2. Company Overview
The largest and most complete commercial property company in Brazil
Segments of Activity
OfficeIndustrialRetail
Portfolio of Retail Properties
Torre Nações Unidas
DP Louveira
Ed. Ventura II Ed. Manchete
DP Araucária
Company Profile
2
Largest public commercial property company
in Brazil
Diversified portfolio (53% office, 33% warehouse, 8%
retail, 6% development) currently holds 93 properties,
with 1.17 million m² of gross leasable area (GLA) and
estimated market value of approximately R$5.1 billion
Diversified tenant base
Regional footprint
5 greenfield projects, with approximately 178
thousand m² of GLA
Fully integrated and experienced in-house teams:
acquisitions, financing, legal and engineering
Pro active, value added investment strategy, “hands-
on” approach
Market recognition: proven ability to source deals and
execute transactions makes BR Properties the partner
of choice for co-development and built-to-suit
operations
Fully owned Property Management Company
3. Promised and Delivered
3
Commitment to over-delivering results to its shareholders
IPO
(March 2010)
Current
(December 2011)
Growth
(Current / IPO)
613,499 1,166,389 1.9x
150,473 178,434 1.2x
7.4% 0.9% Reduction of 88%
93.9
(2009)
339.7
(3Q11 Annualized)
3.6x
45.0
(2009)
169.9
(3Q11 Annualized)
3.8x
Portfolio GLA
(m²)
Under Development
GLA
(m²)
Physical Vacancy
Adjusted EBITDA
(R$ mm)
Adjusted FFO
(R$ mm)
83.3%
(2009)
92.5%
(3Q11 Annualized)
Most Profitable Player in the
Sector
EBITDA Margin
1,719
(2009)
5,129 3.0x
Total Portfolio
(R$ mm)
4. Highest Growth in the Sector…
Impressive growth rate, much higher than the average of its comparables…
GLA CAGR 2008 - 2010 Net Revenues CAGR 2008 - 2010
FFO CAGR 2008 - 2010 EBITDA CAGR 2008 – 2010
4
¹
¹
¹
¹
2
2
2
Source: Companies
Notes:
1 Considers BR Malls, Multiplan, Iguatemi and Alliansce
2 Considers São Carlos and CCP
53.6%
24.8%
7.9%
Shopping Malls' Average Properties' Average
64.4%
9.8%
-4.3%
Shopping Malls' Average Properties' Average
156.3%
50.7%
28.9%
Shopping Malls' Average Properties' Average
65.4%
29.4%
8.7%
Shopping Malls' Average Properties' Average
2
5. Ample market fragmentation and little professional competition create a unique environment for
market consolidation
Significant Opportunities to Expand Current Portfolio
Addressable Market1: 36.3 mm m²
BRProperties
10 Organized
Companies
Source: BR Properties Estimates
Note:
1 Does not include retail properties
Organized
Companies
9%
Non-Organized
Market
91%
35%
65%
Fragmented Industry (in terms of GLA – m²) Acquisition Pipeline - In Negotiation (R$ mm)
5
4.842
9.454
3.220
762
450
180
Current
Existing
Portfolio
Office Build-to-Suit Retail Industrial Total
7. BR Properties tenant base entails some of the best known Companies
in the country, spanning wide industry diversification
A top-notch portfolio comprised of office buildings, industrial, and retail properties located in the
most dynamic regions of Brazil
Portfolio: Breakdown and Tenant Base
Market Value of the Portfolio
(R$ mm)
GLA by Property Type
(m²)
Tenant Breakdown
(by Industry)
Main Tenants
Over 180 high
quality tenants
7
Total: R$5.1 bn Total: 1,344 k m²
Logistics
20%
Consumer
Goods
19%
Financial
Services
13%
Industry
10%
Technology
7%
Others
26%
Energy
5%
53%
33%
8%
6%
Office
Warehouse
Retail
Greenfield
22%
57%
8%
13%
Office
Warehouse
Retail
Greenfield
8. Portfolio Footprint
Office
Warehouse
BRPR
Retail
Number of existing properties: 88
— Office: 34
— Warehouse: 25
— Retail: 29
Total GLA of the properties: 1,166,389 m²
— Office: 298,411 m²
— Warehouse: 767,093 m²
— Retail: 100,885 m²
States Total GLA %
São Paulo 890,913 76.4%
Rio de Janeiro 154,385 13.2%
Paraná 63,120 5.4%
Minas Gerais 18,998 1.6%
Bahia 7,607 0.7%
Pernambuco 6,238 0.5%
Alagoas 4,678 0.4%
Maranhão 4,663 0.4%
Espírito Santo 3,989 0.3%
Pará 3,418 0.3%
Distrito Federal 2,989 0.3%
Goiás 2,814 0.2%
Ceará 2,577 0.2%
TOTAL 1,166,389 100%
BR Properties’ portfolio is present in 13 states, covering all 5 regions of Brazil
8
9. Average office lease term: 3-5 years
Average warehouse lease term: 5-10 years
Expiration Schedule
(% revenues)
Market Alignment Schedule
(% revenues)
Inflation Adjustment Indices
Portfolio: 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
9
Annual Inflation Adjustments
— 100% of lease contracts are indexed to inflation
— 72% IGP-M, 24% IPCA and 3% other
Triple Net Contracts
— Tenant is responsible for all operating property costs
— Costs include: taxes, insurance, and maintenance
expenses
Next 3 Years
— 74% market alignment
— 32% expiration
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
Main Characteristics
2011 2012 2013 >2013
3%
5% 20%
73%
2011 2012 2013 >2013
28%
14%
27%
31%
73%
24%
3%
IGP-M
IPCA
Other
10. Effects of the Nominal Interest Rate Increase
(SELIC vs. TR)
Source: Santander research and Central Bank
Portfolio: Resilient Business Dynamics
Positive Effects of the Growth of Inflation Indices
(TR vs. IPCA vs. BRPR Inflation basket)
Variations in the nominal interest rate do not exert a
significant impact on the Referential Rate (TR), main index
that readjusts our financing contracts, which results in an
overall cost of debt that is nearly fixed
Inflation increases, 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)
10
Main Highlights
11,00%
9,50%
1,21%
0,91%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
2011 2012e
Forecast SELIC
TR
1,21%
0,91%
6,50%
5,50%
5,27%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
2011 2012e
TR
IPCA (CPI)
Avg. Basket
Inflation pass
through 2011
All of our debt is pre-payable at par, and can be refinanced
in a scenario of decreasing interest rates
12. Acquired Properties
Total CAPEX
(R$ billion)
103
3.4
Equity Raised
(R$ billion)
2.3
Growth Drivers: Acquisitions
GLA Growth (‘000 m²) 2
Average IRR on
Divestments (%)¹
28%
Notes:
1 Considers all the divestments since Company’s inception, and it is gross and leveraged
2 Does not consider greenfield projects
Since 2007, BR Properties acquired stakes in 103 different properties with a total CAPEX of R$3.4
billion
12
Market Value of Current
Portfolio
(R$ billion)
5.1
294
1.167
143
203
531
(3)
2007 2008 2009 2010 2011 Current
13. RB 115 (Delivered in Dec/2010)
Growth Drivers: Performance Improvement
13
Long-TermValueTrigger
Henrique Schaumann (Acquired in 2007) Presidente Vargas (Acquired in 2007)
+770 bps
+650 bpsCap Rate Cap Rate
Short-TermValueTrigger
Cap Rate
13.8%
Outstanding management leads to very fast operating improvements and impressive increases in
the long run
TNU (Acquired in Mar/2010)
Cap Rate
10.5%
Ventura (Acquired in Aug/2010)
Cap Rate
11.8%
10.3%
+330 bps
13.8%
+150 bps +150 bps
12.3%
Initial 3Q11 Initial 3Q11 Initial 3Q11
Initial 3Q11
11,1%
18,8%
Initial 3Q11
13,9%
20,4%
14. Growth Drivers: Performance Improvement (cont’d)
14
Leasing Spreads – New Leases
Company has been building a successful track record on increasing spreads in both contract
renegotiation and new leases
Leasing Spreads – Renegotiations
Case Study: Retail Tenant
Date of Acquisition Dec/2010
GLA 97.431 m²
Revenues @ Acquisition R$30.7 mm
Cap Rate @ Acquisition 10.2%
Current Revenues
R$41.4 mm (post-
renegotiation)
Current Cap Rate
13.4% (11 months after
acquisition)
15,5%
14,3%
12,0%11,1%
28,3%
0,0%n/a n/a n/a
1Q11 2Q11 3Q11
Office Industrial Retail
21,5%
24,5% 24,1%
22,6%
n/a n/an/a
15,7%
17,1%
1Q11 2Q11 3Q11
Office Industrial Retail
15. Growth Drivers: Developments / Retrofit
Type: Office A
Location: São Paulo / SP
Delivery Date: 4Q12
GLA: 2,019 m²
Owned: 50%
Type: Warehouse
Location: Louveira / SP
Delivery Date: 2Q12
GLA: 30,122 m²
Owned: 100%
SouzaAranha
DPLouveira7
The Company currently holds 5 greenfield projects, that once finalized, will add 178 thousand m²
of GLA to the portfolio, along with Ed. Manchete, which is now in retrofit
15
CidadeJardim
PanaméricaGreenPark
Type: Office AAA
Location: São Paulo / SP
Delivery Date: 2Q12
GLA: 6,792 m²
Owned: 50%
Pre-certified Building
Type: Office A
Location: São Paulo / SP
Delivery Date: 1Q13
GLA: 14,502 m²
Owned: 50%
Pre-certified Building
Ongoing
Ongoing
Manchete
Type: Office
Location: Rio de Janeiro / RJ
Delivered in: 4Q11
GLA: 27,658 m²
Owned: 100%
Under Approval
Retrofit - Delivered in 4Q11
Type: Warehouse
Location: São José dos Campos / SP
Delivery Date: n/a
GLA: 125,000 m²
Owned: 100%
TechParkSJC
21. Office: Total Stock – São Paulo
21
AAA
6% A
11%
Other w/ CAC*
39%
W/out CAC*
44%
15% 22%
41%
7%
23%
50% 40%
44%
40%
77%
35% 38%
15%
53%
Downtown Paulista Jardins Marginal Other
A + AAA Other w/ CAC Other w/out CAC
Quality Weight GLA m² GLA sf
AAA 6% 689.274 7.419.284
A 11% 1.263.669 13.602.020
Other w/ CAC* 39% 4.480.281 48.225.343
W/out CAC* 44% 5.054.676 54.408.080
Good Quality Properties 17% 1.952.943 21.021.303
* Central Air conditioning
Quality by Region
Source: CB Richard Ellis Brazil
São Paulo’s stock lacks good quality properties, with the highest technical specifications, despite
being one of the most important business centers in the globe
22. 22
Quality by Region
54% 60%
89%
40%
68%
80%
46% 40%
11%
60%
32%
20%
Downtown Flamengo Botafogo South Zone Barra da Tijuca Other
With CAC Without CAC
Quality Weight GLA m² GLA sf
AAA 2% 119.506 1.286.352
A 14% 836.542 9.004.463
B 13% 776.789 8.361.287
Other w/ CAC* 28% 1.673.084 18.008.926
W/out CAC* 43% 2.569.379 27.656.565
Good Quality Properties 16% 956.048 10.290.815
* Central Air conditioning
AAA
2%
A
14%
B
13%
Other w/
CAC*
28%
W/out CAC*
43%
Office: Total Stock – Rio de Janeiro
Source: CB Richard Ellis Brazil
Rio de Janeiro remains a tight market, driven by the oil and gas industry boom, scarcity of good
quality space, geographic barriers to entry and lack of adequate mass transportation
infrastructure
23. Office: Total Stock – São Paulo and Rio de Janeiro
23
Source: CB Richard Ellis Brazil
Over the last 5 years, total stock in both markets has grown at approximately the same pace
(3% annually), constrained by the lack of infrastructure
5.110.800
5.291.400
5.530.900
5.681.300
5.853.100
6.022.600
2.460.100 2.517.300 2.609.300 2.711.700 2.780.400 2.892.500
-
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
2006 2007 2008 2009 2010 3Q11
São Paulo Rio de Janeiro
24. 24
Office: Vacancy Rates – São Paulo and Rio de Janeiro
Source: CB Richard Ellis Brazil
Growing demand for quality space and restrictions in new supply have led to historically low
vacancy rates, with better quality properties presenting better performance in both bull and bear
markets
3,1% 3,1%
N/A N/A
0,8%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
2006 2007 2008 2009 2010 3Q11
São Paulo Rio de Janeiro BRPR (SP &RJ)
25. 25
Office: Average Rent/ m²/ Month - A and AAA Properties
Source: Jones Lang La Salle Brazil and Cushman & Wakefield
Average price/m² has increased since the mid 2000’s after many years of stagnant growth, which
has brought Brazilian prices closer to those of the developed world
69
77 73
84
95
75
83
90
107
120
N/A N/A
201
247
266
N/A N/A
115 117 120
N/A N/A N/A
52 57
-
50
100
150
200
250
300
2007 2008 2009 2010 3Q11
São Paulo Rio de Janeiro West End - London Midtown Manhattan BR Properties
26. Industrial: São Paulo Inland
26
Source: CB Richard Ellis Brazil
Vacancy Rates
Total Stock
The industrial market remains strong, driven by faster consumption growth and increased
demand for distribution facilities
3.377.100 3.511.000 3.724.900 3.848.300
4.120.900 4.167.300 4.290.700
4.528.600
4.817.300
-
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Stock
6,2%
0,1%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Vacancy BRPR
27. Industrial: São Paulo Inland
27
Average Asking Rents in São Paulo Inland (R$/ m²/ month)
Average Asking Rents in Other Markets (R$/ m²/ month – 2Q11)
Source: CB Richard Ellis Global and Jones Lang La Salle USA.
36
32
24
20 19
10
Tokyo London Singapore São Paulo Inland Sydney Los Angeles
Lease prices have stabilized, and are expected to remain at these levels because of the difficulties
in obtaining environmental approvals. Sluggish economic growth is not expected to affect lease
prices in the mid-term
17
19 19 20 19 19 19 20
23
-
5
10
15
20
25
3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Asking Rents
28. Fragmented Industry
28
Addressable Market1: 36.3 mm m²
BRProperties
10 Organized
Companies
Organized
Companies
9%
Non-Organized
Market
91%
35%
65%
Fragmented Industry (in terms of GLA – m²) Brazil: Owned vs Leased – Large Companies
USA: Owned vs Leased – Large Companies
The large majority of the companies in Brazil still own their real estate
In the USA, only 20% of the companies own their real estate assets
Own
Buildings
20%
Leased
80%
Own
Buildings
80%
Leased
20%
Source: Internal Estimates and Itaú Securities
Highly fragmented and non-institutionalized market creates an attractive environment for the
industry in the coming years
29. Market Highlights
29
Industry dynamics still present very attractive growth opportunities;
Infrastructure constraints will keep both office and warehouse markets tight in the mid-term;
In the short run, slower economic growth may have a slight impact in vacancy rates, leading to
stabilization of lease prices;
Players with better quality portfolio’s and below-market lease prices should be more resilient than
developers;
Lower interest rate environment with greater access to credit and urban redevelopment of existing
areas (i.e.: Porto Maravilha project in RJ) will drive the industry’s growth in the long run.
30. Contact
Investor Relations
30
Pedro Daltro
Chief Financial and Investor Relations Officer
Leonardo Fernandes
Head of Investor Relations
Marcos Haertel
Investor Relations
Phone: (55 11) 3201-1000
Email: ri@brpr.com.br
www.brpr.com.br
