2. BRProperties 1Q10
Highlights
- 2 -
Financial
Highlights
Operational
Highlights
Finalized the acquisition of seven remaining properties from 2009: DP Araucária, five warehouses
at Brazilian Business Park, and Nações Unidas Tower, for the amount of R$ 322 million
The number of properties managed by the Company increased from 23 in 1Q09 to 27 in 1Q10
Our revenues from services rendered grew by 98% in 1Q10 compared to 1Q09
Real growth of 5.4% in value of new leases/renegotiations in the 1° Quarter of 2010
Gross Revenues increased by 52% compared to 1Q09
Adjusted EBITDA, excluding stock option plan expenses and bonus provision, of R$ 35.5 million at
the end of 1Q10, an increase of 53% compared to 1Q09
Pro-forma EBITDA of R$46.8 million in 1Q10, with an EBITDA Margin of 88%
Net Profit of R$11.8 million, an increase of 68% over 1Q09
Recent
Events
In April, we acquired the office building “Ed. Jacarandá”, with approximately 32,000 sqm of GLA for
R$180.0 million. The building was recently developed, and is already leased to Philips and
Redecard.
Also in April, we acquired another 4 industrial warehouses in Louveira/SP for R$181.0 million.
These warehouses reinforce the Company’s presence in the region, where we own over 250,000
sqm of GLA.
At the moment, we have already acquired 25% of the acquisitions outlined in the capital budget
3. BRProperties 1Q10
Recent Acquisitions
- 3 -
On January 22nd, 2010, we acquired “DP Araucária”, a distribution park
located in the city of Araucária/PR, for the amount of R$69.9 million
Property Overview:
GLA: 42,697 sq m
% Acquired: 100%
# Warehouses: 1
100% leased
On February 26th, 2010, we concluded the
acquisition of “Brazilian Business Park” for R$101.2
million
Property Overview:
GLA: 59,182 sq m
% Acquired: 100%
# Warehouses: 5
100% leased
On March 16th, 2010, we acquired the office building “Torre Nações
Unidas”, located in the Marginal do Rio Pinheiros region for R$151.2
million
Property Overview:
GLA: 25,555 sq m
% Acquired: 100%
# Floors: 18
Under retrofit, currently 50% leased
Brazilian Business Park
DP Araucária
TNU
4. BRProperties 1Q10
Recent Acquisitions
- 4 -
On April 12th, 2010, we acquired for the amount of the
R$180.0 million, the office building “Edifício Jacarandá”,
located in the Castelo Branco Office Park.
Property Overview:
GLA: 31,954 sq m
% Acquired: 100%
# Floors: 14
Recently developed – 50% leased to Philips and Redecard
On April 20th, 2010, we concluded the
acquisition of 4 logistics warehouses
located in the “DP Araucária” complex,
where BR Properties already owns 2
other warehouses. The acquisition value
was of R$181.0 million.
Property Overview:
GLA: 106,306 sq m
% Acquired: 100%
# Warehouses: 4
100% leased
CBOP – Ed. Jacarandá
DP Louveira 3, 4, 5 & 6
5. BRProperties 1Q10
Portfolio
- 5 -
Portfolio Growth (GLA sq m)
Portfolio Breakdown (% market value) Portfolio Breakdown (% GLA)
51%
46%
4%
Office Industrial Development
25%
75%
Office Industrial
646.055
730.558
868.807
59.182
(235)
25.555
31.954
106.306
Portfolio at
IPO
Acquisition of
BBP
Sale of
Isabela (cj.
41)
Acquisition of
TNU
1T10 Acquisition of
Ed. Jacarandá
Acquisition of
DP Louveira
3-6
Current
Portfolio
6. BRProperties 1Q10
Case Study
- 6 -
ROE*: 147%
Sale Value Addition
Henrique Schaumann
Acquisition Value R$ 41.0 mm
Acquisition Date Nov/07
Re-tenanting R$ 6.5 mm / year (42%
increase on rental income)
Retrofit Elevators/ Façade/Parking
2009 Appraised Value R$ 78.0 mm
Ed. Generali
Acquisition Value R$ 16.6 mm
Acquisition Date Aug/07
Sale Value R$ 21.5 mm
Sale Date Jan/10
Holding Period 29 months
IRR 36%
* Before taxes
41,0
78,0
26,97
38,10
-
5,00
10,00
15,00
20,00
25,00
30,00
35,00
40,00
45,00
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
At Acquisition Current
Property Value
Lease/sq m
16,6
21,5
Acquisiton Value Sale Value
7. BRProperties 1Q10- 7 -
Financial Vacancy of 8,3% in 1Q10; Excluding the TNU building, acquired in march, our
financial vacancy was 4.1%
Operational Highlights
Vacancy Breakdown
7,3%
6,0%
4,7%
6,9%
8,3%
4,1%
2009 1Q10 1Q10 Ex - TNU
Physical
Financial
Despite the recent increase in the vacancy rate, the prospect of leasing the vacant areas
is very positive given the forecast economic growth
We expect our vacancy rate to return to its historic low levels in the short term
8. BRProperties 1Q10- 8 -
In the quarter, we renegotiated
existing leases and signed new
leases in vacant areas with an
average real gain of 5.4%
32%
34%
16%
10%
8%
2010 2011 2012 2013 >2013
21%
40%
25%
13%
1%
2010 2011 2012 2013 >2013
69%
28%
3%
1Q09
IGP-M
IPCA
Outros
81%
15%
5%
1Q10
Lease Contract Readjustment Indices
Lease Contract Expiration Schedule
(# of contracts)
Lease Contract 3 Year Renegotiation Schedule
(# of contracts)
Operational Highlights
9. BRProperties 1Q10- 9 -
Operational Highlights
Addition of three new properties under our management, which is performed by our
subsidiary, BRPR A Administradora de Ativos Imobiliários Ltda.
Managed Properties BRPR A Revenues
23
27
1Q09 1Q10
428
849
1Q09 1Q10
10. BRProperties 1Q10- 10 -
Financial Highlights
Net Revenues Adjusted EBITDA
Net Income FFO
27.281
41.600
52.874
1Q09 1Q10 1Q10 Pro Forma
52%
27%
23.210
35.479
46.753
1Q09 1Q10 1Q10 Pro Forma
53%
32%
85% 85% 88%
Adjusted EBITDA Margin
11.137
16.637
1Q09 1Q10
49%
7.016
11.759
1Q09 1Q10
26%
28%
Net Margin
68%
11. BRProperties 1Q10
Pro-Forma Estimates
Additional Pro-forma Gross Revenues
(non audited)
Adjusted EBITDA
(non audited)
- 11 -
Methodology
Considers that the Company’s current revenues
were incurred from January 1st 2010, until March
31st 2010
Results
Our pro forma gross revenues totaled R$58.6
million, 27% above 1Q10
Our adjusted EBITDA pro-forma margin was 88%,
3% above the 85% margin attained in the period
46.198
58.621
500
2.923 1.312
2.592
5.096
1Q10
Actual
DP
Araucária
BBP TNU CBOP Louveira 1Q10 Pro-
forma
27%
35.479
46.753
85%
88%
80%
81%
82%
83%
84%
85%
86%
87%
88%
89%
90%
25.000
30.000
35.000
40.000
45.000
50.000
55.000
1Q10 Actual 1Q10 Pro-forma
Adjusted EBITDA Margin
12. BRProperties 1Q10- 12 -
Financial Highlights
Expected Positive Effects of the Growth
of Inflation Indexes
(TR vs. Inflation)
Effects of the Nominal
Interest Rate Increase
(SELIC vs. TR)
8,75%
12,00%
0,82% 0,97%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
2009 2010e
Forecast SELIC
TR
The potential increase in the nominal interest rate until the end of the year would result in a small
increase in the TR, main index that readjusts or 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
0,00%
7,95%
0,82% 0,97%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
2009 2010e
Basket of lease contract
inflation readjustment
indices
TR
13. BRProperties 1Q10
Debt
42.008 48.312
63.496 56.650
77.812 72.846 81.006
221.818
37.904
24.025
2.738 1.027
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Net Debt 90
Cash 698
Debt Amortization Schedule
Short Term Debt 92
Obligations for Acquisitions 58
Long Term Debt 637
Total Debt 788
Shareholders Equity 1.664
Balance Sheet 1Q10
90,1%
5,1%
4,8%
TR
IGPM
CDI
Debt Breakdown
- 13 -
Comfortable amortization schedule in the next few years, with low refinancing risk
14. BRProperties 1Q10
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$ 1.2 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)
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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