2. BRProperties 3Q10
Highlights
2
Financial
Highlights
Operating
Highlights
With the acquisition of 41% of Ventura Corporate Towers II, we completed 84% of the acquisition
goal proposed in the capital budget after the Company’s IPO and a record R$ 1.5 billion in 2010
At the end of 3Q10, our portfolio had 1,014,636 sqm of gross leasable area (GLA), a 139%
increase compared to the same period of last year
The Company concluded a perpetual bond issuance, in the amount of US$ 200 million, offered to
qualified institutional investors. The bond has a call option at par after the 5th year, and will pay 9%
interest a year. The bond proceeds will be mainly utilized for new acquisitions
During 3Q10, we raised approximately R$ 238 million in real estate long term financing linked to
TR; this type of credit represents 78% of the total Company debt, excluding the perpetual bond
proceeds
In 3Q10, our property management revenues increased 72% over 3Q09
3Q10 gross revenues increased 91% compared to 3Q09, totaling R$ 58.5 million
Adjusted EBITDA, excluding stock option plan expenses and bonus provision, of R$ 45.4 million at
the end of 3Q10, an increase of 101% over 3Q09
In 3Q10 and 9M10, we estimated a pro-forma adjusted EBITDA of R$ 49.0 million and R$ 162.4
million, with 85% and 88% margin, respectively. Excluding vacancy expenses, the margins would
rise to 93% and 92% in 3Q10 and 9M10, respectively
Net income of R$ 10.4 million, a 67% increase over 3Q09 and consolidated FFO of R$ 17.9 million
with a 33% FFO margin
3. BRProperties 3Q10
Recent Acquisitions
3
In August 2010, we acquired - together with Banco BTG
Pactual - 82% of one of the towers which make up the
Ventura Corporate Towers, a Triple A office complex, for R$
680 million
The acquisition was done through the real estate
investment fund Ventura II-A Fundo de Investimento
Imobiliário-FII, which will be managed by BR Properties
It is the best and largest office building in Rio de Janeiro,
located in the downtown region of the city, one of the
highest valued corporate regions in the country, with ample
access to public transportation and close to the city’s major
airport.
With the acquisition, BR Properties portfolio reached over
1 million sqm of GLA, of which approximately 108 thousand
sqm is located in the downtown region of Rio de Janeiro.
Ventura Corporate Towers II
Type: Office AAA
GLA: 21,493 sqm
% Owned: 41%
Floors: 17
Capex: R$ 340 MM
5. BRProperties 3Q10
BR Properties has already invested R$ 1.2 billion, or 84%, of the total acquisition value outlined in the
capital budget after IPO
It is also important to mention that we are currently 25% above the acquisition goal established for 2010
Acquisitions
Acquisition CAPEX Schedule Post IPO Post IPO Acquisitions
5
1.212
mar/10 apr/10 may/10 jun/10 jul/10 aug/10 sep/10 oct/10 nov/10 dec/10
Capital Budget
Actual
1.452
968
1.212
mar/10 apr/10 may/10 jun/10 jul/10 aug/10 sep/10
Capital Budget
Actual
+25%
6. BRProperties 3Q10
Our financial vacancy was 12.3% in the period; Excluding CBOP - Jacarandá, Torre Nações Unidas, and Ventura
Towers II, our financial vacancy would drop to 1.8%
Operating Highlights
Vacancy Breakdown
Jacarandá Building: paid only 18% of the total acquisition value as a down payment, it is currently 55%
leased and under lease up process of its vacant areas, at the responsibility of the seller
TNU: in the final stage of its retrofit process, it is 55% leased, and we expect an upside in the rental price per
sqm in the leasing of the reminiscent area
Ventura II: acquired in August 2010, it is currently 50% leased to BNDES and British Gas
Vacancy per Property
6
4,7%
3,0%
2,8%
0,9%
0,5%
0,2% 0,2% 0,0%
Ventura
Castelo Branco Office Park
TNU
Piraporinha
DP Louveira 9
Plaza Centenário
Raja Hills
Number One
6,6%
5,2%
1,8%
10,4%
12,3%
1,8%
2Q10 3Q10 3Q10 Ex CBOP, TNU &
Ventura
Physical
Financial
12. BRProperties 3Q10
Debt
Debt Amortization Schedule
Net Debt 3Q10 Debt Index Breakdown 3Q10
12
362
1.429
890
93
974 539
ST Debt Obligations
for
Acquisitions
LT Debt Total Debt Cash Net Debt
245.152
70.394
88.875 84.998
109.550 108.015
120.282
266.214
86.263
77.732
44.756
22.684
10.591
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
*
* includesdebt short term debt, which will be fully paid, utilizing the Company’s cash, by the end of 2010
78%
3%
20%
TR
IGPM
CDI
13. BRProperties 3Q10
Perpetual Bond
13
In October 2010, the Company concluded a perpetual bond issuance, in the amount of US$ 200 million, offered to
qualified institutional investors. The bond has a call option at par after the 5th year, and will pay 9% interest per year.
Swap Operation
We signed contracts of foreign exchange hedge to mitigate our exposure to currency fluctuations,
hedging the coupon to be paid for 5 years at local currency, linked to CDI fluctuations.
Given that only the coupon will be hedged, potential volatility in the debt principal could emerge in real
(R$) terms. The net effect on the Company’s cash flow, however, will be zero, since the bond has no
maturity date.
Bond BRProperties Bank
USD
USD 115,64% CDI
> Maintain Company's strong growth > Lengthen Company's amortization schedule
> Raise capital at lower costs than in the local market > Reduce the long-term average cost of debt
> Alternative to real estate dedicated loans for long-term financing
Objectives
14. BRProperties 3Q10
Stock Performance
14
GP Investments
14%
Laugar S.A.
5%
Silverpeak
4%
Free Float
77%
* As of November 9th, 2010
Number of shares: 139,403,585
Market Value: R$ 2.4 billion
Average Daily Vol. (30d): R$ 11.1 million
33,46%
4,53%
-20%
-10%
0%
10%
20%
30%
mar-10 abr-10 mai-10 jun-10 jul-10 ago-10 set-10 out-10 nov-10
BRPR3
Ibovespa
BR Properties current ownership structure is highly fragmented, with no controlling shareholder, no shareholders
agreement, and over 77% of its shares in free float
15. BRProperties 3Q10
Glossary
EBITDA (Earnings Before Income, Tax, Depreciation and Amortization): a non accounting measure which
measures the Company’s capacity to generate operational revenues, without considering its capital structure.
Measured by excluding the operational expenses from Gross Profit and adding back the depreciation and amortization
expenses for the period
(Gross Profit – General and Administrative Expenses + Depreciation + Amortization)
Adjusted EBITDA: adjustments made to EBITDA by excluding R$ 0.2 million from expenses regarding the Company
stock option plan, along with R$ 1.1 million in employee bonus provisions
FFO (Funds From Operations): non accounting measure, which adds back depreciation to net income in order to
determine, utilizing the income statement, the net cash generated in the period
(Net Income + Depreciation)
Leasing spread: real gain (net of inflation) from the renegotiation of existing leases, and new leases of vacant areas
when compared to the previous in-place rent
Vacancy - Financial: estimated by multiplying the average rent per sqm which could be charged in the buildings and
their respective vacant areas, and then dividing this result by the potential gross revenues of each property. Indicates
the percentage of potential revenue which is lost each month due to vacancy
Vacancy - Physical: estimated by dividing the total vacant area by the total GLA of the portfolio
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