class A buildings in this submarket. Lease
rates apply to the best buildings in the area
Total Stock
Alphaville Downtown
6% 6%
Paulista
Other 17%
20%
Jardins
15% Source: CBRE 3Q10 Market View Report
Marginal
36%
24
25. Appendix: Rio de Janeiro Office Market
Asking Lease Rate
Submarkets Vacancy Rate Range (Class A)
(%) (R$/ sq m/ month)
Downtown 2.4% R$ 100.00 - R$ 180.00
Botafogo 1.2% R$ 110.00 - R$ 150.00
Flamengo 0.9% R$ 90.00 - R$ 130.00
Barra da Tijuca 6.4% R$ 80.00 - R$ 115.00
South Zone 6.4% R$ 120.00 - R$ 180.00
Other 5.5% R$ 60.00 - R$ 90.00
Total Market 3.1% R$ 60.00 - R$ 180.00
Total Stock
South Zone Flamengo
Others 2%
5%
0%
Barra da
Tijuca
12%
Botafogo
14%
Downtown
67%
Source: CBRE 3Q10 Market View Report
25
26. Appendix: São Paulo Industrial Market
Asking Lease Rate
Submarkets Vacancy Rate Range (Class A)
(%) (R$/ sq m/ month)
ABCD * 0.0% R$ 12.00 - R$ 18.00
Atibaia * 24.4% R$ 18.00 - R$ 20.00
Barueri 8.5% R$ 21.00 - R$ 25.00
Cajamar * 3.1% R$ 17.00 - R$ 20.00
Cotia/ Embu * 0.0% R$ 18.00 - R$ 22.00
Greater Campinas 3.7% R$ 15.00 - R$ 25.00
Guarulhos * 2.2% R$ 18.00 - R$ 24.00
Jundiaí * 10.9% R$ 13.00 - R$ 18.00
São Paulo 1.6% R$ 18.00 - R$ 25.00
Sorocaba * 43.0% R$ 16.00 - R$ 20.00
Vale do Paraíba * 13.2% R$ 14.00 - R$ 17.00
Total Market 6.3% R$ 12.00 - R$ 25.00
* The eight submarkets that comprised the "Others" region
in previous reports
Total Stock
ABCD Atibaia Sorocaba
Guarulhos 3% 3%
3%
3%
Vale do
Paraíba Greater
6% Campinas
33%
Cotia/ Embu
7%
Source: CBRE 3Q10 Market View Report
Jundiaí
10%
Cajamar São Paulo
10% Barueri 11%
11% 26
