Company Presentation

Size: px

Start display at page:

Download "Company Presentation"

Byron Glenn
6 years ago
Views:

1 Company Presentation

2 1 Overview

3 Quick Facts 0.2% Delinquency Rate R$ 7.6 Billion Porfolio Value 11.4 years Debt Duration¹ 30% Loan-to-Value² 100% Inflation-linked Leases 46 Properties 4.8 years Average Lease Term 78% Financial Occupancy Rate 2006 Founded 2010 IPO 684,579 Square Meters 1 In Years / Considering the expiration of the Perpetual Bond in Net Debt / Portfolio Value (3Q17) 3

BR Properties at a Glance Leading commercial real estate company in Brazil with a strategically located high quality portfolio and a solid tenant base A R$ 7.

and recycling portfolio strategy that adds value to operations Institutional properties portfolio: selected locations, premium tenants and triple A assets Fully integrated in-house teams: M&A,

4 BR Properties at a Glance Leading commercial real estate company in Brazil with a strategically located high quality portfolio and a solid tenant base A R$ 7.6 bn portfolio in the Brazilian market, with 46 properties and a total GLA of over 685 thousand sqm Successful track record of acquisitions as a strategic market consolidator Operational capabilities and recycling portfolio strategy that adds value to operations Institutional properties portfolio: selected locations, premium tenants and triple A assets Fully integrated in-house teams: M&A, property management, rent and engineering Solid balance sheet, with a 30% Net Loan to Value 1 High Quality Portfolio 1 1 Revenue Breakdown By Region By Portfolio 3% 37% 39% 57% 63% Offices: 42 Retail: 1 Warehouse: 3 1 RJ SP Others AAA Office Remaining Portfolio 1 Net Debt / Portfolio Value (3Q17) 4

Company Strategy: The 3 Pillars Operating Efficiency Value Added Growth Capital Structure High-quality properties, located in the most dynamic regions Natural consolidator in a positive industry

5 Company Strategy: The 3 Pillars Operating Efficiency Value Added Growth Capital Structure High-quality properties, located in the most dynamic regions Natural consolidator in a positive industry momentum Well positioned for a lower interest rate environment High occupancy and low delinquency rates Opportunistic portfolio management, focused on off-market deals Amortization schedule alignment with cash flows generation Diversified tenant base with long-term and inflation-protected leases Selective developments and expansions Conservative capital structure and covenant-light balance sheet: 50% NLTV Verticalized property management team Seasoned board of directors in the real estate sector and a strong shareholder base Refinancing efforts 5

6 2 Market Dynamics

7 Real Estate Cycle Vacancy Rate (%) The office market currently presents a high-vacancy and low-property-prices, creating a potential for high returns São Paulo 25% Tenants Market Landlord s Market Tenants Market Landlord s Market Tenants Market Landlord s Market Tenants Market 20% 15% 10% 5% 0% Source: CBRE 7

Real Estate Market New Supply (sqm) 1 Gross Absorption (sqm) 1 600.000 500.000 400.000 300.000 200.000 100.000-2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6M17 900.000 800.000 700.000 600.

8 Real Estate Market New Supply (sqm) 1 Gross Absorption (sqm) M M17 São Paulo Rio de Janeiro São Paulo Rio de Janeiro Average Rent / sqm / month 1 Vacancy Rate (%) ,0% 21,0% ,0% 11,0% 6,0% M17 1,0% M17 São Paulo Rio de Janeiro São Paulo Rio de Janeiro Source: CBRE 1 Not including: Alphaville (SP) and Barra da Tijuca (RJ) Regions 8

Main Office Regions: São Paulo 9 BR Properties focuses in the main regions of São Paulo, which have a strong opportunity growth on the back of

0% 123 Jardins 140 145 143 140 130 128 128 83 82 86 95 103 99 92 87 Economic Slowdown + Oversupply 73 67 68 2007 2008 2009 2010 2011 2012 2013

0% Marginal 200 150 100 105 100 100 73 75 70 78 88 88 88 88 50 73 63 60 60 64 72 65 0 62 49 46 47 2007 2008 2009 2010 2011 2012 2013 2014 2015

7% R$/sqm 250 200 150 90 93 98 100 115 100 60 110 108 95 95 95 50 60 76 80 75 74 78 71 67 0 54 50 51 2007 2008 2009 2010 2011 2012 2013 2014

9 Main Office Regions: São Paulo 9 BR Properties focuses in the main regions of São Paulo, which have a strong opportunity growth on the back of a potential recovery of the average rental price R$/sqm % 123 Jardins Economic Slowdown + Oversupply M17 Alphaville Alphaville Jacarandá São Paulo Ed. Barra Funda Ed. Paulista Old Downtown R$/sqm % Marginal M17 Paulista +23.7% R$/sqm M17 Avg. Rental Price (Nominal) 1 Avg. Rental Price (Real IGPM) 1 Source: CBRE 1 Considering asked price as rental price JK Bloco B Centenário Plaza TNU Panamérica Park & PGP Jardins Celebration Marginal Chácara Sto. Antonio Alexandre Dumas S. Pedro Chucri Zaidan Souza Aranha I & II S. José Sto. Antonio 39% of Total Revenues

Main Office Regions: Rio de Janeiro 10 Opportunity that is also encouraged in Rio de Janeiro, city in which the company is located in the main regions R$/sqm 250 200 150 100

4% 150 120 116 140 150 150 215 215 215 215 215 215 158 170 99 108 110 102 110 150 93 147 139 134 140 140 79 74 70 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6M17 +53.

RB 115 Bolsa RJ Ouvidor 107 Manchete 0 R$/sqm 250 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 6M17 +58.

10 Main Office Regions: Rio de Janeiro 10 Opportunity that is also encouraged in Rio de Janeiro, city in which the company is located in the main regions R$/sqm R$/sqm % M % Downtown Zona Sul Economic Slowdown + Oversupply Rio de Janeiro Icomap Porto Maravilha Ventura Towers Cidade Nova Glória Passeio Vargas Downtown Flamengo RB 115 Bolsa RJ Ouvidor 107 Manchete 0 R$/sqm M % Flamengo Botafogo M Ed. Barra da Tijuca Barra da Tijuca Zona Sul Source: CBRE Avg. Rental Price (Nominal) 1 Avg. Rental Price (Real IGPM) 1 57% of Total Revenues 1 Considering asked price as rental price

11 3 Operating Efficiency

Focus on Top Quality Properties Triple-A Office Buildings Generates 63% of Company s Total Lease Revenues Revenues Breakdown Manchete JK Tower B 37% 63% AAA Office Remaining

29,539 sqm Build-to-Suit Contracts Leased to Triple-A Tenants Provide a Consistent Stream of Cash Flow Lease Contract Breakdown Águas Claras Barra da Tijuca 7% BTS Contracts 93%

12 Focus on Top Quality Properties Triple-A Office Buildings Generates 63% of Company s Total Lease Revenues Revenues Breakdown Manchete JK Tower B 37% 63% AAA Office Remaining Portfolio Type: Office AAA Location: Rio de Janeiro/ RJ CBRE Region: Flamengo Owned GLA: 23,591 sqm Type: Office AAA Location: São Paulo / SP CBRE Region: Jardins Owned GLA: 29,539 sqm Build-to-Suit Contracts Leased to Triple-A Tenants Provide a Consistent Stream of Cash Flow Lease Contract Breakdown Águas Claras Barra da Tijuca 7% BTS Contracts 93% Typical Contracts Type: Office Location: Nova Lima / MG CBRE Region: n/a Owned GLA: 8,932 sqm Type: Office Location: Rio de Janeiro/ RJ CBRE Region: Barra da Tijuca Owned GLA: 23,210 sqm 12

13 Defensive and Resilient Business Despite having experienced several cycles throughout the years, the Company has sustained high financial occupancy rates and very low delinquency rates Financial Occupancy Rate (%) 89% 90% 91% 92% 92% 92% 91% 91% 90% 90% 90% 89% 87% 85% 88% 77% 77% 78% 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Delinquency Rate (%) 2,2% 1,9% 0,9% 0,0% 0,2% 0,5% 0,4% 0,1% 0,0% 0,2% 0,8% 0,4% 0,4% 0,5% 0,1% 0,3% 0,3% 0,3% 0,3% 0,2% 0,2% 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 13

14 High Credit-Quality Tenants Premier portfolio attracts the best-credit tenants, providing a long-term, high-quality cash flow Tenants Breakdown by Sector (% revenues) 34% 15% 15% 11% 10% 5% 5% 3% 1% 1% Oil & Gas Telecom Other Financial Services Consumer Goods Utilities Tech Consulting Construction Mining Largest Tenants 14

15 Long-term, Inflation-Linked Contracts Lease contracts in place allow for stable, predictable cash flows, while creating a very low vacancy risk scenario and considerable upside potential in revenues Characteristics Inflation Adjustment Indices 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 maintenance expenses Mark-to-market opportunity every 3 rd year contract anniversary Average Lease Terms Office and Industrial: 5 10 Years Retail: > 10 Years Bank Guarantees on Leases 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 3% 97% IGP-M IPCA Contract Expiration Schedule (% revenues) Average Duration of Current Lease Contracts Contract Renegotiations Schedule (% revenues) 69% Existing Lease Contracts All Contracts Built-to-Suit Contracts Current Average Duration 4.8 Years 4.0 Years 37% 23% 5% 1% 25% >2020 6% 21% >

16 4 Value Added Growth

17 Long-Standing Track Record of Value Creation Unique ability to source deals at attractive yields and selling properties that have reached their maturity and full potential for value creation, taking advantage of the real estate cycles Gross Leasable Area ( 000 sqm) Phase I & II: Recovery & Expansion + 2MM sqm of GLA in M&A transactions + R$800 mm Private Placements + R$700 mm IPO + R$600 mm Follow-on Phase III & IV: Oversupply & Recession + R$7 bn in Properties Divestments + R$2 bn returned via Dividends + R$300 mm shares buy back + R$2,5 bn Debt Reduction Phase V: Recovery and Growth Acquisition of: Passeio Centenário Plaza ( Robocop ) Galpão Imbuia Galpão Araucária Vacancy Cycle in SP BRPR3 Share Price M17 Founded the Company BR Properties goes public Sold its Position GP CP VI Took Over Company s Control Avg. Entry Cap Rate (%) 12% 13% Avg. Exit Cap Rate (%) 9% 10% Source: CBRE 17

Post-Acquisition Performance Improvement Active property management leads to very fast

Jun/2010) Cap Rate (%) Cap Rate (%) +360bps +310bps 15,6% 11,6% 12,0% 8,5% Market Alignment

(Acquired in Mar/2010) Cap Rate (%) +260 bps 13,1% 10,5% RB 115 RJ (Acquired in Dec/2010) Cap

18 Post-Acquisition Performance Improvement Active property management leads to very fast operational improvements Ventura East RJ (Acquired in April/2012) Manchete RJ (Acquired in Jun/2010) Cap Rate (%) Cap Rate (%) +360bps +310bps 15,6% 11,6% 12,0% 8,5% Market Alignment Initial 45 days later Retrofit, Repositioning and Leasing Initial 12 months later TNU SP (Acquired in Mar/2010) Cap Rate (%) +260 bps 13,1% 10,5% RB 115 RJ (Acquired in Dec/2010) Cap Rate (%) +220 bps 14,5% 12,3% Retrofit, Repositioning and Re-tenanting Initial 12 months later Leasing Initial 12 months later 18

Recent Acquisitions Performance BR Properties: The most active player with expertise to explore the full potential of new properties Passeio Corporate Galpão Imbuia Centenário Plaza The only building

region with limited greenfield opportunities Retrofit strategy to capture value Type Office AAA Type Warehouse Type Office AAA Location Downtown - Rio de Janeiro/RJ Location Cond.

19 Recent Acquisitions Performance BR Properties: The most active player with expertise to explore the full potential of new properties Passeio Corporate Galpão Imbuia Centenário Plaza The only building delivered in 2016 Flight-to-quality movement Strong demand region with high barriers to entry Development of a strong footprint in the sector State-of-the-Art installed infrastructure Consolidated region with limited greenfield opportunities Retrofit strategy to capture value Type Office AAA Type Warehouse Type Office AAA Location Downtown - Rio de Janeiro/RJ Location Cond. Gaia Terra - Jarinu/SP Location Marginal São Paulo/SP Acquisition Date December, 2016 Acquisition Date April, 2017 Acquisition Date May, 2017 Acquisition Value R$ mm Acquisition Value R$ 49.4 mm Acquisition Value R$ 433.4mm Total GLA (sqm) 81,423 Acquisiton Price per sqm R$ 8,781 Total GLA (sqm) 22,986 Acquisiton Price per sqm R$ 2,150 Total GLA (sqm) 53,892 Acquisiton Price per sqm R$ 8,042 Cap Rate Sensitivity Cap Rate Sensitivity Cap Rate Sensitivity Average Rent Price (R$/sqm) Average Rent Average Rent R$ 85 R$ 90 R$ 95 R$ 100 R$ 110 R$ 19 R$ 20 R$ 21 R$ 22 R$ 23 R$ 75 R$ 80 R$ 85 R$ 90 R$ 95 Price (R$/sqm) Price (R$/sqm) Cap Rate (%) 11,6% 12,3% 13,0% 13,7% 15,0% Cap Rate (%) 10,6% 11,2% 11,7% 12,3% 12,8% Cap Rate (%) 11,2% 11,9% 12,7% 13,4% 14,2% 19

20 Potential Acquisition Opportunities High quality pipeline to support the maintenance of the consolidation strategy Fragmented Market Current Pipeline (R$ mm) 20% ~60% Potential Growth to the Current Portfolio % Investidores Privados Investidores Institucionais Office Industrial Total Main Highlights of Potential Acquisition Targets Offices Warehouses Main focus on off-market deals Focus on São Paulo and Rio de Janeiro regions Triple A assets, with best-in-class tenants Footprint development in strategically located regions close to major urban centers and main logistic corridors Assets with cutting-edge installed infrastructure to support growth and reduce competition Focus on established clusters in order to attract blue chip clients and leverage on cost sharing 20

21 5 Capital Structure

22 Strong Liquidity Position Cash and Cash Equivalents Portfolio Value Q Q17 Indebtedness 3Q17 Debt Breakdown Índex CDI + Average Coupon 0.74% Balance (R$MM) 1, TR % IGP-M % Q17 Gross Indebtedness Net Indebtedness IPCA %

23 Conservative Balance Sheet Conservative Capital Structure Loan-to-Value Covenant-Light Balance Sheet 52% 54% 53% 46% 45% 44% 44% 45% 46% 39% 40% 41% 42% 40% 41% 38% 34% 34% 36% 37% 37% 39% 34% 33% 30% 29% 29% 29% 57% 43% 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 LTV Gross Debt LTV Net Debt Covenant Debt Non Covenant Debt 3Q17 Debt Profile Perpetual Bond 16% 19% Balance (US$) Coupon (US$) $ 185,000,000 9% Hedge Strategy Swap to CDI 17% Start Date 07/07/ % End Date 09/04/ % Cost (R$) 95.95% of CDI TR CDI USD Perpetual Bond IGPM IPCA Exchange Rate

24 Indebtedness Debt Amortization Schedule (R$ million) ¹ Net Debt / EBITDA * ,1x ,1x 5,2x 5,4x 6,1x 6,2x 6,3x 4,4x 4,8x 5,0x 5,6x 6,5x 7,3x 6,9x 24 4Q * Perpetual Bond 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Interest Coverage Ratio ² Other Indicators 1,6x 1,6x 1,5x 1,4x 1,3x 1,4x 1,2x 1,3x 1,4x 1,3x 1,4x 1,4x 1,3x 1,4x Indicators Non-Secured/ Total Debt 36% 50% % 3Q17 31% Credit Rating Local AA- / braa Aa2 AA- / bra Aa2 A+ / bra - Aa2 A / bra+ Aa2 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Credit Rating Global BB / BB / Ba2 BB- / BB / Ba2 BB- / BB- / Ba2 BB- / BB- / Ba2 1 Considering the expiration of the Perpetual Bond in Considering Adjusted Financial Results and Adjusted EBITDA (Last 12 months) 24

25 Capital Markets Stock Performance / Liquidity Shareholder Distribution 90% 70% 50% 30% 10% -10% ADTV BR Properties Ibovespa 7% -30% Dec-15 Mar-16 May-16 Jul-16 Aug-16 Oct-16 Dec-16 Mar-17 May-17 Jul-17 Sep % 3% 6% 84% Brazil United States Luxembourg Canada Other Sell-side Coverage Stock Indexes Financial Institution Analyst Contact Itaú BBA Enrico Trotta enrico.trotta@itaubba.com BofA Merrill Lynch Daniel Gasparete daniel.gasparete@baml.com JP Morgan Marcelo Motta marcelo.motta@jpmorgan.com Citibank Dan McGoey dan.mcgoey@citi.com Bradesco Luiz Mauricio Garcia lmgarcia@bradescobbi.com.br Santander Bruno Mendonça brmendoca@santander.com.br Credit Suisse Nicole Hirakawa nicole.hirakawa@credit-suisse.com Index Weight BRPR IBrX 0,10% IBrA 0,09% SMLL 0,89% IMOB 4,45% IGCX 0,14% IGCT 0,11% IGC-NM 0,21% ITAG 0,12% IDIV 0,49% 25

26 6 Sustainability

Sustainability BR Properties seeks to reduce the environmental

to its own properties through certifications from LEED -

CONSTRUCTION (CORE & SHELL) Certification About LEED Ventura:

Silver Panamérica Green Park: Silver Águas Claras: Silver

and Environmental Design, is changing the way we think about

Leaders from more than 160 countries using the certification,

27 Sustainability BR Properties seeks to reduce the environmental impact and operating costs of its constructions, adding value to its own properties through certifications from LEED - Leadership in Energy & Environmental Design LEED NEW CONSTRUCTION (CORE & SHELL) Certification About LEED Ventura: Gold Passeio Corporate: Gold JK Bloco B: Gold Manchete : Silver Panamérica Green Park: Silver Águas Claras: Silver Souza Aranha II: Certificated LEED, or Leadership in Energy and Environmental Design, is changing the way we think about buildings and communities are designed, built and operated. Leaders from more than 160 countries using the certification, made LEED is the main platform used for green buildings, with over 170,000 m² certificates daily. 27

28 7 Portfolio

29 Portfolio Office - São Paulo Alphaville Region: Alphaville GLA: 9,292 sqm Chucri Zaidan Region: Marginal GLA: 21,906 sqm JK Complex Tower B Region: Jardins GLA: 29,539 sqm CBOP - Jacarandá Region: Alphaville GLA: 31,954 sqm Paulista Region: Paulista GLA: 22,855 sqm TNU Region: Marginal GLA: 27,931 sqm Centenário Plaza Complex Region: Marginal GLA: 53,892 sqm 29

30 Portfolio Office - São Paulo São Pedro Region: Marginal / Chácara Sto. Antonio GLA: 3,575 sqm Santo Antonio Region: Marginal / Chácara Sto. Antonio GLA: 5,017 sqm São José Region: Marginal / Chácara Sto. Antonio GLA: 5,080 sqm Souza Aranha Region: Marginal / Chácara Sto. Antonio GLA: 2,329 sqm Alexandre Dumas Region: Marginal / Chácara Sto. Antonio GLA: 6,889 sqm Ed. Comercial Indaiatuba Region: Indaiatuba, São Paulo GLA: 11,335 sqm 30

31 Portfolio Office - São Paulo Panamérica Park Region: Marginal GLA: 18,667 sqm Barra Funda Region: Other GLA: 11,384 sqm Panamérica Green Park I Region: Marginal GLA: 4,583 sqm Souza Aranha II Region: Marginal / Chácara Sto. Antonio GLA: 2,019 sqm Celebration Region: Jardins GLA: 5,590 sqm 31

32 Portfolio Office - Rio de Janeiro Ventura Towers Region: Downtown GLA: 88,563 sqm Manchete Region: Flamengo GLA: 23,591 sqm Bolsa do Rio de Janeiro Region: Downtown GLA: 3,224 sqm Passeio Corporate Region: Downtown GLA: 81,423 sqm Glória Region: Downtown GLA: 8,436 sqm Icomap Region: Downtown GLA: 9,164 sqm Ouvidor 107 Region: Downtown GLA: 6,284 sqm 32

33 Portfolio Office - Rio de Janeiro Barra da Tijuca Region: Barra da Tijuca GLA: 23,210 sqm RB 115 Region: Downtown GLA: 11,516 sqm Vargas Region: Downtown GLA: 14,809 sqm 33

34 Portfolio Office - Other Regions Águas Claras Region: Nova Lima, MG GLA: 8,932 sqm Brasília Region: Brasília, DF GLA: 15,501 sqm Porto Alegre Region: Porto Alegre, RS GLA: 4,421 sqm 34

35 Portfolio Industrial Galpão Imbuia Region: Jarinu, SP GLA: 22,986 sqm 35

Selective Developments & Expansions 1 development project and 5 land banks,

7 thousand sqm of GLA Galpão Araucária Galpão Pirituba Panamérica Green Park

Owned GLA: 14,388 sqm Stake: 100% Type: Industrial / Land bank Location: São

A / Land bank Location: São Paulo / SP Delivery Date: n/a Owned GLA: 9,318

Location: Rio de Janeiro / RJ Data de Entrega: n/a Owned GLA: 10,000 sqm

36 Selective Developments & Expansions 1 development project and 5 land banks, which once finalized, will correspond to 88.7 thousand sqm of GLA Galpão Araucária Galpão Pirituba Panamérica Green Park Type: Industrial / Development Location: Jarinu / SP Delivery Date: 3Q18 Owned GLA: 14,388 sqm Stake: 100% Type: Industrial / Land bank Location: São Paulo / SP Delivery Date: n/a Owned GLA: 32,987 sqm Stake: 100% Type: Office A / Land bank Location: São Paulo / SP Delivery Date: n/a Owned GLA: 9,318 sqm Phase 2 & 3 Stake: 50% CES II Bayview Type: Office AAA / Land bank Location: Rio de Janeiro / RJ Data de Entrega: n/a Owned GLA: 10,000 sqm Stake: 100% Type: Office AAA / Land bank Location: Rio de Janeiro / RJ Data de Entrega: n/a Owned GLA: 21,989 sqm Stake: 100% 36

37 8 Appendix

38 Financial Highlights vs Real Estate Cycle Net Revenues (R$ million) M17 Adjusted EBITDA (R$ million) M17 Adjusted Net Income - FFO (R$ million) M17 38

39 Income Statement Account Income Statement 3Q17 3Q16 var % 9M17 9M16 var % (1) Gross Revenues % % (2) Leasing % % (3) Office % % (4) Industrial % % (5) Retail n/a n/a (6) Services Rendered % % (7) Deductions from Gross Revenues (18.273) (10.282) 78% (41.782) (29.262) 43% (8) Taxes (PIS/Cofins and ISS) (10.151) (9.047) 12% (27.486) (26.693) 3% (9) Deductions (8.122) (1.235) 558% (14.296) (2.569) 456% (10) Net Revenues % % (11) Cost of Leased Properties - - n/a - - n/a (12) Gross Profit % % (13) General and Administrative Expenses (29.826) (26.328) 13% ( ) (79.067) 50% (14) Operating Expenses (8.102) (5.436) 49% (28.645) (19.418) 48% (15) Taxes 837 (3.088) -127% (29.262) (11.244) 160% (16) Personnel Expenses (6.839) (4.780) 43% (17.824) (13.828) 29% (17) Management Fees (1.171) (3.002) -61% (4.033) (8.179) -51% (18) Stock Options / LTIP (2.283) (472) 384% (6.849) (1.307) 424% (19) Vacancy Expenses (12.268) (9.551) 28% (31.824) (25.092) 27% (20) Financial Result (29.496) (74.836) -61% ( ) ( ) 26% (21) Financial Income % % (22) Financial Expenses (83.331) (98.183) -15% ( ) ( ) -20% (23) Other Operating Income/Expense - (6.467) n/a % (24) Gain (Loss) on Sale of Investment Properties (2.900) - n/a % (25) Gain (Loss) on Appraisal of Investment Properties n/a - (43.493) n/a (26) Income (loss) before taxes % % (27) Income and Social Contribution taxes (3.580) (4.322) -17% (11.394) (30.180) -62% (28) Deferred taxes (27.460) (19.577) 40% (23.639) -259% (29) Income (loss) before Minoritary Interest % % (30) Minority Interest - - n/a - (1.733) n/a (31) Net Income (loss) % % 39

40 EBITDA & FFO Account Adjusted EBITDA Composition 3Q17 3Q16 var % 9M17 9M16 var % (29) Net Income (loss) before Minority Interest % % (30) (-) Minority Interest - - n/a - (1.733) n/a (28) (+) Deferred Taxes % (37.482) % (27) (+) Income and Social Contribution Taxes % % (25) (-) Gain (Loss) on Appraisal of Investment Properties - (35.893) n/a n/a (24) (-) Gain (Loss) on Sale of Investment Properties n/a (62.523) (5.348) 1069% (23) (+) Other Operating Income n/a (18.269) (9.075) 101% (20) (+) Financial Result % % (18) (+) Stock Options / LTIP % % (16) (+) Bonus Provision * n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Property Sales (Galpão SBC ) - - n/a n/a (15) (+) Taxes on One Properties Incorporation (ITBI) - - n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Non-cash Gains on the Perpetual s Buyback - - n/a n/a (14) (+) Depreciation % % (14) (+) Attorney's Fees (Non-Recurring) - - n/a n/a (14) (+) Notarial Fees - Follow-on (Non-Recurring) n/a n/a (32) Adjusted EBITDA % % (33) Adjusted EBITDA Margin 76% 78% -2 p.p. 78% 80% -2 p.p. * From 2017 onwards, the adjustment of the "Bonus Provision" is not being considered in the Adjusted EBITDA calculation Account Adjusted Net Income Composition (FFO) 3Q17 3Q16 var % 9M17 9M16 var % (31) Net Income (loss) % % (28) (+) Deferred Taxes % (37.482) % (27) (+) Income Taxes on Property Sales - - n/a % (25) (-) Gain (Loss) on Appraisal of Investment Properties - (35.893) n/a n/a (24) (-) Gain (Loss) on Sale of Investment Properties n/a (62.523) (5.348) 1069% (23) (+) Other Operating Income/Expense (Non-Recurring) n/a (18.269) % (20) (+) Non-cash Losses on Exchange Rate Variation (9.070) - n/a - - n/a (20) (-) Non-cash Gains on Exchange Rate Variation (16.851) % (16.851) ( ) -86% (20) (+) Non-cash Variations (MTM - Perpetual Bond Swap and Interest) 937 (1.157) -181% (7.045) (2.352) 200% (20) (-) Monetary Adjustment on "Galpão SBC " Sale - - n/a (49.503) - n/a (20) (-) Non-cash Gains on the Perpetual s Buyback - - n/a - (55.726) n/a (20) (+) Debt Renegotiation Results (Waiver) - - n/a n/a (18) (+) Stock Options / LTIP % % (15) (+) PIS/Cofins (Revenue Taxes) on Property Sales (Galpão SBC ) - - n/a n/a (15) (+) Taxes on One Properties Incorporation (ITBI) - - n/a n/a (15) (+) PIS/Cofins (Revenue Taxes) on Non-cash Gains on the Perpetual s Buyback - - n/a n/a (14) (+) Attorney's Fees (Non-Recurring) - - n/a n/a (14) (+) Depreciation n/a n/a (14) (+) Notarial Fees - Follow-on (Non-Recurring) n/a n/a (34) Adjusted Net Income (FFO) % % (35) Adjusted Net Income Margin (FFO Margin) 21% 12% 9 p.p. 20% 16% 4 p.p. 40

41 Investor Relations IR Team André Bergstein CFO and Investor Relations Officer Gabriel Barcelos Investor Relations Manager Nelson Brazan Investor Relations Analyst Phone: (55 11) Ticker: BRPR3 41

Company Presentation

Company Presentation 1 Overview Quick Facts 0.2% Delinquency Rate R$ 7.7 Billion Porfolio Value 11.1 years Debt Duration¹ 29% Loan-to-Value² 100% Inflation-linked Leases 46 Properties 4.9 years Average