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www.sonaesierra.com passionateabout

innovation

In Review

06

Son

ae Sierra In R

eview 2006

Front cover: RioSul, Portugal

Who we are…

01 Strategy02 Highlights of 200606 The Main Events of 200608 Partnerships10 CEO’s Statement12 Operational Review

14 Sierra Investments24 Sierra Developments30 Sierra Management38 Sonae Sierra Brazil

44 Consolidated Accounts50 Corporate Responsibility52 Corporate Governance54 Board of Directors56 Other Executives58 Our Operating Portfolio59 Our Future

Sonae Sierra – In Review 2006 .01

We are passionate about

innovation

Sonae Sierra is a specialist internationalcompany which owns, develops and managesproperties in the shopping and leisure sector.

For us, shopping and leisure are indivisible. Through aunique combination of energy, imagination and practicality,we not only create innovative retail property solutions thatprovide stimulating shopping and leisure environments forour tenants, their customers and the communities weserve, we also deliver rewarding results for our investors.

.02 Sonae Sierra – In Review 2006

Our organisational

STRUCTURE

Sonae Sierra’s four-part structure reflects ourthree main business areas – European shopping centreownership, development and management – and ouractivities in Brazil.

Sierra Investments owns Sonae Sierra’s assets, provides its asset management and is responsiblefor our investments in Europe. It also holds 50.1% of the Sierra Fund’s equity and acts as investmentand asset manager of Sierra Fund.

Sierra Developments is responsible for the development of our shopping and leisure centres inEurope. Its activities include all aspects of procurement, conceptual development, architectural designand construction management.

Sierra Management is responsible for the property management of our European shoppingcentres, including those owned by Sierra Investments or by third parties.

Sonae Sierra Brazil operates autonomously, investing in, developing and managing a numberof shopping and leisure centres in Brazil.

Sierra Corporate Services provides a comprehensive portfolio of financial, legal, humanresources, environmental, communications, safety and health, and back-office services thatsupport our operations.

Sonae Sierra

SierraCorporate Services

SierraInvestments

SierraDevelopments

SierraManagement

Sonae SierraBrazil

Sierra Fund Portugal

Spain

Italy

Germany

Greece

Portugal

Spain

Italy

Germany

Greece

Portugal

Spain

Italy

Germany

Greece

Investment

Development

Management


Our sector

FOCUS

Sonae Sierra is focused solely on theshopping and leisure centre sector of theproperty industry, where it creates uniquefacilities that reflect its belief – and the desireof many people – that shopping should be more than justan enjoyable experience, it should be a stimulating leisureactivity as well.Our investment strategy takes a long-term view of our market, its trends and development.

While we prefer to own the assets we develop, we also invest in established shopping centres with potential forimprovement through a combination of redevelopment and active, innovative property and asset management.

The financial stability which stems from this policy, coupled with our creative approach to design and construction,has earned us an enviable reputation as developers with a real flair for innovation and quality.

Our strategy for

GROWTHCurrently operating in Portugal, Spain, Italy, Germany, Greeceand Brazil, with plans in hand for expansion into Central Europe,our strategy for growth is based on the innovative deployment ofour specialist skills, organised according to a successful businessmodel, which reflects the three strands of our business:ownership, development and management.We also set great store by our partnerships. Working with a number of international investors and local partners,we are constantly developing the strength of our financial base, improving the quality of our products, and increasingthe breadth and depth of our market knowledge.

As a result, we are always ready to respond to every new business opportunity with an innovative approach.


Total Net Asset Value(NAV) at year-end

€1,490million

Consolidated Net Profit(before minorities)

€270.6million

Asset gearing

29.4%

Interest cover

2.81

2006has been a remarkable year for

Sonae Sierra.

Not only have we reinforced the company’s portfolio with theinauguration of our RioSul shopping and leisure centre in Seixal,Portugal, we have also launched important new developmentsin every market we operate in.

Performance Indicators2001 2002 2003 2004 2005 2006

Real Estate NAV as of 31 Dec (€ million) 934 1,037 948 1,060 1,265 1,490

Real Estate NAV as of 31 Dec per share (€) 24.9 27.67 29.16 32.60 38.90 45.82

GLA owned in operating centres (000’s m2) 790 1,140 1,203 1,362 1,586 1,660

GLA under management (000’s m2) 1,128 1,517 1,564 1,839 2,025 2,001

Number of tenant contracts under management 3,949 5,089 5,399 6,134 7,166 7,293

Consolidated EBITDA – IAS (€ million) 73.8 95.5 98.1 107.6 125.7 150.3

Consolidated Net Profit before minorities– IAS (€ million) 120.5 149.5 249.1 126.8 219.5 270.6

Consolidated Net Profit Attributable to EquityHolders – IAS (€ million) 120.9 144.4 208.7 82.3 148.1 160.3

Non-audited accounts

% variation2001 2002 2003 2004 2005 2006

Real Estate NAV as of 31 Dec per share 24% 11% 5% 12% 19% 18%

GLA (m2) owned in operating centres 35% 44% 5% 13% 17% 5%

GLA (m2) under management 18% 34% 3% 18% 10% -1%

Number of tenant contracts under management 14% 29% 6% 14% 17% 2%


Gross Lettable Area (GLA)under management inPortugal, Spain, Italy,Greece and Brazil

2 million m2

Visits to shopping centresunder management

402million

Gross Lettable Area (GLA)owned or co-owned

1,660million m2

Team of people operatingin six countries

731

Luz del Tajo

EBITDA of

€150.3million(+20%)

Open MarketValue (OMV)

€4,728million(+15%)

NAV per share

€45.8(+18%)

We opened one major centre in Portugal and another was votedSpain’s Best Shopping Centre.

We won an important social responsibility awardin Brazil and formed a new alliance that willaccelerate our progress there.

We strengthened our partnerships in Europe and achieveda steady increase in our net profits.

The main events of

2006

Jan

Partnership withRockspring managedfunds for RioSul and SerraShopping in Portugal

Sept

Luz del Tajo won theAECC award in Spain

RioSul


We have consolidated our position in all our markets and are oncourse to become a €2 billion NAV company.

The year began with our sale to Rockspring managed Funds of a50% stake in two shopping centres in Portugal, thus confirmingour strategy of strengthening our partnerships with renownedinternational companies that value our performance.

February saw the launch of Freccia Rossa, our €146 millioninvestment in the historic centre of Brescia. When it opens in theAutumn of 2007, this new development will be Italy’s largestdowntown shopping and leisure centre.

In March we inaugurated RioSul, our €77 million project in Seixal,Portugal, which began construction in 2004. With 137 shops,22 restaurants and parking for 2,300 cars, we believe this centrewill do much to improve the quality of life in its catchment area.In the same month, we made a public presentation of our proposalsfor the Alexa centre in Berlin. Scheduled for inauguration in late2007, this development will make an important contribution tothe regeneration of Berlin’s Alexanderplatz district.

May was marked by our victorious bid for the usage rights of theGalatsi Olympic Hall in Athens. This valuable location, which is idealfor a shopping and leisure centre, was won in tandem withAcropole Charagionis and adds an important new dimension to ouroperations in Greece.

Over the following two months we made public presentations ofour plans for the development of El Rosal, a €120 million shoppingcentre in Ponferrada in Spain, and for a new centre for the city ofÉvora in Portugal.

In September the Spanish Shopping Centre Association votedToledo’s Luz del Tajo ‘Best Large Shopping Centre’ in the country.

In the same month, the Portuguese and Spanish Chamber ofCommerce and Industry presented Sonae Sierra with an awardas the best Portuguese company operating in Spain.

The following month, our Personæ Project won an ECO Award,presented by Amcham, Brazil, in the ‘Corporate Social Responsibility– Internal Public’ category, and we completed a major transactionwith America’s Developers Diversified Realty that will do much toaccelerate our progress in Brazil.

During the last two months of 2006 we began the €31 millionrefurbishment of Valecenter in Italy, inaugurated the final stageof our Shopping Campo Limpo centre in São Paulo, Brazil,and launched Lima Retail Park, our joint venture with MillerDevelopments, due to open in Viana do Castelo, Portugal,early in 2007.

By the end of 2006, we could look back on a busy year, withmuch accomplished and much more to be done.

Unfortunately, in February 2007, Deutsche Bahn officially informedus and our partner, Foncière Euris, that they were unable to findan acceptable solution to the problems arising from the buildingof the Dortmund train station, and consequently of the 3doshopping centre development. In view of this, we decided toinclude a write-off in our 2006 accounts of the total investmentmade to date in 3do.

We can look back on a busy year with much tobe pleased about. We are on course to becomea €2 billion NAV company.

Oct

Personæ won the Echoaward in Brazil

Oct

DDR partnershipin Brazil

We have continued our policyof developing partnerships withinterested parties based inthe countries of the EuropeanUnion, the USA and Brazil.The table opposite showsthe scope of theserelationships.

Our partnerships

Serra Shopping


Partnerships

Centres in Operation Partners Country Sonae Sierra

Viacatarina, Porto, Portugal ING Real Estate Netherlands 50%Centro Colombo, Lisboa, PortugalCentro Vasco da Gama, Lisboa, PortugalGrancasa, Zaragoza, SpainMax Centre, Bilbao, SpainValle Real, Santander, SpainZubiarte, Bilbao, SpainLa Farga, Hospitalet, Barcelona, Spain

GaiaShopping, Porto, Portugal CNP Assurances(25%) France 50%Arrábida Shopping, Porto, Portugal Ecureuil Vie (25%)

CascaiShopping, Cascais, Portugal Pan European (25%) U.K. 50%Trans European II (25%) U.S.A

Serra Shopping, Covilhã, Portugal Pan European U.K. 50%RioSul, Seixal, Portugal

NorteShopping, Porto, Portugal TIAA- CREF U.S.A 50%

MadeiraShopping, Funchal, Portugal Estevão Neves Portugal 50%

Parque Atlântico, Ponta Delgada, Portugal NSL Group Portugal 50%

Parque Principado, Oviedo, Spain LAR Group Spain 50%

Shopping Penha, São Paulo, Brazil Local Partners (26,8%) Brazil 73.2%

Franca Shopping, São Paulo, Brazil Local Partners (35,5%) Brazil 64.5%

Tivoli Shopping, São Paulo, Brazil Tivoli Emp. Part., Ltda. (75%) Brazil 25.0%

Shopping Campo Limpo, São Paulo, Brazil Tivoli Emp. Part., Ltda. (80%) Brazil 20.0%

Shopping Plaza Sul, São Paulo, Brazil Local Partners (80%) Brazil 20.0%

Pátio Brazil, Brasília, Brazil Local Partners (89,6%) Brazil 10.4%

Shopping Metrópole, São Paulo, Brazil Local Partners (90%) Brazil 10.0%

Mediterranean Cosmos, Thessaloniki, Greece Acropole Charagionis (19,95%) Greece 19.95%Lamda Development (60,1%)

Centres under Development Partners Country Sonae Sierra

Plaza Mayor Shopping, Malaga, Spain Castle City U.K. 75%

El Rosal, Ponferrada, Spain Grupo Mall Spain 70%

Setúbal Retail Park, Setúbal, Portugal Miller Developments U.K. 50%Lima Retail Park, Viana do Castelo, Portugal

Galatsi, Athens, Greece Acropole Charagionis Greece 50%

Freccia Rossa, Brescia, Italy AIG (40%) U.S.A 50%Coimpredil (10%) Italy

Alexa, Berlin, Germany Foncière Euris France 50%Weiterstadt, Weiterstadt, Germany

Le Terrazze, Spezia, Italy ING Real Estate Development Netherlands 50%

Others Partners Country Sonae Sierra

Sierra Fund ABP Netherlands 50.1%CDC FranceCNP Assurances FranceEcureuil Vie FranceTIAA- CREF U.S.A

Sonae Sierra Brasil, BV DDR U.S.A. 50%

Sonae Sierra Brasil, Ltda. Enplanta Engenharia Brazil 93%

Sierra Charagionis – Management of Shopping Centres (Greece) Acropole Charagionis Greece 50%


CEO’s StatementSonae Sierra’s first shopping centre development wascompleted in 1991. Since then our continuing passionfor innovation has been the driving force behind thesuccessful development of pioneering concepts inPortugal, Spain, Germany, Italy, Greece and Brazil.

For us, shopping and leisure go hand in hand. We are guided byour belief that the people who visit our centres want to enjoy morethan just a satisfying shopping experience. They also want to takepleasure from a variety of leisure facilities at the same location.

Today, our vibrant portfolio of award-winning shopping and leisurecentres is recognised as one of the most dynamic in the sector.

2006 was a very good year for Sonae Sierra.

Despite the generally poor performance of retail sales across muchof Europe – which led to increased competition for market sharein all the continent’s retail sectors – we achieved a 22% increasein our direct net profits and a 20% increase in EBITDA. At the endof the year our total net profits stood at €271 million. We were alsoable to report a 19.7% return on equity, which we consider to bevery good, and an increase in our NAV of 17.8%.

These results, which outstripped our expectations, are due as muchto the inspirational hard work of our people as they are to theincrease in the underlying value of our assets and the progress wehave made in opening new shopping centres and adding value toour existing portfolio.

New and stronger partnerships

In addition to our year-end figures, one of the most rewardingfeatures of the year has been the way in which we havestrengthened our financial base.

At the start of the year, Grosvenor acquired an additional 17.04%of our share capital, which increased their holding to 50% and puttheir nine-year-old partnership with Sonae SGPS onto an equal footing.Not only does this move reinforce our position in the market, it is –I believe – a direct reflection of the mutual trust and respect thatexists between both our shareholders, and an expression ofGrosvenor’s belief in our ability to perform at the highest level.

Towards the end of the year we established a new power base forour business in Brazil by entering into a new 50/50 partnership withDevelopers Diversified Realty, a leading player in the shoppingcentre sector in the United States and one of that country’s largestshopping centre REITs.

This partnership does more than bring together two strongorganisations with like-minded beliefs and ambitions. The resultinginjection of some R$ 600 million over the next three years will giveSonae Sierra Brazil the financial muscle needed to accelerate theprogress of our joint business in Brazil. It also signals our intention ofbecoming the leader in Brazil’s shopping and leisure centre industry.

My colleague, João Pessoa Jorge, who runs Sonae Sierra Brazil,reports on this partnership in more detail on page 39.

Other joint venture shareholding increases during the year, such as thoseof Miller Developments and Rockspring managed Funds, have addedto our financial standing and point to our partners’ confidence in ourability to deliver high quality, well managed product at the right price.

Significant new investments

Our two most important investments during the year have been inGreece – where, following a very competitive bidding process, wewon the usage rights for the Galatsi Olympic Hall for the next 40years – and in Germany, where we secured the acquisition of theMünster Arkaden shopping centre from Sparkasse Münsterland Ost.

The Athens Galatsi development – a €69 million joint venture withAcropole Charagionis – will become our second Greek shoppingand leisure centre development. Capitalising on the experiencegained through our successful inauguration of MediterraneanCosmos in Thessaloniki, we expect this exciting project to giveus an opportunity to provide Athens with a first class developmentdesigned to benefit both the local people and the city’s visitors.

Münster Arkaden is a high quality shopping centre located in theheart of a city with a number of centres of innovative research andtechnology, a modern infrastructure and a population of 270,000.

Progress in Germany and Italy

Securing the acquisition of Münster Arkaden is only one of severalencouraging developments in Germany.

We also acquired a well-located site in Weiterstadt, where we havealready started to build a large shopping and leisure centre, and weare making good progress with our Alexa centre in Berlin.


The opening of Freccia Rossa in Brescia in the autumn of 2007 willbe a milestone in the development of our market share in Italy.

We have increased our investment in both these countries in recentyears, to the point where they account for 11% of our capitalisation,as at 31 December 2006. Given each one’s economic strength andconsumer spending power, we expect both markets to offer furtheropportunities for profitable acquisitions and developments.

Professionalism recognised

As a company involved in a very competitive business, we havealways taken awards seriously, believing they are presented inrecognition of our professionalism and creativity.

Last year we were pleased to be recognised by the Portugueseand Spanish Chamber of Commerce and Industry as the bestPortuguese company operating in Spain, where we own 11shopping centres – one of which, in Toledo, was considered by theSpanish Shopping Centre Association to be the best in the country.

It was satisfying, too, that our Personæ Project, which aims tomake us the shopping and leisure centre company with the higheststandards and practices of health, safety and social responsibility,won the 2006 ECO award in the ‘Corporate Social Responsibility –Internal Public’ category. This award, which was launched by theAmerican Chamber of Commerce in 1982, acknowledges thedevelopment of Business Citizenship in Brazil. The 2006 presentationceremony, which took place in São Paulo, was attended by theformer Vice President of the United States, Al Gore.

It was also gratifying to be placed third in Portugal’s Euronaturaenvironmental ranking, which covers every aspect of corporateresponsibility and environmental management in our sector,including ratings for the construction materials we use, ourlighting and heating systems and our transport arrangements.

I do believe that all these competitions – particularly thosewhich relate to the environment, for which are all responsible –are a good idea. In many cases, they set the pace ahead of ourvarious governments’ moves to encourage improved corporatesocial behaviour.

Against this backdrop, we have continued our environmentalmanagement programme and were pleased that a further eightof our operating shopping centres received ISO 14001 certificationduring the year, as well the two new centres under constructionand completed in 2006. Our plan is that all our centres will havethis accreditation.

Challenging year ahead

Looking ahead, we see a challenging year in front of us.

Despite minimal growth in retail industry sales over the past year, theinvestment markets show no signs of loosing their buoyancy and thedemand for retail property is high. As a result, we may find it difficultto identify and secure good investment opportunities as we face stiffcompetition in all our markets.

However, we can look forward to the inauguration of six brand newcentres and one expansion in Europe – which will bring their ownoperational pressures – and to the acceleration of our developmentprogramme in Brazil.

We are also actively exploring new markets in Central Europe, wherewe recently appointed a new Expansion Manager, Jorge Morgadinho.Here, as elsewhere, we shall pursue our objective of creating innovativedestinations designed to fulfil our belief that shopping and leisure areone and the same thing; that the people who visit our centres do soto shop and to enjoy themselves.

My expectation is that – despite the competitive market conditions –with the quality of our people and their commitment to our way ofdoing things as well as to our future, coupled with the support weenjoy from our partners, we can anticipate another year of progresstowards our stated aim of becoming a €2 billion NAV company by 2009.

Álvaro PortelaCEO

“2006 was an exceptionallysuccessful and rewarding yearduring which we made goodprogress towards our goal ofbecoming a €2 billion NAVcompany.”Álvaro PortelaChief Executive Officer

The continuing expansion of our operations in Europe reflects wellon our ability to direct and supervise the core strands of our business:ownership, development and management. Our new relationshipwith America’s Developers Diversified Realty gives us a strong partnerable and willing to help us develop our business in Brazil.

2006A year of steady expansion in Europe

and exciting new developmentsin Brazil.

> SIERRAINVESTMENTS2006 was another active year for SierraInvestments, with operations strengthened inall our markets and a 12% growth in the valueof our portfolio. The acquisition of a newcentre in Portugal and the opening of the firstphase of another in Italy were highlights ofthe year. The division has also secured anagreement for its first investment in Germany.

> SIERRADEVELOPMENTSThe inauguration of RioSul in Seixal, Portugal,was a landmark for Sierra Developments. Theacquisition of a green-field site in Weiterstadtnear Frankfurt for the development of an out-of-town shopping centre, and the successfulbid for the right to develop a new shoppingcentre on the site of the Galatsi Olympic Hall inAthens also played their part in a successful year.

Operational Review


> SIERRAMANAGEMENT2006 was marked by the addition of three newcentres to the Sierra Management portfolio,and by the start of leasing activities for tencentres under development. With operationsin Portugal and Spain benefiting from theeconomies of scale and years of experience,the challenge is to accelerate the growth ofits activities in Italy, Germany and Greece andreach the comparable levels of efficiency.

> SONAESIERRA BRAZIL2006 will be remembered for the establishmentof the new partnership between Sonae Sierraand Developers Diversified Realty of America,a relationship that will do much for theacceleration of Sonae Sierra Brazil’s developmentprogramme. The year was also marked bythe inauguration of the third and final phaseof Shopping Campo Limpo, located in oneof São Paulo’s fastest-growing districts.


developmentvision

partnerships

management

focusinspiration

ownership

expansion

international

innovationcommunities

passion

Operational Review – Sierra InvestmentsRioSul

The acquisition of RioSul, a brand new shopping centre created by SierraDevelopments on the outskirts of Lisbon, and securing the acquisition oftwo other centres in the Algarve has strengthened our position in Portugal.

Acquisition of RioSul shopping centre from Sierra Developments

Contribution of Spain’s Zubiarte and Avenida M40 shoppingcentres to the Sierra Fund

Opening of the expanded food court at Arrábida Shoppingin Portugal

Opening of the first phase of the Valecenter refurbishment in Italy

Securing of the acquisition in Germany of Münster Arkaden fromthird parties with formal acquisition scheduled for the first quarterof 2007

Securing of the acquisition, in conjunction with GREP Fund,of Modelo de Albufeira and Continente de Portimão shoppingcentres in Portugal

Increase of €567 million in the portfolio’s market value, a growthof 12% for the year

Sierra Investmentsowns the company’s shopping and leisure centres

and manages its European investment business.

Business activities

Sierra Investments owns the company’sshopping and leisure centres, manages itsinvestment business in Europe, and activelysupports the exploration of new markets.Its principal objective is to increase the assetvalue of all the company’s shopping andleisure centres.

The division contributes to the company’sresults through a combination of rentalincome and the rising market values of theshopping centres it owns. Sierra AssetManagement, a company within SierraInvestments, also provides income-producingasset management services to the properties.

Acting on behalf of the company, the divisiontakes a long-term view, investing in assetsdeveloped by Sierra Developments as well asestablished centres acquired from third partiesfor their potential increase in value.

Sierra Investments holds 50.1% of theSierra Fund, thus maintaining its positionas co-owner and manager of the Fund’sunderlying assets.

Sierra Investments in 2006

The transactions carried out during 2006 andthe strengthening of our operations across allour markets made 2006 another active yearfor Sierra Investments.

One of the highlights was the start of ourinvestment activity in Germany, begunthrough securing the acquisition of MünsterArkaden, a shopping centre in the heart ofthe city of Munster, built around a mall thatserves as an important link between the city’smain pedestrian areas.

In the beginning of 2007, we alsostrengthened Sonae Sierra’s position inthe Algarve through the acquisition of twoshopping centres. Shopping Centre Modelode Albufeira has 10,471 m2 of GLA and atotal of 43 shops. Shopping CentreContinente de Portimão, on the main accessroad to Portimão, has 13,492 m2 GLA and60 shops.

During the year we also acquired RioSul, ashopping centre on the outskirts of Lisbon,from Sierra Developments.

Ana Guedes OliveiraSierra Investments,Managing Director



The total rental income of Sierra Investment’s owned or co-ownedportfolio increased by €17.5 million during 2006, an improvementof 12% on the previous year.

Sierra Investments – Performance 06In line with our policy of active management

aimed at achieving consistent value creation

within our portfolio, we completed the

expansion of the food court in Porto’s Arrábida

Shopping at the end of August, adding a

further 4,257 m2 GLA to the overall scheme.

In Italy, we completed the first phase of

the refurbishment of Valecenter in Venice.

With 6,650 m2 GLA and 13 units, this

phase – which brings a modern and

appealing atmosphere to the centre –

opened in December.

Rental income and property values

During the year, the total rental incomeof Sierra Investment’s owned or co-ownedportfolio increased by €17.5 million on theprevious year, an improvement of 12%vis-à-vis 2005. This increase – 4.1% on alike-for-like basis – has been achieved througha combination of acquisitions and organic

growth within the existing portfolio. Turnoverrents in 2006 reached 5% of total fixed rents.

As usual, the company continues to assessthe performance of its properties through thegrowth of their market value.

When compared with 2006, the increase inthe valuation of the operating properties is€318 million. The increase in total value isa result of the general decrease in exit yieldsof shopping centres in the portfolio, coupledwith their consolidation in their respectivecatchment areas. It is believed there is stillroom for further yield compression in theportfolio, most notably in Portugal, but alsoin Spain, Italy and Greece.

Occupancy Rate2006 2005

Portugal 98% 97%

Spain 96% 94%

Italy 79% 94%

Greece 98% 78%

Operational Review – Sierra Investments

CascaiShopping


Rents & Sales

Fixed rents Variable rents Total rents % 06/05 rents Sales % 06/05 sales2006 2005 2006 2005 2006 2005 total like-for-like 2006 2005 total like-for-like

Portugal 166,772 151,133 8,435 10,117 175,207 161,250 8.7% 1.3% 2,029,478 1,845,791 10.0% 2.5%

Spain 64,642 61,968 3,384 2,360 68,026 64,328 5.7% 4.3% 828,284 766,516 8.1% 7.1%

Italy 1) 6,901 7,449 0 0 6,901 7,449 -7.4% -7.4% 42,281 53,395 -20.8% -20.8%

Greece 12,353 1,204 994 161 13,346 1,365 877.7% 877.7% 118,779 23,045 415.4% 415.4%

Figures in Euro (thousands)

1) Italy sales only include Valecenter as tenants do not declare sales on other centres. The -20% variation is due to the end of the leasing of a single large store.

Retail market outlook

The retail market outlook suggests that thestrengthening of our core activities will carryon, on the back of an economically healthier2006 across our target markets.

In Portugal, economic activity recoveredmoderately in 2006, with much of theperformance driven by healthier domesticconditions. Following the two successive fallsin volumes seen in 2004 and 2005, 2006recorded a resumption of growth ininvestment activity, with shopping centresrecording additional yield falls. Consumerspending growth remained weak over theyear as a whole, largely due to tight fiscalpolicies and relatively weak confidence levels.Prime shopping centre yields fell furtherduring 2006 on the back of continuing stronginvestor demand.

In Spain, while consumer spending andhousing demand currently drive growth,activity is expected to moderate over the nextyear. 2006 proved to be the strongest year onrecord for property investment, with yieldcompression continuing to be a major driverof performance. Investor interest remainsstrong, notably for high street property,which continues to benefit from steady rentalgrowth, and for well-located shopping centresand retail parks. In the shopping centre sector,some of the older/weaker schemes willcontinue to struggle, notably those lackinggood management, which may presentopportunities for those investors willing toplay a more active role in asset management.All in all, Spain will continue to out-performthe Eurozone.

Economic growth stabilised in Italy during2006, with consumer sentiment remainingoptimistic and private spending strong. Theeconomy looks set to decelerate somewhatin 2007 and will continue to under-performits European counterparts as a result of tighterfiscal policies and higher interest rates. Theproperty investment market had anotherstrong year in 2006. Shopping centre yieldshardened and the emerging retail warehouseinvestment market is now beginning toimpact on yields. In terms of rental growth,Italy remains one of the best performingmarkets in Europe. The investment market forItalian shopping centres ended the year verypositively, with investor interest stilloutweighing available stock, but high levelsof development are gradually boosting theamount of investible stock. Internationalinvestors are continuing to build a presencein Italy, with retail sales performance relativelyrobust and occupier interest from foreignretailers also growing.

Economic activity in Greece has reboundedfrom the relatively mild growth of 2005,underpinned primarily by buoyant investmentgrowth which remains the chief driver ofeconomic growth. Yield compression wasexperienced across the country. Yet, despitethese falls, yields remain high, although recentshopping centre and retail park deals showthem to be more in line with the more matureEuropean retail markets. The investmentmarket remains dominated by local privateinvestors, with a limited number of shoppingcentre and retail park transactions to date.This is expected to change as more modernstock comes on to the market. Overall, marketsentiment is good and the long-termprospects are bright.

In Germany, economic growth acceleratedover the final quarter of the year. The positiveperformance was largely underpinned bythe strength of both domestic and foreigndemand. The economy is, however, set toease slightly in 2007, although it will remainrelatively robust as net export growth slowsand the recent VAT hike moderates consumerspending. Capital values remained on anupward curve during the second half of 2006,driven by downward yield shifts caused by thehuge weight of capital flowing into Germanproperty. As the German investment marketbroke all records in 2006, the weight ofavailable capital has attracted a swarm ofinternational players to a market with morewilling sellers than most. Overall, from aninvestment point-of-view, 2007 is expected tomatch 2006 in terms of investment volumes.The retail sector is again set to play a majorpart as demand for retail assets remainsexceptionally strong. Development activityis healthy and the market for new schemesand those still under construction is highlycompetitive, as many modern in-townschemes are fully let and performingvery strongly.


Open Market Value Figures in Euro (thousands)

Shopping Centres in Operation % Sierra* Open Market Value OMV Variation OMV Variation31 Dec. 2006 31 Dec. 2006 31 Dec. 2005 Total %

AlgarveShopping 100% 140,176 115,977 24,199 21%Arrábida Shopping 50% 73,926 67,240 6,686 10%CascaiShopping 50% 169,286 142,772 26,514 19%Centro Colombo 50% 361,250 311,399 49,851 16%Centro Vasco da Gama 50% 137,952 118,028 19,924 17%CoimbraShopping 100% 35,025 37,239 -2,214 -6%Estação Viana 100% 82,167 73,301 8,866 12%GaiaShopping 50% 81,632 71,103 10,529 15%GuimarãeShopping 100% 46,243 42,592 3,651 9%LoureShopping 100% 119,205 110,419 8,786 8%MadeiraShopping 50% 38,549 36,301 2,249 6%MaiaShopping 100% 57,555 56,453 1,102 2%NorteShopping 50% 188,233 168,301 19,932 12%Parque Atlântico 50% 37,044 30,914 6,130 20%Viacatarina 50% 35,854 35,755 100 0%Serra Shopping 50% 22,426 20,370 2,056 10%RioSul 1) 50% 55,516 – 55,516 –Edifício Grandela 100% 5,727 5,021 706 14%Gare do Oriente 100% 1,182 1,162 20 2%

Total Portugal 1,688,945 1,444,344 244,601 17%

Avenida M40 100% 82,506 92,077 -9,571 -10%Dos Mares 100% 55,308 48,056 7,252 15%Grancasa 50% 89,734 80,490 9,244 11%La Farga 50% 29,949 28,747 1,202 4%Luz Del Tajo 100% 102,295 89,460 12,835 14%Max Centre 50% 87,491 77,547 9,944 13%Parque Principado 50% 88,966 78,492 10,474 13%Plaza Eboli 100% 56,702 54,647 2,055 4%Plaza Mayor 100% 81,721 80,222 1,499 2%Valle Real 50% 48,128 45,256 2,872 6%Zubiarte 50% 43,826 43,766 61 0%

Total Spain 766,624 718,758 47,866 7%

Valecenter 100% 116,159 99,258 16,901 17%Airone 100% 18,506 17,257 1,249 7%

Total Italy 134,665 116,515 18,150 16%

Mediterranean Cosmos 19.95% 29,682 22,353 7,329 33%

Total Greece 29,682 22,353 7,329 33%

Total 2,619,916 2,301,969 317,947 14%

* In Centres owned by SIERRA Fund, it means control1) Opened during 2006


Future prospects

Our objective is to stay focused on value creation through activeasset management, thus enhancing the maximum potential ofeach property. The coming year will see us working on severalrefurbishments such as Centro Colombo in Lisbon, Grancasain Zaragoza and the second phase of Valecenter.

We aim to acquire new operating centres in Germany and Italy,where we have reinforced our asset management teams. We willalso keep a close eye on developments in Central Europe, wherepotentially interesting properties are beginning to emerge and ourspecial expertise and experience should release significant value.

We aim to keep a close eye on developments in Central Europe,where potentially interesting properties are beginning to emerge andour special expertise and experience should release significant value.

Centro Colombo



Centro Vasco da Gama


1,80

2

2001 2002 2003 2004 2005 2006

1,05

5

1,37

6

1,46

9

1,75

4 2,30

2

2,62

0

2,39

0

2,67

2 3,10

1 3,74

8 4,32

9

The objective of the Sierra Fund is to provideits investors with dividends and capital growthfrom investments in high quality, activelymanaged shopping centres in the Fund’starget markets of Portugal, Spain, Italy,Germany and Greece.

Our five partner investors in the Fund areStichting Pensioenfonds ABP of Holland,the French companies Caisse des Dépôtset Consignations EP, CNP Assurances andEcureuil Vie, and TIAA-CREF which is basedin the USA.

The commitment of these internationalinstitutional investors not only validates thequality of Sonae Sierra’s existing assets anddevelopment programme, but also providesnew knowledge sources which will help SonaeSierra improve its performance going forward.

2006 was another very good year for the Fund,with the investors’ return reaching 27%.

Two shopping centres in Spain were acquiredfrom Sierra Investments – Zubiarte in Bilbaoand Avenida M40 in Madrid – bringing theFund’s total investment to €368 million. Thisgrowth was totally financed out of additionaldebt. No capital calls were made on investorsduring 2006, and the Fund still has €172million of undrawn equity that is committeduntil 2008.

The Fund also contributed to the developmentof the enlarged Arrábida Shopping centrein Porto, and to the first phase of therefurbishment of the Valecenter near Venice.

The Fund played an important part in securingthe acquisition of the Münster Arkadenshopping centre in Germany. This acquisitionwill be completed in the first quarter of 2007.

Sierra Investments – Asset Market Values

The Sierra Fund in 2006

The Sierra Fund was established in 2003 with a total committedequity of €1.08 billion. Sonae Sierra holds 50.1% of the Fundand Sierra Investments manages its assets.

Total ValueSonae Sierra Control

Open Market Value of Centres in Operation(€ millions)



Indirect profits

Indirect profits arise either from the changein value of the investment properties or therealisation of capital gains on the sale ofassets and/or shareholding positions.

The value created on investment propertiesreached €221 million in 2006, of which€156 million relate to value creation onassets in Portugal, €50 million in Spain andthe remaining €14 million on asset valuecreation in Italy.

Minority interests of €109.5 millioncorrespond mainly to 49.9% ownershipof our five partners in the Sierra Fund results.

Sierra Investments 2006 Net Profits

Sierra Investments contributed €240.9 millionto the consolidated profit of Sonae Sierra.The company consolidates the Sierra Fundin full, given that it holds effective controlwith 50.1% of the capital.

Direct profits

The direct profits of Sierra Investments arederived from the operation of shopping andleisure centres that are part of its portfolio,including those assets that are in the SierraFund. The direct profits also include the assetmanagement services provided to theproperties by Sierra Asset Management.

The growth in turnover over 2005 is largelydue to growth in the portfolio on two fronts.

The value created on investment properties in 2006 reached€221 million. €156 million relate to assets in Portugal, €50 millionto assets in Spain and €14 million to assets in Italy.

LoureShopping

Sierra Investments – Financial Report 06The first includes the acquisition, in Portugal,from Sierra Developments in 2006 of theRioSul project, which began operations in thesame year, and of LoureShopping and SerraShopping, both in Portugal, which wereacquired and began operations in 2005.

The second is the full-year effects of 2005’sthree acquisitions in Italy and of Plaza Éboliin Spain.

The increase in asset management incomeover 2005 is also the result of the increasein the portfolio of the Sierra Fund. EBITDAincreased by 13%.

Net financial costs rose 9% compared to 2005due to an increase in bank debt from €1.107million to a total of €1.175 million. Thisincrease is largely the result of the acquisitionof assets during 2006 and of new financing/refinancing of the existing portfolio.


Sierra Investments Profit & Loss Account (€ 000)

2006 2005(*) % 06/05

Fixed Rental Income 152,080 134,002 13%Turnover Rental Income 7,600 8,234 -8%Key-Money Income 6,264 7,665 -18%Other Income 7,103 5,682 25%

Retail Operating Income 173,047 155,584 11%

Property Management Services 8,719 7,946 10%Asset Management Services 18,093 14,205 27%Letting & Promotion 4,037 2,914 39%Capital Expenditures 3,088 4,572 -32%Other Costs 14,220 13,510 5%

Retail Operating Costs 48,157 43,148 12%

Retail Net Operating Margin 124,890 112,436 11%

Parking Net Operating Margin 3,027 3,321 -9%

Co-generation Net Operating Margin 1,217 1,180 3%

Shopping Net Operating Margin 129,135 116,937 10%

Offices Net Operating Margin 372 362 3%

Income from Asset Management Services 18,661 14,266 31%

Total Overheads 9,824 9,117 8%

EBITDA 138,344 122,448 13%

Depreciation 214 203 6%Provisions 1,240 2,353 -47%Recurrent net financial costs/(income) 46,511 42,491 9%Non-recurring costs/(income) 200 (361) 155%

Results Before Corporate Taxes 90,179 77,763 16%

Corporate Taxes 18,771 15,182 24%

Direct Profit 71,408 62,581 14%

Realised Property Profit (9) 18,221 -100%Non -Realised Property Profit 221,060 144,200 53%

Total Indirect Income from Investments 221,051 162,421 36%

Deferred tax 51,560 52,218 -1%

Indirect Profit 169,492 110,203 54%

Net Profit for the Period 240,900 172,783 39%

Attributable to:Equity holders 131,441 103,629 27%Minority interests 109,458 69,155 58%

Non-audited accounts(*) 2005 has been restated in order to detail the Asset Management activity

Sierra Investments Consolidated Balance Sheet (€ 000)

31/12/06 31/12/05 var. (06 – 05)

Investment Properties & Others 2,661,406 2,350,906 310,500

Tenants 10,849 10,127 722

Tax Shelter 15,677 16,335 -658

Other Assets 80,562 97,683 -17,121

Deposits & Short Term Investments 281,845 399,645 -117,800

Total Assets 3,050,339 2,874,696 175,644

Net Worth 832,265 787,687 44,579

Minorities 398,014 293,484 104,530

Bank Loans 1,175,106 1,106,952 68,153

Shareholder Loans 73,041 89,252 -16,211

Deferred Taxes 446,430 384,000 62,430

Other Liabilities 125,483 213,321 -87,837

Total liabilities 1,820,060 1,793,525 26,535

Net Worth, Minorities and Total Liabilities 3,050,339 2,874,696 175,644


Retail operating incomeof €173 million

EBITDA increased by 13%to €138.3 million

Value created on propertiesof €221 million

Net profit of €240.9 million,representing a growth of 39%,of which €131.4 millionattributable to equity holders

Operational Review – Sierra DevelopmentsCentro Vasco da Gama

Despite increased competition in all our markets, we not onlyopened a brand new shopping centre in Portugal but alsoapproved several new developments.

Inauguration of RioSul in Seixal, Portugal

Acquisition of green-field site in Weiterstadt, Germany, for thedevelopment of a major out-of-town shopping centre

Successful bid for the right to develop new shopping centreon the site of the Galatsi Olympic Hall in Athens

New joint venture with Foncière Euris for the ongoingdevelopment of Weiterstadt project

Six inaugurations planned for 2007

Sierra Developmentshas responsibility for all aspects of the development

of the company’s portfolio of shopping and leisure centres in Europe.

Business activities

Sierra Developments activities cover landprocurement, concept creation anddevelopment management services designedto ensure the successful development of eachnew shopping centre.

Sierra Developments contributes to SonaeSierra’s consolidated income in two principalways: through the supply of developmentservices to our projects and by adding valueto each project during the developmentphase. On completion, the full value of eachproject is realised when the property is soldto Sierra Investments at market value.

The most added value is created during thedevelopment phase of each shopping andleisure centre. Through the constant recyclingof capital, backed by a rigorous procurementpolicy and excellent management standards,we are able to create innovative assets whichare also attractive investments.

Effective marketing and letting are other keyfactors for the success of our developments.These services are contracted out to our sisterdivision, Sierra Management.

During the past year, we have expandedour search for new projects to include thecountries of Central Europe, where we arelooking for development opportunities thatwill add value to our portfolio.

Sierra Developments in 2006

2006 was a positive year for SierraDevelopments. Despite increased competitionin all our markets, we not only opened a newshopping centre – RioSul in Seixal, Portugal –but also approved several new developments.As a result, we now have six shopping andleisure centres due to open in 2007, anotherthree under construction and four more inthe planning stage.

The inauguration of RioSul was a landmarkfor our company. This new centre, with39,734 m2 of GLA and 137 shops serving adensely populated area, has generated 920new jobs and has already proved to be verypopular among tenants and consumers alike.

The acquisition of a green-field site inWeiterstadt for the development of a majorout-of-town shopping centre south ofFrankfurt, and our successful bid – inconjunction with Acropole Charagionis – forthe right to develop a new shopping centreon the site of the Galatsi Olympic Hall inAthens, were also important milestones.

We also negotiated a new joint venture withFoncière Euris for the ongoing developmentof Weiterstadt project in Germany.

Fernando Guedes OliveiraSonae Sierra, Executive Director,Developments Europe



Operational Review – Sierra Developments

Of the countries in which we operate, Italy and Germany remainthe more important, mainly due to their economic standing withinthe European Union.

Sierra Developments – Performance 06Regional review

Of those countries in which we operate, Italyand Germany remain the more importantmarkets for us, mainly due to their economicstanding within the European Union.

While the highlight of our year in Portugalwas the inauguration of RioSul, we havemade good progress on the constructionof Lima Retail Park in Viana do Castelo.This project is due for completion in theSpring of 2007. We have also started theconstruction of 8ª Avenida, a new shoppingcentre in S. João da Madeira, which is dueto open in the Autumn of 2007.

In Spain, we are on schedule with theconstruction of El Rosal in Ponferrada,and Plaza Mayor Shopping in Malaga isprogressing well. Both of these projects aredue for completion by the end of the year.Early in 2007, we also entered into anagreement with our partners, MillerDevelopments, to purchase a plot in Pulianas,near Granada, where we plan to develop ashopping centre and retail park with a totalGLA of 45,000 m2. We have also signed anagreement with IKEA to sell them a plot fora store of 30,000 m2 adjacent to our project.

We plan to start the construction of a furthernew project in Portugal and another in Spain,and are hoping to commence developmentof two more projects in Portugal and onein Spain.

In Italy, we have started the construction ofFreccia Rossa, a €146 million development inBrescia’s downtown , which is due to openlater in 2007. Work is also progressing atGli Orsi in Biella, a shopping centre offering40,000 m2 of GLA, which will open in late2008. Likewise, land reclaiming works areunder way in La Spezia where Le Terrazze,a 38,000 m2 shopping centre, is underdevelopment in a joint venture with ING REDI.We believe the prospects in Italy look good.Our ambition is to progress the planning ofprojects already approved, so that we canstart construction, and we will be seeking tosecure two additional development projectsduring the course of the year.

In Germany, construction has already startedat Weiterstadt site, a 50/50 joint venture withFoncière Euris. This is due for completion inthe later part of 2008. In spite of havingcontinued our efforts to conclude a finalagreement with Deutsche Bahn on the 3dodevelopment in Dortmund, we were surprisedby their decision to terminate negotiations inFebruary 2007. On a more positive note, thesuccessful inauguration of our Alexa projectin Berlin, scheduled for Autumn 2007, will bea major milestone in our development in theGerman market. Having established a businessbase on which to build on, we believe thatthe prospects are good. Nevertheless, weexpect to face stiff competition for gooddevelopment opportunities.

Weiterstadt


In Greece, our successful bid for the right todevelop the Galatsi project on the site of theGalatsi Olympic Hall in Athens opens newdoors in a promising market. Retailers acrossthe country are becoming more aware ofthe benefits of shopping centres to the localmarket. We will be preparing the ground forone or two new projects during 2007.

The year ahead

2007 will be a busy year for SierraDevelopments.

Lima Retail Park will be inaugurated in Spring.In September we expect to open the Alexashopping centre in Berlin and, in October,we anticipate the inauguration of 8ª Avenidain S. João da Madeira, El Rosal in Ponferradaand Plaza Mayor Shopping in Malaga.The inauguration of Freccia Rossa in Bresciais scheduled for November.

Despite the increased level of competition,we believe we will be able to approve morenew projects in 2007 than we did in 2006.The general economic outlook is not onlyimproving, but also creating a positiveenvironment for companies like ours.

We are determined to maintain our reputationfor innovative shopping and leisure centreconcepts, the quality of our designs andthe tenant mix and range of services atour centres.

Our plan is to build on the sound base wehave established in Italy, Germany and Greece,and to establish ourselves as a significantplayer in the Central European markets.

Sierra Developments contributed €11.8 millionto Sonae Sierra’s consolidated profits for2006. These profits have two components.The first is direct profit, which is a product ofour project development services in connectionwith the regular activity of propertydevelopment. The second – indirect profit –corresponds to the value created in our assetsduring the development process.

Alexa


Direct net profit

The value of our project development servicescapitalised on projects under developmentremains at a high level. Following thesuccessful inaugurations of 2006, we renewedour portfolio of projects under development,with new developments in Portugal, Germanyand Greece, and increased our activity in Italy.

Despite the steady pace in our businessactivity and the increase in our workforce,operational costs have decreased 11% overthe previous year. This is the result of oureconomies of scale, which are increasingas we consolidate our position and expertisein the markets we operate in.

The net financial income derives from thecapital we invest in our portfolio, whichreduces as we increase the leveragingof our projects.

Indirect net profit

Realised property profit was negativelyinfluenced by the write-off of the 3do project,in Germany. Nevertheless, such impact wasflattened by the gains registered with theopening of RioSul in 2006 and the increasein the Open Market Value (OMV) of theshopping centres inaugurated in 2005.

The value created in centres underdevelopment reached an impressive €49million, of which €17 million have beenrecognised in previous years. This was theoutcome of a decline in real estate yieldscombined with our outstanding projectmanagement, enhanced by the successfulleasing of projects both completed or stillunder development.

Despite the steady pace in our business activity and the increasein our workforce, operational costs have decreased 11% over theprevious year.

RioSul

Sierra Developments – Financial Report 06

Operational Review – Sierra Developments


Sierra Developments Profit & Loss Account (€ 000)

2006 2005 % 06/05

Project Development Services Rendered 12,942 13,136 -1%

Operating costs 22,438 25,191 -11%

EBITDA (9,496) (12,055) 21%

Depreciation and provisions 78 149 -48%Net financial costs/(income) (2,912) (4,088) 29%Non-recurring costs/(income) 65 6 -

Results Before Corporate Taxes (6,726) (8,122) 17%

Corporate Taxes (2,265) (1,296) -75%

Direct Net Profit (4,461) (6,825) 35%

Realised Property Profit (3,768) 47,019 -108%Anticipated Non -Realised Property Profit 32,169 12,057 167%

Total Indirect Income from Investments 28,401 59,075 -52%

Deferred tax 12,101 16,752 -28%

Indirect Net Profit 16,299 42,324 -61%

Net Profit for the Period 11,838 35,499 -67%

Attributable to:Equity holders 11,838 35,500 -67%Minority interests (0) (1) 100%


Sierra Developments Consolidated Balance Sheet (€ 000)

31/12/06 31/12/05 Var. (06 – 05)

Properties under Development 348,482 244,431 104,051

Customers 1,248 3,420 -2,171

Other Assets 106,082 140,595 -34,513

Deposits 33,210 13,310 19,900

Total Assets 489,023 401,756 87,267

Net Worth 92,845 96,476 -3,631

Minorities 2,229 2,244 -15

Bank Loans 125,820 58,297 67,523

Shareholder Loans 162,458 161,379 1,078

Deferred Taxes 8,784 5,859 2,925

Other Liabilities 96,886 77,500 19,387

Total Liabilities 393,949 303,036 90,913

Net Worth, Minorities and Total Liabilities 489,023 401,756 87,267


Development services delivered€12.9 million

Value created on assets€28 million

Net profit attributable to equityholders €11.8 million

Operational Review – Sierra Management

With Europe experiencing a degree of economic stability, 2006was a positive year in terms of tenant sales, with ten centres beingleased simultaneously.

Mediterranean Cosmos

Added three new centres to managedportfolio in Portugal and Spain

Began leasing activities for ten centresunder development

Achieved almost 99% leasing ofPlaza Mayor Shopping

Alexa in Berlin more than 88% leased

Visitor flow and tenant salessubstantially increased atMediterranean Cosmos

Sierra Managementis responsible for managing, marketing and letting

a portfolio of shopping and leisure centres ownedin Europe by Sonae Sierra and third parties.

Business activities

Sierra Management is responsible formanaging, marketing and letting a widerange of shopping and leisure centres – eitherowned by Sonae Sierra or by third parties –in Portugal, Spain, Italy Greece and Germany.

Our role is to maintain vital links betweenowners and tenants and thus contribute toSonae Sierra profits through the variousmanagement services we provide in theshopping centres we are responsible for.

As a pioneer in our sector, we have longrecognised that services like these must bemaintained at the highest levels if theshopping centres in our care are to increasein value over time. This approach isparticularly important in matters relatingto tenant mix, where we have achievedsome notable successes.

Sierra Management in 2006

2006 was a year of consolidation for SierraManagement. We added three new centresto our portfolio – RioSul in Seixal, Portugal,Alcala de Guadaira Retail Park near Seville andLa Trocha in Cocha, near Malaga, in Spain –and we began the leasing activities for tencentres under development. These includedLima Retail Park at Viana do Castelo and 8ªAvenida at S. João da Madeira, both inPortugal, Plaza Mayor Shopping and El Rosal,in Spain, Freccia Rossa, Gli Orsi and LeTerrazze in Italy, Alexa and Weiterstadt centresin Germany, and the former Galatsi OlympicHall in Athens, Greece.

RioSul, is owned by Sonae Sierra, both Alcalade Guadaira Retail Park and La Trocha areowned by third parties.

António CasanovaSonae Sierra Executive Director,Key Accounts, Marketing andNew Technologies Business

Pedro CaupersSonae Sierra Executive Director,Property Management Europe



The challenge for us is to accelerate our growth in Italy, Germany andGreece. We hope to have seven centres under management in Italyby the end of 2008.


Sierra Management – Performance 06A positive yearWith Europe experiencing a degree ofeconomic stability, and private consumptionpicking up in Portugal after a couple of years’stagnation, as well as in Spain, 2006 was apositive year in terms of tenant sales, withten centres being leased simultaneously.

Portugal remains our most importantoperational territory, with 27 properties undermanagement, of which 17 are owned bySonae Sierra. However, as the group buildsmore centres in other countries, our portfolio’sweighting towards Portugal will change. Atpresent, our next most important territoriesare Spain, where we have 16 centres undermanagement, and Italy, where we managefour centres.

Our operations in Portugal and Spain arenow very efficient and effective, with bothterritories benefiting from our years ofexperience and our economies of scale.

The challenge for us now is to accelerate ourgrowth in Italy, Germany and Greece, so thatwe achieve critical mass as quickly as possible.We hope to do this in Italy by the end of2008, when we expect to have seven centresunder management. It will take a little longerto reach this number in Germany, althoughwe anticipate managing four centres thereby the end of 2008. We plan to have threecentres under management in Greecebefore 2009.

We will, of course, be enlarging and trainingour local teams in all these three countries,so that we can manage the expected growthefficiently and effectively. We will also sustainour drive for innovative marketing activities atall our centres, including the development ofindividual centre web sites, on-siteentertainment programmes and otherschemes designed to capitalise on ourcustomer data base and increase footfall.

The small reduction in both GLA andcontracts under management is due tothe termination of a number of third-partymanagement contracts. These includeOriocenter in Italy, MN4 and El Teller in Spain,and several Modelo Galleries (supermarketstore galleries) in Portugal, only partiallycompensated for by the new openingsin the Sonae Sierra portfolio.

NorteShopping


Sales and Visits

Visits % 06/05 Sales % 06/052006 2005 total like-for-like 2006 2005 total like-for-like

Portugal 230,417 244,562 -5.8% -0.7% 2,229,748 2,075,652 7.4% 2.4%

Spain 77,049 78,776 -2.2% 1.2% 886,859 870,537 1.9% 6.8%

Italy 7,210 15,911 -54.7% -10.0% 42,281 225,113 -81.2% -20.8%

Greece 7,314 1,534 376.7% 376.7% 118,779 23,045 415.4% 415.4%

Sales in Euro (thousands)

Portugal Spain Italy

GLA owned (000 m2)GLA third-party (000 m2)

197

173

105

107

7313

7

7361

05 06 05 06 05 06Greece

05 06

4646

695 74

4

478

478

6000

4500

3000

1500

096 97 98 99 00 01 02 03 04 05 06

GLA (000 m2)No. of Contracts

349 55

0 625 78

4

853

1,01

5 1,29

3

1,34

2 1,57

6

1,73

2

1,68

2


Collections 2006Collections 2005

99.6

%

99.9

%

98.2

%

97.3

%

95.4

%

96.2

%

90.2

%

Greece

45.1

%

45.1

%


Centres in OperationNew Projects

161

147

119

77

36

120

0

162

Greece

0

114

Germany

Portfolio under management Portfolio under management

Collections Rate Letting (Number of Units)


Sierra Management – Performance 06

SpainIn Spain, we achieved a 98.2% collections indexfor the year. We also added Alcala de Guadairaand La Trocha to our portfolio of centres undermanagement, and continued to strengthen ourlocal management team.By the end of the year, almost 99% of Plaza Mayor Shopping was leased and we were pursuingthe leasing of El Rosal, which is now 74% leased. Both these centres are expected to open inthe fourth quarter of 2007.

ItalyOur activities in Italy were mainlyfocused on consolidating ouroperations and strengtheningour team in readiness for thefuture expansion planned for2007 and 2008.We had a good year for letting activities, having leased some88% of the total GLA of the Freccia Rossa project in Brescia, aswell as most of the large stores of the Gli Orsi project in Biella.

PortugalClearly, the most important event of the yearin Portugal was the opening in March of RioSul,with 99.3% of the total GLA leased.So far as our other centres under management are concerned, a 99.6% collections indexis a fine achievement.

We have also concentrated our efforts on leasing the two projects that will be inauguratedin 2007 – Lima Retail Park, due to open in the Spring, and 8ª Avenida, due to open laterin the year.


GermanyWhile we did not manage any shoppingcentres in Germany at the end of 2006 –although Sonae Sierra has since secured theacquisition of Münster Arkaden – we havebeen active in leasing the company’s twoprojects under construction.Alexa, in Berlin, is now more than 88% leased and we are concentrating our efforts on signingcontracts with top brands as anchor stores for our new project at Weiterstadt, which is due toopen in 2008.

GreeceWe expect to be close to fully let by the summer of2007 at Mediterranean Cosmos, our first shoppingand leisure centre in Greece, where we havesubstantially increased the visitors flow and tenantsales during the past year.

The year aheadOur six new centres – two in Portugal, two in Spain,one in Italy and one in Germany – and the MünsterArkaden centre in Germany will ensure we have abusy year ahead as we work to complete the leasingof all these projects before their inaugurations andtransfer to our management in 2007.The possibility of further acquisitions – which may enlarge our geographical scope – also suggests thatwe may see additional growth in our management portfolio.

Our overall ambition is to become the best pan-European shopping centre management company by2010. We believe we are already the best in Iberia and that we must step up to the same level in Italy,Germany and Greece.


An increase in our business activity through new centre openings inPortugal and Spain resulted in total income growing by 3% overallbetween 2005 and 2006.


Operating costs, including staff costs, grew by2% in 2006. Since the back-office costs weretransferred to the new corporate centre, thesmall difference is justified by an increase inproperty management costs. This cost growthwas due to the staffing-up of operations inItaly, Greece and Germany, where few or nooperating shopping centres exist. The benefitsof the economies of scale will be felt in thefuture, with the expected increase in theportfolio under management.

As a result of the growth of the SierraManagement structure, operational profits(EBITDA) increased by only 6% between 2005and 2006. However, Net Profit increased by37%, due to a reduction in depreciation andan increase in financial income.

Sierra Management 2006Net Profits

Sierra Management contributed € 4.5 millionto Sonae Sierra’s consolidated profit.

An increase in our business activity – throughnew centre openings in Portugal and Spain –resulted in total income growing by 3%overall between 2005 and 2006. The existenceof several major projects scheduled to openin 2007 in Germany, Italy, Spain and Portugalcontributed with an 8% increase in lettingservices income. The sharp decrease in otherincome is justified by the transfer of the back-office services to the new corporate centre,with both its income fees and costs having aneutral impact on results.

Luz del Tajo

Sierra Management – Financial Report 06


Sierra Management Profit & Loss Account (€ 000)

2006 2005 % 06/05

Property Management Income 24,008 22,171 8%Letting Services Income 4,151 3,861 8%Other Income 3,215 4,528 -29%

Total Income from Management Services 31,374 30,560 3%

Operating Costs 24,801 24,331 2%

EBITDA 6,573 6,229 6%

Depreciation and Provisions 830 1,412 -41%Net financial costs/(income) (938) (728) -29%Non-recurring costs/(income) (62) 170 -136%


Corporate taxes 2,253 2,151 5%


Attributable to:Equity holders 4,424 3,226 37%Minority interests 66 (2) -

Net profit 4,424 3,226 37%


Sierra Management Consolidated Balance Sheet (€ 000)

31/12/06 31/12/05 var. (06 – 05)

Net Fixed Assets 323 730 -407

Goodwill 6,282 7,099 -816

Tenants 12,665 11,763 901

Tax Shelter 333 202 131

Other Assets 8,253 11,429 -3,177

Deposits 20,564 16,393 4,171

Total Assets 48,420 47,617 803

Net Worth 4,246 6,114 -1,869

Minorities 64 12 52

Shareholder Loans 0 0 0


Total Liabilities 44,111 41,491 2,620

Net Worth, Minorities and Total Liabilities 48,420 47,617 803


Income from managementservices €31.4 million

EBITDA €6.6 million

Net profit of €4.5 million,representing a growth of 39%,of which €4.4 millionattributable to equity holders

Operational Review – Sonae Sierra Brazil

The inauguration of the final phase of the new Shopping Campo Limpo addsanother valuable asset to our portfolio, which includes the Parque D. Pedrocentre, above.

Parque D. Pedro

New partnership formed with Developers Diversified Realty,one of the United States’ largest REITs

Opening of the final phase of Shopping Campo Limpo

Shopping Campo Limpo first shopping centre in Brazil toachieve the ‘green’ ISO 14001 certification

New project begun in Manaus, capital of the State of Amazon

Sonae Sierra Brazilis a 50/50 partnership between Sonae Sierra and DDR,where both partners have agreed to jointly implement their shopping and leisure centres

businesses in Brazil. The partnership is focused on owning and managing shoppingand leisure centres in Brazil, as well as on developing new projects in this sector.

Business activities

Sonae Sierra Brazil has recently become thepower base for the Brazilian business ofSonae Sierra and Developers Diversified Realty(DDR), one of the largest REITs in the UnitedStates, which – like Sonae Sierra – is alsofocused on the shopping and leisurecentre sector.

The 50/50 partnership owns and operatesa total of nine income-generating shoppingcentres – eight located in the State of SãoPaulo area and one in Brasilia – offering atotal of 1,846 stores.

Sonae Sierra Brazil’s aim is to become oneof Brazil’s leading companies and a partnerof choice in the shopping and leisure centresector. This objective is being achievedthrough a combination of organic growthand acquisition, which is being acceleratedfollowing the acquisition of 50% of SonaeSierra Brazil by DDR.

While many international investors have, untilrecently, perceived Brazil as a too risky market,the country’s current and forecast economicsituation has significantly improved. As aresult, there is a growing interest in Brazilamongst several major internationalinstitutional investors.

We anticipate that, as the shopping centremarket matures over the coming years and

the economic conditions change, moreinternational real estate investors willbe encouraged to include Brazil intheir portfolios.

Sonae Sierra Brazil in 2006

For Sonae Sierra Brazil, the most significantevent of 2006 was the establishment inOctober of a new partnership, on an equalfooting, between Sonae Sierra SGPS andDevelopers Diversified Realty (DDR), a highlysuccessful United States shopping and leisurecentre developer and one of the country’slargest REITs, which is listed on the New YorkStock Exchange.

This new partnership, which – as we reportedlast year – we had been seeking for sometime, was created through DDR’s acquisitionof 50% of our Brazilian business. Since theratification of the partnership and thecompletion of the resultant restructuringprocess, the shareholding in the new jointventure – known as Sonae Sierra Brazil BV –is split 50/50 between Sonae Sierra SGPS S.A.and DDR. Sonae Sierra Brazil BV holds 49%of the equity in Parque D. Pedro shoppingcentre and 93% of Sonae Sierra Brasil Ltda,the holding company responsible for all ourBrazilian operations. The other 7% of theequity in Sonae Sierra Brasil Ltda remainswith Enplanta Engenharia, our local partner.

João Pessoa JorgeSonae Sierra Executive Director,Brazil



In line with the increase in occupancy rates, our tenants achieveda significant increase in their sales income. The like-for-like figureof 15.1% is much higher than the inflation rate for the year.


DDR’s investment in the joint ventureamounted to some R$300 million. The twocompanies, Sonae Sierra and DDR, agreedto contribute up to R$300 million each,thus creating a commitment to the newpartnership of some R$600 million, to beused for acquisitions or development projectsin Brazil over the next three years.

We are confident that this new venturewill not only strengthen Sonae Sierra Brazil’sfinancial base and standing in the Brazilianmarket, it will also do much to accelerateour development programme over the nextthree years.

Parque D. Pedro

Sonae Sierra Brazil – Performance 06New São Paulo centre opened

The second most important event of the yearwas the opening in November 2006 of thethird and final phase of the development ofShopping Campo Limpo.

Located in one of São Paulo’s fastestgrowing neighbourhood, Shopping CampoLimpo is the result of an investment of €29million by Sonae Sierra Brazil (20%) and TivoliEmpreendimentos e Participações Ltda (80%).The first two phases of this investment werecompleted in October 2005 and July 2006,while the third and last phase was completedin November.


Open Market Value Figures in Euros (thousands)

Open Market Value OMV Variation OMV VariationShopping Centres in Operation 31 Dec. 2006 31 Dec. 2005 Total %

Boavista Shopping 20,576 18,687 1,889 10%Franca Shopping 5,953 3,814 2,139 56%Parque D. Pedro 150,694 135,601 15,092 11%Pátio Brasil Shopping 6,875 3,073 3,801 124%Plaza Sul 9,141 8,116 - -Shopping Metropole 4,542 1,875 2,666 142%Shopping Penha 27,166 22,770 - -Tivoli Shopping 4,303 1,675 2,628 157%Shopping Campo Limpo1) 20,304 0 20,304 -

Total 249,552 195,611 53,942 28%

1) Phase I opened in 2005 and Phases II and III in 2006

Shopping Campo Limpo is a good exampleof our commitment to the environment andBrazilian society. Not only is it the firstshopping centre in Brazil to achieve ISO14001 certification – the ‘green’ ISO – forits construction but its development was alsothe subject of a special campaign which gavepriority to the community it serves.

Higher occupancy rates andOMV growth

During 2006 we achieved an increase in ouroccupancy rate, in terms of area, from 84.4%to 94.0%, including the new ShoppingCampo Limpo, which has a occupancy rateof 89.1% as at the year end. On a strictlylike-for-like basis, our occupancy rateincreased from 84.4% to 94.3%.

Our results for the year also benefited from asubstantial increase in the value of our assets.The significant increases in the Open MarketValue (OMV) in Euros, of our stake in theassets in our portfolio is due to three factors:the effects of foreign exchange rates; theimproved performance of our shopping centres;and yield compression in the Brazilian market.

Tenant sales up

In line with the increase in our occupancyrates, our tenants have achieved a significantincrease in their sales income. When weinclude Shopping Campo Limpo, the figuresare up by 19.2%. The like for like increasestands at 15.1%, which is much higher thanthe Brazilian inflation rate of around 3.8%for the year.

Much of this success is due to the way weconduct annual market studies in ourindividual centres and their catchments areas,and to our development of specific marketingand strategic plans for each shopping centre.In every case, our aim is to improve theirperformance and increase traffic and sales.

We also develop commercial strategies that aimto increase our occupancy rate and bring in newtenants and new operations that will make ourshopping centres more attractive, more profitableand – as a result – more valuable as assets.

Medium term goalAfter several years of neglect by foreigninvestors, Brazil is finally becoming oneof the markets of choice. Several foreigninvestors are betting on the Brazilian realestate market, and the shopping centre sectoris enjoying a consolidation process as manyof the new international partnershipsannounce their willingness to grow theirbusinesses in Brazil.

We believe that, in three to five years’ time,there will be just six or eight major players inthe shopping centre sector. Our plan over thenext three years is to double the size of SonaeSierra Brazil’s net assets so that we becomeone of the major two.

Our big challenge, with some R$600 millionto invest, is to find the right product. Thismeans looking for new developments orexisting shopping centres where we couldeither buy a new participation and get thecorresponding property managementcontract, or increase our present participationand retain the property management.

Short term outlookDespite these challenges, we expect to seefurther growth in our total revenues and salesover the coming year.

On the acquisition front, we foresee newmoves either in shopping centres already inour portfolio, or in new properties.

On the development front, in the secondquarter of 2007, we are planning to start theconstruction of our tenth shopping and leisurecentre, located in Manaus, the capital of theState of Amazon, where we are investingapproximately €58 million in some 43,000 m2

of GLA arranged over three floors, with 250shops and 2,700 parking places. We alsoexpect to close a new deal for a new projectdevelopment.

We are also putting great efforts into increasingthe occupancy rates of our shopping centres,particularly in Boavista Shopping, ShoppingPenha and Shopping Campo Limpo.

Sonae Sierra Brazil’s contribution to SonaeSierra’s consolidated profits was €21.5 million.

Sales and Visits

Visits % 06/05 Sales % 06/052006 2005 total like-for-like 2006 2005 total like-for-like

Brazil 79,718 82,904 -3.8% -3.8% 826,822 693,472 19.2% 15.1%

Figures in Euros (thousands)Visits in thousands

Rents

Fixed rents Variable rents Total rents % 06/05 rents2006 2005 2006 2005 2006 2005 total like-for-like

Brazil 41,177 33,101 2,502 2,238 43,680 35,339 23.6% 17.7%

Figures in Euros (thousands)

Occupancy Rate

Occupancy rate2006 2005

Brazil 94.3% 84.4%


Our retail operating income grew by 39% during 2006 while the yearalso saw a 46% increase in our operating margin.


Income from our property managementbusiness grew by 84% during 2006 as aresult of the increase in our portfolio createdby the addition of Shopping Plaza Sul, higheroccupancy rates in several of our shoppingcentres and the reorganisation that includesEnplanta Engenharia roll up.

Indirect profit

Indirect profit, which reached €10.2 million,represents the growth in Open Market Value(OMV) of our assets in 2006. Asset valuationwas positive, as explained above.

Balance sheet

The improvement in the exchange rate of theReal, together with a net profit of €21.5 millionand the positive property valuations, led to anincrease in the net worth of €10.5 million.The value of Investment properties hasbenefited from the positive effect of a betterexchange rate, as this demonstrates.

Sonae Sierra Brazil 2006Net Profits

Sonae Sierra Brazil contributed with €21.5million to the Consolidated Net Profit ofSonae Sierra, almost five times more thanin the previous year.

Direct profit

In our investment business, retail operatingIncome grew by 39% during 2006. Thissuccess owes much to the first full year ofoperations of Shopping Plaza Sul and goodperformance of Parque D. Pedro, an overallincrease in the occupancy rates and thepositive evolution of the Real exchange rate.The year also saw a 46% increase in ouroperating margin.

The development business has had a stableyear with a 2% increase in income.

Shopping Penha

Sonae Sierra Brazil – Financial Report 06


Sonae Sierra Brazil Profit & Loss Account (€ 000)

2006 2005 % 06/05

Fixed Rental Income 21,780 16,260 34%Turnover Rental Income 1,557 1,063 47%Key-Money Income 1,768 773 129%Other Income 868 624 39%

Retail Operating Income 25,973 18,720 39%

Property Management Services 1,050 682 54%Letting & Promotion Services 997 972 3%Other Costs 5,013 4,061 23%

Retail Operating Costs 7,060 5,715 24%

Parking Net Operating Margin 210 49 328%

Shopping Net Operating Margin 19,123 13,054 46%

Income from Project Development Services 154 151 2%Income from Property Management Services 3,410 1,857 84%

Total Income from Services Rendered 3,564 2,008 78%

Overheads 4,933 3,611 37%

EBITDA 17,753 11,450 55%

Depreciation 78 84 -7%Provisions 1,189 2,561 -54%Net financial costs/(income) 1,534 1,689 -9%Non-recurring costs/(income) 475 164 189%


Corporate taxes 3,092 794 289%

Direct Profit 11,385 6,158 85%

Realised Property Profit (3,623) 0 -Non -Realised Property Profit (Inv. Propert.) 27,266 (14,386) 290%Non -Realised Property Profit (Under Dev.) 0 (751) -

Total Indirect Income from Investments 23,644 (15,137) 256%

Deferred tax 13,492 (13,562) 199%

Indirect profit 10,151 (1,576) -


Attributable to:Equity holders 20,476 4,419 363%Minority interests 1,060 163 -


Sonae Sierra Brazil Consolidated Balance Sheet (€ 000)

31/12/06 31/12/05 var. (06 – 05)

Properties 233,352 196,782 36,570

Tenants 4,107 3,932 175

Tax Shelter 6,399 6,370 29

Other Assets 4,541 6,287 -1,746

Deposits 5,952 6,894 -942

Total Assets 254,351 220,264 34,086

Net Worth 207,708 197,187 10,521

Minorities 10,401 3,157 7,244

Bank Loans 953 413 541

Shareholder Loans -88 2,361 -2,449

Deferred Taxes 27,980 13,292 14,688


Total liabilities 36,242 19,921 16,321

Net Worth, Minorities and Total Liabilities 254,351 220,264 34,086


Shopping centre operating marginup by 46% to €19 million

EBITDA increased by 55%to €17.8 million

Net profit of €21.5 million,representing a growth of 370%,of which €20.5 million attributableto equity holders

Accounts

Net profits totalled a record €271 million while the return for ourshareholders reached 19.7%, some way above our long-termaverage of 13%.

AlgarveShopping

Total net profits up 23% at €271 million

EBITDA increased by 20% from €125.7 millionto €150.3 million

Net Asset Value (NAV) increased by €225.5 million or 18%

Leveraging of portfolio decreased from 31.9% to 29.4%loan-to-value

Interest cover ratio maintained at 2.81 level

Sonae SierraConsolidated Accounts

In purely financial terms, 2006 was one of the best years in Sonae Sierra’s history.

Our net profits totalled a record €271 millionwhile the return for our shareholders equityreached 19.7%, some way above our long-term average of 13%.

The leveraging of the company’s portfoliodecreased from 31.9% to 29.4% loan-to-value and we are still far from our target of50%. This gap is a reflection of two maintrends. On the one hand, property valuescontinue to increase at a steady pace, whichreduces leveraging. On the other, portfoliogrowth through acquisitions is below ourobjectives. As a consequence, we continueto hold significant levels of liquidity in ourbalance sheet.

Overall, the shopping centre market is stillperceived as extremely attractive in ourchosen markets, which means there isreduced scope for growth. This is one ofthe main reasons for our in-depth analysisof new markets in Central Europe.

We have always taken a long-term viewof financial performance and believe that,if we are to sustain our performance over themedium-term, we must maintain a rigorouscost-control discipline. At the same time, weneed to invest for the future in innovation,new skills and capabilities in our teams, aswell as in new information systems.

Ratios31/12/06 31/12/05

Asset Gearing 29.4% 31.9%Interest Cover 2.81 2.52Development Risk 21.3% 25.8%

Good year for property

The past year has been good for theproperty sector, as reflected in our resultsand achievements.

While the role of property as a mainstreamasset class has been reflected in prices in themarkets, interest rates in the Eurozone – evenafter several increases – remain at levels thatare historically low. This has helped supportthe after-debt returns at high levels.

Positive outlook

The property markets are going through a goodphase, which is reflected in yields that – inmany cases – have reached record low levels.

While we maintain a positive view of thesector, we know we must be especiallydisciplined in our approach to acquisitions.We believe there are still interestingopportunities – in new developments, inthe re-positioning of older properties andeven in acquisitions – in selected markets.

José Edmundo FigueiredoSonae Sierra Executive Director,CFO



Our ambitions for 2007 are in line with ourobjectives for the past few years. We aim toimprove our financial performance throughbetter balance sheet management, and tocontribute to the growth of the companyas a whole. In this regard, our team isfocussed on helping the business teamsby rigorously and innovatively assessing theprocesses through which value is createdwithin the company. We know we mustremain focussed on this discipline if weare to succeed in today’s ever morecompetitive markets.

Net Asset ValueIn 2001, the company decided to adoptInternational Accounting Standards (IAS) inthe preparation of its consolidated accounts.This led to the Open Market Value (OMV)of the investment properties being reflectedin the company’s consolidated balance sheet.However, the company does not believe thatthe Net Asset Value (NAV) resulting from sucha consolidated balance sheet truly reflects itsvalue, for two reasons.

In the first instance, under IAS rules, propertiesbeing developed and properties held for saleare not booked at market value. In the caseof Sonae Sierra, shopping centres underdevelopment are therefore booked at historiccost. The undervaluation of these assets canbe significant.

In the second instance, under IAS rules,deferred taxes on unrealised gains oninvestment properties are accounted forin the balance sheet. From the company’spoint of view, the deduction of this deferredtax is arguable, as the transactions of CoimbraRetail Park in Coimbra, Serra Shopping inCovilhã, and RioSul in Seixal, all of which arein Portugal, have once again confirmed. Whena property is sold, the market practice is notto sell the property as such, but to sell theholding company which owns it. Moreover,in various jurisdictions, capital gains arisingfrom the sale of shares are sheltered from tax.

For these reasons, the company calculates andpublishes an NAV which results from valuing allits properties at Open Market Value and doesnot include a deduction for deferred taxes onunrealised capital gains. Neither does the NAVinclude the value of its operating businesses,other than that resulting from acquisitions.

The calculation now presented is consistentwith the NAV calculation published inprevious years.

The NAV on 31 December 2006 of theproperties attributable to Sonae Sierra was€1,490 million compared with €1,265 millionon 31 December 2005. The NAV per share ofthe properties attributed to the company is€45,82 against €38,90 on 31 December2005, an increase of 17.8%.

Nav per share

0

10

20

30

40

50

Dec

01

Dec

02

Dec

03

Dec

04

Dec

06

Dec

05

NAV (€ million)

934

1,03

7

948

1,06

0

1,49

0

1,26

5


Net Asset Value (NAV) 2006

Total

Open market value 3,245,656

Investment properties 2,771,845

Properties under development & others 473,811

Total bank debt -1,294,504

Cash & Deposits 332,313

Minorities -613,236

Other net liabilities -156,299

Dividend paid -24,028

NAV 2006 1,489,901

Figures in Euro (thousands)

Total direct income from investment increased by €21.9 million to€242 million, reflecting the growth in the company’s portfolio duringthe year.

Accounts

Avenida M40


Consolidated Profit andLoss Accounts

The total direct income from investmentsincreased by €21.9 million, from €220.2million to €242 million. This reflects theincrease in the portfolio resulting mainly fromthe full year effect of the four inaugurationsin 2005, the opening of RioSul in Seixal inPortugal and full year effect of the 2005acquisition of Valecenter in metropolitanVenice, and Airone near Padova, both in Italy.These favourable effects were partially offsetby the 50% sale of the Brazilian portfolio inOctober 2006 with the consequent changein the consolidation method, from fullconsolidation to proportional consolidation.

The company presented an indirect profitfrom investments of €187 million resultingfrom the increase in the OMV of theinvestment properties and the gains fromthe opening of shopping centres during 2006.During the same period, the market yieldshave fallen, resulting in a considerableincrease in value of the investment propertieswhich are part of the company’s portfolio.

Sierra Developments recognises as non-realised gains the margins in the projectsunder development, but these margins arenot recognised at Sonae Sierra consolidatedlevel, given that, under IAS rules, the valuecreated is only recognised at the time of theopening of the shopping centre.

The company also realised the followingtransactions (net loss of €13.9 million):

• Sale of 50% of Sonae Sierra Brazilto DDR

• Sale of 100% of Avenida M40to the Sierra Fund

• Sale of 100% of Zubiarte to theSierra Fund

• Write-off of 3do project, in Germany

The transactions completed during 2006have confirmed, once again, that the OpenMarket Value, less company liabilities andexcluding the deferred taxes, reflects theNet Asset Value.

The total net profit attributable to minoritieshas also increased by 55% to €110 millionand corresponds, almost exactly, to the directand indirect profits attributable to the SierraFund’s external investors.

Consolidated Balance Sheet

The total assets amounted to €3,602 millionat the end of 2006. This represents anincrease of €397 million compared with theprevious year, and results mainly from anincrease in the investment portfolio arisingfrom the openings and the value created inthe existing portfolio, partially compensatedby the 50% sale of all the properties in Brazil(consolidated by the proportion methodinstead of the full method in the previousyear) and to the higher amount of propertiesunder development.

The increase in bank debt for the yearamounts to €97 million and results from there-financing policy for operating investmentproperties and the financing of the projectsunder development. During the 2006 year,several operating shopping centres were re-financed – Parque Principado, GaiaShopping,Arrábida Shopping and Serra Shopping.

The development risk, measured as theamount invested and to be invested toconclude projects under developmentas a percentage of total assets, plus theamount needed to conclude those sameprojects, reduced from 25.8% to 21.3%,due to the new openings during the year.

The minority interests result, mostly, fromthe external investor shareholdings at theSierra Fund.


Sonae Sierra Consolidated Profit and Loss Account (€ 000)

2006 2005 % 06/05

Direct Income from Investments 242,052 220,175 10%

Operating costs 84,773 82,983 2%

Other costs 6,974 11,532 -40%

Direct costs from investments 91,747 94,516 -3%

EBITDA 150,305 125,659 20%

Depreciation 1,950 1,743 12%

Recurrent net financial costs 44,162 39,049 13%

Non recurrent net financial costs –

Direct profit before taxes 104,193 84,867 23%

Corporate tax 20,548 16,084 28%

Direct net profit 83,645 68,783 22%

Indirect Income from gains on sale of Investments -13,861 24,378 -157%

Indirect Income from valuation of Investments 269,892 183,753 47%

Indirect income 256,031 208,131 23%

Deferred tax 69,094 57,440 20%

Indirect net profit 186,937 150,691 24%

Total Net Profit 270,583 219,474 23%

Attributable to:Equity Holders 160,318 148,149 8%Minority Interests 110,265 71,324 55%


Sonae Sierra Consolidated Balance Sheet (€ 000)

31/12/06 31/12/05 Var. (06 – 05)

Investment properties 2,729,662 2,491,398 238,264

Properties under development and others 354,544 254,910 99,634

Goodwill 51,345 52,346 -1,001

Deferred taxes 25,483 27,673 -2,190

Other assets 108,742 121,843 -13,101

Deposits 332,313 256,841 75,471

Total assets 3,602,089 3,205,011 397,078

Net worth 1,142,894 1,002,154 140,741

Minorities 405,513 298,896 106,617

Bank loans 1,294,504 1,196,942 97,562

Shareholder loans from minorities 64,255 77,254 -12,999

Deferred taxes 468,792 402,727 66,065

Other liabilities 226,131 227,039 -908

Total liabilities 2,053,682 1,903,962 149,720

Net worth, minorities and liabilities 3,602,089 3,205,011 397,078



Sonae Sierra’s Corporate Responsibility (CR)strategy is fundamental to achieving ourmission. In the past year, we have reviewedthe focus of our CR Strategy, to prioritiseefforts on those issues that represent thegreatest business challenges or opportunities.

Through a series of tests, we have identifiedthe following issues as being the mostmeaningful to our business in the short tomedium term:

• Climate change

• Land use

• Water

• Waste

• Safety & Health

• Community relations (including visitors)

• Business chain (suppliers and tenants)

• Employees

The table on page 52 identifies what weconsider to be the principal risks andopportunities associated with these particularissues. In keeping with our rigorous approachto risk management, we continue to put inplace measures that both minimise our riskprofile and maximise our ability to create andsustain value in the long-term.

During 2006, we continued to govern our CR activities under the overall supervision ofa CR Working Group made up of seniorrepresentatives across different disciplines andcountries of operation. In January 2007, weintroduced a revised governance structure, witha CR Steering Committee overseeing the entirestrategy, and individual CR Working Groups toaddress each of the eight material issues listedabove, as well as additional Working Groupsfor Brazil and Risk Management. This shouldensure more embedded ownership andresponsibility for these areas across the business.

The Personæ project won the 2006 ECO award for ‘Corporate SocialResponsibility – Internal Public’, presented by the American Chamberof Commerce in Brazil

Corporate Responsibility

Sonae Sierra – Corporate Responsibility

Centro Vasco da Gama

Awarded ten new ISO 14001certifications

Joined the core group of theWorld Business Council forSustainable Development’s project,Energy Efficiency In Buildings

Risk managementAt Sonae Sierra we have identified social and environmental risks facing the business alongsidefinancial, technological, political and governance risks both today and in the future. Interestingly,the results of this exercise suggest that we face as many social and environmental risks as we dofinancial, and that these three categories of risk are more significant than the others.

During the year, risk management controls were implemented as follows:

• Environmental, insurance, technical, legal, fiscal and financial audits were performed on theshopping centres which opened during 2006.

• Environmental management procedures were implemented in all our shopping centres in allthe countries where Sonae Sierra operates.

• Security audits were carried out on all the shopping centres in all the countries where SonaeSierra operates, and corrective actions implemented.

• Bi-annual real-time simulations of emergency procedures, including fire and bomb threats andthe total evacuation of the building, were undertaken in operating centres during openinghours with the participation of the relevant local authorities, including the police, fire-brigades, and civil protection units.

The company maintains a policy of hedging its interest rate risk, generated by the loans tooperating shopping centres, through derivatives with an average period of five years.

Further information on Sonae Sierra’s management of corporate responsibility and its detailedperformance in practice can be found in the Corporate Responsibility Report 2006.

Further details of our environmental performance can be found on our recently re-launchedenvironment portal at www.environment.sonaesierra.com.


Corporate Responsibility


Key Impact Area Issues Business Challenges and Opportunities

Climate Change Carbon Management, Increasing legislation regulating CO2 and other greenhouse gas emissions, particular focusEmissions to air & Transport on buildings, national and international targets.

Long-term physical and financial impacts of climatic disruption on the built environment(e.g. weathering, subsidence, insurance losses, maintenance costs etc).

Increasing media attention and public awareness on climate change and CO2 emissions – higherstakeholder expectations.

Increasing media attention and public awareness on the issue of air quality in relation to human health.

Rapidly growing trend of peer companies pledging to go Carbon Neutral.

Sonae Sierra has a policy commitment to safeguard the environment for both current and futuregenerations; including ‘prevention of pollution and emission reduction’.

Energy Efficiency Rising energy prices; energy efficiency often leads to cost savings and pay-back periods for efficientequipment are becoming shorter.

Increasing legislation regulating energy efficiency, in particular the EU Energy Performanceof Buildings Directive.

Rising energy demands, and greater reliance on imported fuels, results in growing insecurityin energy supplies.

Sierra policy commitment to continuously improve the environmental performance of undertakings,products, processes and activities.

Land Use Use of previously Use of previously developed or ‘brownfield’ land facilitates the obtention of planning permission,developed land and reduces risk of negative response from the local community, thus enhancing corporate brand

and reputation.

May result in cost savings to the company as some necessary components of urban infrastructureare already in place.

Biodiversity Peer group companies increasingly recognise business benefits of conserving biodiversity, as allcompanies rely on functions performed by natural systems. Innovative concepts such as ‘greenroofs’ are more common in the industry due to additional climatisation benefits.

Sonae SGPS policy commitment to safeguard the environment for both current andfuture generations.

Societal norms increasingly require stringent protection of the natural environment (National Plans,legislation, NGO campaigns).

Emissions to land Reputational and financial risk of non-compliance with pollution legislation (e.g. EU EnvironmentalLiability Directive and subsequent national laws).

Environmental and reputational opportunities of remediating previously polluted land, and bringingit back to life through careful restoration techniques.

Water Water efficiency & Water quality Water availability is becoming a major problem in parts of the Mediterranean region, resultingin increasing shortages and strong stakeholder concerns.

Direct short term cost savings from grey water reuse and water saving devices; pay-back periodsfor efficient equipment are becoming shorter.

Waste Waste Production Tightening legislation relating to quantities of waste sent to landfill/recycled in view ofWaste Management national targets.

Direct short term cost savings from reducing landfill charges by recycling and reusing waste fromconstruction and management activities.

Peer group companies increasingly seeking ways of reducing waste sent to landfill and reportingand measuring waste recycled.

Increasing stakeholder concerns and expectations; company can enhance its reputation amongstakeholders if it endeavours to be proactive on the issue of waste management.

Safety & Health Safety and Health of Incidents of non-compliance could damage the reputation of the company amonga employees, tenants & visitors wide-range of stakeholders.

Direct short term financial impact by way of fines for non-compliance.

Policy commitment through the company’s ‘Safety & Health’ policy.

Community Relations Community Consultation Policy commitment to supporting local communities in areas where we invest.

Community Investment Peer companies increasingly seeking to engage with local communities, both at theCommunity Engagement development and management stages.

Visitors to shopping centres Community consultation increases buy-in for our schemes from local people, and speedsup the planning process.

Community investment and community engagement enhance the reputation of the company andincrease number of visitors to shopping centres. Visitor satisfaction is paramount to the continuedfinancial performance of our shopping centres.

Business Chain Tenant Satisfaction Growing stakeholder expectations for companies to implement responsible procurement practicesSupplier Relations and engage with suppliers/contractors to address their own environmental and social impacts.

Responsible Procurement Tenants’ businesses underpin Sierra’s own business success so engaging with them, and ensuringthat we are responsive to their needs and concerns, is a critical aspect of our service provision.

Employees Employee Engagement Recruiting and retaining the best calibre employees requires the employment of staff friendlyEquality & Diversity policies, and competitive remuneration and benefits packages.

Fair remuneration Continued innovation and improvements are dependent on a learning workforce, with growingEmployee Satisfaction skills and diverse backgrounds.

Employee relations are an important stakeholder concern, and a critical component of corporatebrand and reputation.


Corporate GovernanceA revised organisationWith the aim of improving our efficiency,we have made some changes to the way weorganise and run our business, as outlined here.

The ultimate governing body of the SonaeSierra Group is the Shareholders’ GeneralAssembly, which appoints the Board of theGeneral Assembly, the Fiscal Board, theRemuneration Committee and the Boards ofDirectors of the Sonae Sierra Group and itsoperating companies.

The Sonae Sierra Board of Directors, whichis headed by a Chairman and comprises 11members – of which five are non-executive,including the Chairman – reports to theGeneral Assembly. This Board includes aChief Executive Officer (CEO) and five otherExecutive Directors, each with designatedresponsibilities.

La Farga

The Sonae Sierra Board of Directors hasdelegated some of its corporate decision-making to specialised Committees.

The Executive Committee is chaired by theCEO, as are the Investment Committee andthe Finance Committee. The Audit &Compliance Committee is chaired by anindependent individual.

The Executive Committee has responsibility forSonae Sierra’s day-to-day operations and foractions and decisions which have not beenreserved for the Board of Directors or anotherof the three Committees. This ExecutiveCommittee, whose members include theCEO Álvaro Portela, Pessoa Jorge, EdmundoFigueiredo, Pedro Caupers, Fernando Oliveiraand Antonio Casanova, reports to the Boardand is able to invite other senior executivesand executives of Sonae Sierra to attendits meetings.

The Board of Directors meets five times eachyear. The Investment Committee and theFinance Committee each meet 11 times eachyear and the Executive Committee meetsevery fortnight. The Audit & ComplianceCommittee meets three times each year.


Board of Directors

Belmiro de AzevedoNon-Executive Chairman

Belmiro de Azevedo joined Sonae in 1965as a chemical engineer and in the same yearwas appointed Managing Director. Between1967 and 1984 he was President of the SonaeGroup. He was appointed President of theBoard of Sonae SGPS in 1989.

A graduate in Chemical Engineering fromOporto University, Belmiro also attended aProgramme for Management Developmentat Harvard Business School, a FinancialManagement Programme at StanfordUniversity and a Strategic Managementcourse at Wharton University. He is anHonorary Fellow of the London BusinessSchool and a member of the World BusinessCouncil for Sustainable Development’sOrder of Outstanding Contributors toSustainable Development.

Ângelo PaupérioNon-Executive Director

Ângelo has been a non executive BoardDirector of Sonae Sierra since 2000.

His main executive responsibilities are asExecutive Vice Chairman of the Sonae Groupholding company, Group CFO, ExecutiveChairman of Sonae Capital and Sonae Turismo,and Board Director of Modelo Continente,all of which are sub holdings of Sonae.

He graduated as a Civil Engineer from PortoUniversity and has an MBA from PortoManagement School.

Jeremy NewsumNon-Executive Director

Jeremy Newsum is Group Chief Executive ofGrosvenor, the international property company.

Jeremy originally joined Grosvenor in 1976,having graduated from Reading University.He left the company after two years, butreturned in 1987 and was appointedChief Executive in 1989.

As a specialist in real estate investment anddevelopment, he is a director of TR PropertyInvestment Trust Plc, a member of the Councilof Imperial College London and a Trustee ofthe Urban Land Institute.

Non-Executive Directors

Neil JonesNon-Executive Director

Neil Jones is Chief Executive of GrosvenorContinental Europe. He is based in Paris,from where he oversees all the company’soperations, including the work of their officesin Madrid and Milan.

Neil joined Grosvenor in 1997 and hasworked in London, Brussels and Hong Kong.He is a non-executive director of Sonae SierraSGPS and executive director of GrosvenorGroup Ltd.

Benoit Prat-StanfordNon-Executive Director

Benoît Prat-Stanford has been with Grosvenorsince 2000 and is the Finance Director forContinental Europe. His career includes aperiod as military attaché to the FrenchEmbassy in Italy. He has also worked forArthur Andersen and United Technologies.

With a Business degree and an MBA gained in Boston, he has lived and worked in Paris,Boston, Rome, Brussels and London.


Executive Directors

Álvaro PortelaChief Executive Officer

Álvaro Portela was appointed CEO of SonaeSierra in 1999. His particular responsibilitiesinclude Safety & Health, CorporateCommunications, Environmental & InstitutionalRelations, Investments & Asset Management.

Álvaro has a degree in MechanicalEngineering from the Faculdade deEngenharia da Universidade do Porto,an MBA from the Universidade Nova deLisboa and an AMP/ISMP from HarvardBusiness School.

João Pessoa JorgeDirector, CEO of Sonae Sierra Brazil

João Pessoa Jorge joined the Sonae Group in1983 and was one of the executives involvedin starting the Group’s Real Estate business.Since 1998 he has been living in São Paulo,where he is responsible for all aspects of thecompany’s business in Brazil.

João has a degree in Civil Engineering gainedat the University of Porto and a MBA fromKent State University in Ohio.

Edmundo FigueiredoDirector, CFO

Edmundo Figueiredo is the CFO of SonaeSierra and a member of the Sonae GroupFinance Committee. His particularresponsibilities include Internal Audit; Legal,Fiscal and Mergers & Acquisitions; Finance,Planning & Control; HR & Back-Office.

Edmundo joined the Sonae Group in 1989,as Financial Controller of the company’sReal Estate activities, which later becameSonae Sierra.

He has a degree in Finance from the LisbonSchool of Economics (ISCEF).

Pedro CaupersDirector, Property Management and Leasing

Pedro Caupers joined Sonae Sierra in April1997 and was appointed Board Director in1999. He is responsible for all PropertyManagement and Leasing activities acrossthe European markets where Sonae Sierrais active.

Pedro has a degree in Electrical Engineeringfrom Instituto Superior Técnico, a PhD fromParis University and an MBA from INSEAD.

Fernando Guedes OliveiraDirector, Developments Europe.

Fernando Oliveira joined the Sonae Group in 1984 and moved to Sonae Sierra in 1991.He was Project Leader of two of the company’saward-winning shopping Centres: ViaCatarinaand Centro Vasco de Gama. Currently he is responsible for the implementation ofSonae Sierra’s shopping and leisure centredevelopment programme in Europe.

With a degree in Civil Engineering from theUniversity of Porto and an MBA from ISEE,University of Porto. Fernando also gainedan AMDP at Harvard Business School.

António CasanovaDirector, Marketing, Key Account Management and New Technologies

António Casanova joined Sonae Sierra in1998, having previously been CEO ofOptimus, a mobile phone joint venturebetween Sonae Group, Orange and EDP,Portugal’s electricity utility.

He was appointed a Board Director of SonaeSierra in 2005 and has particular responsibilitiesfor Marketing, Key Account Management andNew Technologies.

António has a BSc from the London School of Economics, an MBA from UniversidadeNova de Lisboa and a AMP from HarvardBusiness School.


Other Executives

Ana Guedes OliveiraResponsible for Investment and Asset Managementin Europe

Ana Guedes Oliveira joined Sonae Sierra in1987 and later took over the development of two major shopping centres in Portugal,. In 1999 she moved to portfolio managementand is now in charge of the company’sinvestment division. She has particularresponsibilities for the portfolio of shoppingcentres in Europe. She also acts as manager of the Sierra Fund, of which 50.1% is ownedby Sonae Sierra.

Ana has a degree in Civil Engineering fromthe University of Porto, an MBA from ISEE,University of Porto and an AMP from INSEADin France.

Adrian FordResponsible for Expansion in Europe (except Iberia)

Adrian Ford has worked with Sonae Sierrasince its inception. He assumed responsibilityfor the company’s new business in Europeoutside of Iberia in 1998.

Adrian studied business studies at PlymouthPolytechnic and has a Masters Degree inManagement and Business Studies from theUniversity of Warwick.

Joaquim Pereira MendesResponsible for Legal, Tax, Mergers & Acquisitions

Joaquim Mendes joined Sonae Sierra in 1989.He is responsible for the Legal, Tax, Mergersand Acquisitions activities of Sonae Sierra.

Joaquim has a law degree gained at theFaculdade Direito Universidade Coimbrain 1980 and is a visiting professor atUniversidade Portucalense in Porto.

José QuintelaResponsible for Conceptual Development andArchitecture

José Quintela joined Sonae Sierra in 1987and has since led the team responsible forthe concept and design of all the company’sshopping and leisure centres. He is currentlyinvolved in more than 14 projects at differentstages of development in all the countrieswhere Sonae Sierra is active.

José has a degree in Architecture, an MBAfrom Universidade Nova de Lisboa and anAMP from Harvard Business School.

José Falcão MenaResponsible for Development in Iberia

José Mena has been responsible for thecompany’s expansion in Iberia since 1998 and for its development in the same regionsince 2004.

José has a degree in Civil Engineering fromPortugal’s Instituto Superior Técnico and a post-graduate qualification in Managementfrom the Instituto Superior de Ciências doTrabalho e da Empresa. He is also successfullycompleted an Advanced Marketing Programmefor Executives at the Universidade Católica de Lisboa.

Luís Carvalho MarquesResponsible for Human Resources and Back Office

Luis Carvalho Marques joined Sonae Sierrain 1992. His previous career as an army officerhad focused on administration, teaching andtraining. Since 1998, his responsibilities atSonae Sierra have covered all facets of thecompany’s human resources and back officefunctions, including information systemsand logistics.

With degrees in Military Sciences andBusiness Administration, the latter gained atthe Instituto Superior de Ciências do Trabalhoe da Empresa (ISCTE), Luis is a qualifiedChartered Accountant and, for 16 years,was visiting professor of Auditing andAccounting at ISCTE.


João Correia de SampaioResponsible for Management in Portugal and Spain

João Correia de Sampaio joined Sonae Sierrain 1992 following a military career duringwhich he taught at the Portuguese MilitaryAcademy and was commanding officer ofseveral operational and training units.

He is currently Managing Director of SierraManagement Portugal and Sierra ManagementSpain, with responsibilities for the managementand leasing of 33 shopping centres, four retailparks and several small retail galleries acrossthe Iberian peninsular.

João has a degree in Military Sciences gainedat the Academia Militar in Lisbon and an MBAfrom Universidade Nova de Lisboa.

Pietro MalaspinaResponsible for Developments in Italy

Pietro Malaspina joined Sonae Sierra at the endof 2000 and has since been responsible for thecompany’s development business in Italy. From2003 to 2006, he was a member of the ICSCEurope Advisory Board and is currentlyPresident of its Italian branch, CNCC.

Pietro has lived and studied in Italy and theUnited States. He has a degree in PoliticalSciences from the Sacred Heart CatholicUniversity in Milan.

Joaquim RibeiroResponsible for Finance, Planning and Control

Joaquim Ribeiro joined the Sonae Group in1985, starting in the holding company andthen moving to Sonae Indústria. From there,he moved to London for six years to work forSonae International.

In 1995 he joined Sonae Sierra to workin the financial department, becomingDirector, Finance, Planning and Control,in 2006.

Joaquim has a degree in Economics fromFaculdade de Economia do Porto, an MBAfrom Universidade Nova de Lisboa and anMSc in Property Investment from the CityUniversity, London.

Ingo NissenResponsible for project management in Germany

Ingo Nissen joined Sonae Sierra in 2000, when the company began operations inGermany, and he was appointed as projectmanager. In 2005 he was appointed Director,Development Germany, with particularresponsibilities for the project management in that country.

Ingo has a degree in Civil Engineering fromthe Technical University in Braunschweig. He gained his PhD at the Technical Universityin Munich.

Thomas BinderResponsible for Developments in Germany

With more than 20 years’ experience gainedin project and lease management in theGerman shopping centre, business parks andcommercial property sector, Thomas Binderjoined Sonae Sierra as CEO of Sonae SierraDevelopments Germany GmbH in 2006.

Thomas has a degree in German law fromthe Universities of Berlin, Bochum and Kiel,and a real estate management degreegained at Wirtschaftsakademie Kiel.


Our operating portfolio

SpainPlaza Mayor (Malaga)

Grancasa (Zaragoza)

Max Center (Bilbao)

Valle Real (Santander)

La Farga (Barcelona)

Parque Principado (Oviedo)

Dos Mares (San Javier, Murcia)

Avenida M40 (Madrid)

Luz del Tajo (Toledo)

Zubiarte (Bilbao)

Plaza Éboli (Pinto, Madrid)

PortugalCascaiShopping (Cascais)

CoimbraShopping (Coimbra)

GuimarãeShopping (Guimarães)

GaiaShopping (Vila Nova de Gaia, Porto)

ViaCatarina (Porto)

MaiaShopping (Maia, Porto)

Centro Colombo (Lisboa)

NorteShopping (Matosinhos, Porto)

Centro Vasco da Gama (Lisboa)

MadeiraShopping (Funchal, Madeira)

AlgarveShopping (Guia, Albufeira)

Arrábida Shopping (Vila Nova de Gaia, Porto)

Parque Atlântico (Ponta Delgada)

Estação Viana (Viana do Castelo)

LoureShopping (Loures)

Serra Shopping (Covilhã)

BrazilShopping Penha (São Paulo)

Shopping Franca (Franca, SP)

Shopping Metrópole (S. Bernardo do Campo, SP)

Pátio Brasil (Brasília, DF)

Tivoli Shopping (Santa Bárbara, SP)

Parque D.Pedro (Campinas, SP)

Boavista Shopping (Stº Amaro, SP)

Shopping Plaza Sul (São Paulo)

Shopping Campo Limpo (São Paulo)

ItalyValecenter (Venice)

Airone (Padova)

GreeceMediterranean Cosmos (Thessalonica)


Our ambitionOur ambition is to be one of the world’sleading companies specialising in theshopping and leisure centre sector, anda preferred partner in any market in whichwe operate.

We aim to explore new markets andother opportunities for expansion,not only through the constant growthof our shopping and leisure centredevelopment pipeline, but also byacquiring new, up-and-running shoppingcentres. We also plan to create newalliances with local partners and influentialinstitutional investors whereverand whenever appropriate.

Our thanksWe would like to thank all our shoppingand leisure centre tenants, our suppliersand the many financial institutions andofficial bodies we have worked withfor their continuing support and trust.Our thanks also go to the certified auditorsfor their co-operation in monitoring ouractivities. Last but not least, we wouldlike to express our appreciation to all ouremployees for their efforts throughout2006. Their contribution is clearly reflectedin Sonae Sierra’s achievements duringthe year.

Our prospectsWe know we will only be able toachieve our future goals by payingclose attention to the way we conductour present business. We also knowwe can continue to climb the ladder ofsuccess by developing and using ourknow-how and imagination, and bymaintaining the highest standardsof professionalism and innovationin everything we do.

PORTUGALPORTOLUGAR DO ESPIDO, VIA NORTE4471 – 909 MAIATELEPHONE: +351 22 948 7522FAX: +351 22 010 4698

LISBOARUA AMÍLCAR CABRAL, 231750-018 LISBOATELEPHONE: +351 21 751 5000FAX: +351 21 758 2813

SPAINC/ CONDE DE ARANDA, 24, 5º 28001 MADRIDTELEPHONE: +34 91 575 8986FAX: +34 91 781 1960

ITALYCORSO MAGENTA 8520123 MILANOTELEPHONE: +39 02 4654 621FAX: +39 02 4391 2531

GERMANYKENNEDYDAMM 5540476 DÜSSELDORFTELEPHONE: +49 211 4361 6201FAX: +49 211 4361 6202

GREECECHATZIYIANNI MEXI, 5, 1º11528 ATHENSTELEPHONE: +30 210 725 6340FAX: +30 210 729 0988

NETHERLANDSPOLARISAVENUE, 612132 JH HOOFDDORPTELEPHONE: +31 23568 50 80FAX: +31 23568 50 88

BRAZILRUA GOMES DE CARVALHO, 1327, 2ºVILA OLÍMPIA, SÃO PAULO – SP04547 – 005TELEPHONE: +55 11 3371 4133FAX: +55 11 3845 4522

www.sonaesierra.com passionateabout

innovation

In Review

06

Son

ae Sierra In R

eview 2006

Front cover: RioSul, Portugal

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