Br properties 2010 earnings release presentation

2010 Earnings Release Presentation

BRProperties

BRProperties 2010

Highlights

2

Financial

Highlights

Operating

Highlights

The Company’s portfolio was appraised by CBRE, resulting in a 22% appreciation in its market

value;

With the acquisition of 100% of FII Comercial Progressivo II, BR Properties invested over $ 1.7

billion after the IPO in March, 2010, and exceeded in 18% the acquisitions target under a capital

budget approved by its shareholders for 2010. The Company invested over R$ 2.0 billion in 2010;

At the end of 2010, our portfolio had 1,159,756 sqm of gross leasable area (GLA), a 89% increase

compared to the same period of last year;

During 2010, we raised approximately R$ 864.7 million in real estate long term financing linked to

TR; this type of credit represents 73% of the total Company debt;

In October 2010, the Company concluded an additional perpetual bond issuance in the amount of

US$ 200 million, offered to qualified institutional investors. In January 2011, the perpetual bond was

re-opened, and the Company raised another US$ 85 million.

2010 gross revenues increased 78% compared to 2009, totaling R$ 223.4 million;

Adjusted EBITDA of R$ 177.5 million at the end of 2010, an increase of 89% over 2009;

In 2010, we estimated a pro-forma adjusted EBITDA of R$ 316.9 million, with a 92% EBITDA

margin;

Net income of R$ 813.4 million, a 388% increase over 2009 and consolidated FFO excluding the

portfolio appraisal effects of R$ 92.2 million with a 45% FFO margin.

BRProperties 2010

2010 Portfolio Appraisal

3

Portfolio Market Value: R$ 4.78 bi

Total portfolio appreciation of 22%

Revaluated at a yield of 9.33%

considers revenues of 2011 budget;

excludes non-operational properties

CB Richard Ellis Appraisal

Net Asset Value (NAV)

NAV: R$ 3.1 bi

NAV per share: R$ 22.14

Current Price per share: R$ 17.28

Discount of: 22%

Type2009 Portfolio &

2010 acquisitions

2010 Property

Appraisal2009 x 2010

Office 2.132.954 2.646.453 24%

Industrial 1.350.799 1.573.600 16%

Retail 335.309 402.692 20%

Development 94.275 160.900 71%

Total 3.913.337 4.783.645 22%

2009 Portfolio & 2010 acquisitions

2010 PropertyAppraisal

3.913.337

4.783.645

22%

BRProperties 2010

Portfolio Appraisal 2010

4

Office Industrial

Retail Developments

2009 Portfolio& 2010

Acquisitions

2009 Portfolio 2010Acquisitions


2.132.954

2.646.453

218.257

295.242

2009 Portfolio& 2010

Acquisitions

2009 Portfolio 2010Acquisitions


1.350.799

1.573.600

119.884

102.917

2010 Acquisitions Appreciation 2010 PropertyAppraisal

335.309

402.692 67.383

2009Developments

Appreciation 2010 PropertyAppraisal

94.275

160.900 66.625

BRProperties 2010

Recent Acquisitions

5

Type: Office AAA

GLA: 21,493 sqm

% Owned: 41%

Floors: 17

Capex: R$ 340 MM

In December 2010, we acquired a portfolio of

commercial properties, comprised of 29 retail

properties and 4 office buildings, for the total amount

of R$ 477.2 million. The portfolio holds 122,146 sqm

of gross leasable area (GLA) and is 99% leased;

The acquisition marked the Company’s entry into

the segment of street and shopping mall retail

stores, in line with its original business plan. The

retail segment is a very dynamic market, and is

another front for new acquisitions and future growth

for BR Properties;

This acquisition also marks the expansion of BR

Properties’ presence beyond the Southeastern and

Southern regions, with stores in all regions of the

country.

Ed. Santa Catarina Ed. Cetenco Portfolio C&A

Comercial Progressivo II Real Estate Investment Fund

Properties

Type

City

State

Tenants

#

Area

(sqm) % Owned

Vacancy CBRE Estimate

% per region

Portfólio C&A Retail n/a n/a C&A / other 28 98,714 100% 0% n/a

Paço do Ouvidor Retail Rio de Janeiro RJ Multi 1 2,171 51% 0% n/a

Alphaville - Araguaia Office Barueri SP C&A Corporate 1 8,084 100% 0% R$30 - R$60/sqm

Ed. Cetenco Plaza Office São Paulo SP Multi 1 7,472 23% 0% R$75 - R$110/sqm

Ed. Santa Catarina Office São Paulo SP Multi 1 4,257 27% 0% R$75 - R$110/sqm

Call Center Conexão Office São Paulo SP Conexão 1 1,448 100% 0% R$14 - R$27/sqm

33 122,146

BRProperties 2010

Acquisitions

6

BR Properties invested over $ 1.7 billion after the IPO in March, 2010, and exceeded in 18% the

acquisitions target under a capital budget approved by its shareholders for 2010;

The Company invested over R$ 2.0 billion in 2010.

After IPO Acquisitions

1.452

Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10

Budget Actual

1.709

+18%

BRProperties 2010

Recent Sales

7

Ed. Athenas

Acquisition Value R$ 27.0 MM

Acquisition Date Aug/07

Sale Value R$ 34.5 MM

Sale Date Jan/11

Holding Period 40 months

IRR 20%

ROE 70%

Ed. Isabella Plaza (units 31 and 32)



Sale Value R$ 4,20 MM

Sale Date Dec/2010


IRR 25.9%

Ed. Number One (unit 121)

Acquisition Value R$ 466,775


Sale Value R$ 650,000

Sale Date Dec/2010


IRR 33.5%

Sales

Ed. Joaquim Floriano



Sale Value R$ 22.4 MM

Sale Date Mar/11


IRR 19%

ROE 73%

4Q10

1Q11

BRProperties 2010

Portfolio

Portfolio Growth (GLA sqm)

Portfolio Breakdown

(% market value)

Portfolio Breakdown

(% GLA)

8

55% 33%

9% 3%

Office Industrial Retail Development

22%

59%

8%

11%

Office Industrial Retail Development

3Q10 Acquisition of BBP Topázio & FIIComercial Progressivo II + Saleof Ed. Isabella & Number One

4Q10

1.014.636

1.159.756 145.120

BRProperties 2010

Operating Highlights

9

Vacancy Breakdown Financial Vacancy per Segment

3Q10 2010 2010 (Ex Ventura,CBOP, TNU & RB115)

5,2%

3,8%

1,6%

12,3%

8,1%

1,5%

Physical

Financial

3Q10 2010

10,9%

6,9%

1,4% 1,2% 0,0% 0,0%

Office

Industrial

Retail

Property Type Financial Physical

CBOP - Ed. Jacarandá Office 2,6% 0,9%

Ventura Towers Office 1,8% 0,5%

TNU Office 1,2% 0,4%

RB115 Office 0,9% 0,4%

Raja Hills Office 0,2% 0,1%

Santa Catarina Office 0,1% 0,0%

Number One Office 0,0% 0,0%

Total Office 6,9% 2,3%

DP Louveira 9 Industrial 0,4% 0,7%

BP Jundiaí Industrial 0,1% 0,2%

Piraporinha Industrial 0,7% 0,6%

Total Industrial 1,2% 1,5%

Total Portfólio 8,1% 3,8%

Vacancy per Property - 2010

BRProperties 2010 10


* Leasing spreads are net of inflation

Renegotiations New Leases

4Q09 4Q10 2009 2010

-0,8%

7,6%

-0,4%

12,8% 13,7%

0,0%

3,9%

7,1%

Office

Industrial

4Q09 4Q10 2009 2010

13,7%

10,1%

1,8%

9,1%

6,8%

0,0%

-12,3%

13,6%

Office

Industrial

Leasing Spread 4Q10 4Q09 var % 2010 2009 var %

Leasing Spread (Renegotiations) - Office 7,6% -0,8% n/a 12,8% -0,4% n/a

Leasing Spread (Renegotiations) - Warehouse 0,0% 13,7% -100% 7,1% 3,9% 83%

Leasing Spread (Renegotiations) - Retail n/a n/a n/a n/a n/a n/a

Renegotiated Area - Office (sqm) 331 4.064 -92% 3.820 12.887 -70%

Renegotiated Area - Warehouse (sqm) - 8.640 -100% 17.899 13.604 32%

Renegotiated Area - Retail (sqm) - - 0% - - n/a

Leasing Spread (New Leases) - Office 10,1% 13,7% -26% 9,1% 1,8% 414%

Leasing Spread (New Leases) - Warehouse 0,0% 6,8% -100% 13,6% -12,3% n/a

Leasing Spread (New Leases) - Retail n/a n/a n/a n/a n/a n/a

New Leased Area - Office (sqm) 20.805 2.054 913% 45.760 14.638 213%

New Leased Area - Warehouse (sqm) - 7.147 -100% 26.919 17.962 50%

New Leased Area - Retail (sqm) - - 0% - - n/a

BRProperties 2010

% Revenues

% GLA

% GLA

% Revenues

Lease Contract 3 Year Market Alignment Schedule

Lease Contract Expiration Schedule

11


2011 2012 2013 >2013

5%7% 25%

63%

2011 2012 2013 >2013

5%6%

32%

57%

2011 2012 2013 >2013

54%

17%

27%

2%

2011 2012 2013 >2013

65%

20%

15%

1%

BRProperties 2010


12

Managed Properties Property Management Revenues

(R$ mil)

2009 2010

24

26

8%

2009 2010

2.078

3.698

74%

BRProperties 2010

Financial Highlights

13

Gross Revenues

Net Revenues

4Q09 4Q10 4Q10 Pro Forma 2009 2010 2010 Pro Forma

33.697 71.451 91.293

125.703

223.437

369.028

171%

194%

4Q09 4Q10 4Q10 Pro Forma

2009 2010 2010 Pro Forma

30.364 66.198 84.900

112.748

204.464

343.867

180%

205%

BRProperties 2010 14

Financial Highlights

Adjusted EBITDA

Net Income FFO

83%

87%

92%

2009 2010 2010 Pro-Forma

93.945

177.545

316.947

237%

2009 2010

44.961

92.195

105%

2009 2010

166.703

813.368

388%

BRProperties 2010

Debt

Debt Service Schedule

2010 Net Debt 2010 Debt Index Breakdown

15

73%

2%

25%

TR

IGPM

CDI

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

190 112 110 137 139 152

304

127 122

427 166

156 145 134 121 107

88

65 53

377

j - 37 p - 22

j - 26p - 14

Interest

Principal

Dívida CP Obrigações por

Aquisição

Dívida LP Dívida Total Caixa Dívida Líquida

303.109

1.927.138

1.694.682

79.615

1.544.414 232.456

BRProperties 2010

Stock Performance

16

* As of February 28th, 2011

Number of shares: 139,511,953 Market Value: R$ 2.5 billion Average Daily Vol. (30d): R$ 7.5 million

Currently, 99% of BR Properties’s shares are in free float

36,15%

-1,74%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

BRPR3

Ibovespa

GP Investments

11,5%

Wellington Management

5,8%

BlackRock5,1%

Laugar S.A.4,6%

Silverpeak2,6%

Management0,7%

Other69,6%

BRProperties 2010

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 expenses pertaining to the Company’s Stock Option

Plan, along with the respective vacancy costs from the period

FFO (Funds From Operations): non accounting measure, which excludes the effect of the gain on the appraisal of

investment properties and the corresponding impact on the income and social contribution taxes from the net income,

in order to determine, using the income statement, the net cash generated in the period

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

Stabilized Properties: properties acquired in 2009, plus properties acquired in 2010, before the IPO

17

BRProperties 2010

IR Contacts

Investor Relations

Pedro Daltro

CFO & Investor Relations Officer

Leonardo Fernandes

Investor Relations Manager

Marcos Haertel

Investor Relations Analyst

Phone: (55 11) 3201-1000

Email: [email protected]

www.brpr.com.br/ri

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Br properties 2010 earnings release presentation

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