brmalls eng

Investor PresentationJanuary 2011

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��HighlightsHighlights��MarketMarket OverviewOverview��CompanyCompany OverviewOverview��GrowthGrowth DriversDrivers��FinancialsFinancials

�Brazil Shopping Mall Industry Offers Strong Growth Potential• Market highly underdeveloped and underpenetrated

• Fragmented industry

• Very limited downside given the economics of the business

�BRMALLS is the Largest and the Best Operator in the Sector• Solid and consistent track record

• Diversified growth strategy through Acquisitions and Developments

• By far the best key performance indicators

• Fastest growing company

�BRMALLS Aims to Achieve an EBITDA of R$1 billion by 2013• Represents a 34.4% CAGR ’10-13 compared to 81.0% CAGR ‘06-09

• No need for additional equity issuance

• Does not include any large acquisitions

Highlights

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��HighlightsHighlights��Market OverviewMarket Overview��CompanyCompany OverviewOverview��GrowthGrowth DriversDrivers��FinancialsFinancials

2,180

1,290

828

297 289 219 16345

GLA per 1,000 inhabitants (m²)

USA Canada Australia Portugal Spain France Germany Brazil

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Brazilian Mall industry offers strong potential for growt h and expansion

Source: ICSC 2008

Shopping Mall Industry

65.7%

57.5%

51.3%

25.9%

17.2%

% of Retail Sales in Shopping Malls (2008)

BrazilCanada USA Australia France

Source: ICSC 2008

September 2009: 18.3%

Brazilian Shopping Mall Industry

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Highly fragmented market of shopping malls offer si gnificant room for consolidation

2006 2007 2008 2009

13.4%22.0% 21.0% 21.4%

86.6%78.0% 79.0% 78.6%

Market Share - Shopping Mall s Local Industry

2009

BRMALLSMultiplanIguatemiOthers

78.6%

4.3%

5.6%

11.5%

2009

Top 3 Players

Others

41.6%

58.4%

Brazil USA

Top 3 Mall Players

Shopping Malls Sales

Gross Leasable Area

11.8%

8.8%

Shopping Malls Sales Growth vs. GLA (05 – 09 CAGR)

High Demand for New Developments

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Decreasing vacancy rates and high sales growth offe r huge potential for new developments

2003 2004 2005 2006 2007 2008 2009

5.7%

4.0%4.4%

2.9%3.1%

2.6%

2.0%

Brazil’s Vacancy Rate – Year End

*Source: ABRASCE

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Shopping Mall: A Safe Harbor

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

10.0 12.0 14.0 16.0 18.023.0

26.0

32.036.0

41.645.5

50.0

58.0

64.6

71.0

Sales Performance in the Shopping Mall Sector from 1995 – 2009 (R$ billion)

Average Inflation (1995-2009): 7.6%

Average GDP (1995-2009): 2.9%

Sales CAGR (1995-2009): 15.0%

• Avg. GDP (95-97): 3.3%

•Avg. Inflation (95-97): 12.4%

•Avg. Interest Rate (95-97): 34.5%

•Sales Growth CAGR (95-97): 18.3%

Mexican Crisis (1994) &

Asian Crisis (1997)

Russian Crisis (1998) &

Real Depreciation (1999)

• Avg. GDP (98-00): 1.5%

• Avg. Inflation (98-00): 5.5%

• Avg. Interest Rate (98-00): 21.3%

•Sales Growth CAGR (98-00): 20%

2002 Crisis – Lula Election

• Avg. GDP (03-05): 3.3%

• Avg. Inflation (03-05): 7.5%

• Avg. Interest Rate (03-05): 17.4%

•Sales Growth CAGR (03-05): 12%

Subprime Crisis(2008 and on)

•Avg. GDP (08-09): 2.4%

•Avg. Inflation (08-09): 5.1%

• Avg. Interest Rate (08-09):11.2%

•Sales Growth (08-09): 9.9%

Source: IPEA Data and ABRASCE

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��HighlightsHighlights��Market OverviewMarket Overview��CompanyCompany OverviewOverview��GrowthGrowth DriversDrivers��FinancialsFinancials

� Largest Shopping Mall Company in Latin America

• 39 regional malls

• 4 malls under development and 5 malls under expansion

• Total GLA: 1,173.2 thousand sq. m (1.4 million sq. m after exp. and development)

• Owned GLA: 600.4 thousand sq. m (728.2 thousand sq. m after exp. and development)

• Bovespa’s Novo Mercado (BRML3) and ADR Level 1 (BRMSY)

� Most Efficient Operator in the Sector

• Best EBITDA Margin: 83.4% x 66.5% of other firms in the sector (9M10)

• Lowest Occupancy Cost : 9.5% x 11.6% of other firms in the sector(9M10)

� The Fastest Growing Company in the Sector

• Largest EBITDA growth since its foundation: EBITDA CAGR (2006 –2009) of 77% x 29% of other players in the sector

• - EBITDA CAGR (9M10 x 9M07): 34.2% x 24.1% of other firms in the sector

BRMALLS’ presence

National Presence

Who we are

National Presence

10

373,480

292,200270,752

237,303

200,800

Top Players GLA (m²) - Year End 20061,173,179

544,703433,175 423,281

365,938

Top Players GLA (m²) - Current

Leading Player in the Sector in 4 Years

BRMALLS became the largest Brazilian shopping mall company in 4 years

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Best Mall Operator in the Sector

BRMALLS has the best performance indicators in the sector

BRMALLS Multiplan Iguatemi Aliansce

92.4%

86.7% 86.6%

90.0%

9M10 NOI Margin*


9.5%

13.3%

11.5%

10.1%

9M10 Occupancy Cost (as % of tenants sales)


7.0%

4.9%

6.2%6.5%

9M10 Same Store Rent (% growth)


83.4%

56.2%

77.0%

66.5%

9M10 EBITDA Margin*

* Under comparable basis.

12


BRMALLS Multiplan Iguatemi

77.0%

28.0% 30.0%

EBITDA CAGR (%) - 2006 to 2009


10.9%

6.5%

8.9%

5.6%

Return on Equity (ROE) – 9M10 annualized

185

81

146

75

100

125

150

175

200

1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10

BR Malls Multiplan Iguatemi

166

117

134

60

80

100

120

140

160

1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10

BR Malls Multiplan Iguatemi

EBITDA / m² EBITDA Margin (%)

13

-

100.0

200.0

300.0

400.0

500.0

600.0

700.0

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10

FFOPS (R$ cents/share)

BRMALLS Multiplan Iguatemi


486

140

132

Our FFO/share more than tripled since 2007

14

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

7.6%8.3%

9.5%

12.4%13.4%

12.3% 12.0%

9.9%8.8% 8.6% 8.0%

10.1% 10.1%

Same Store Rent Growth (%)

Sales and Rent Performance

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Same Store Rent (%) IGP-M (%)

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10

9.6%10.7% 10.8%

12.7%

8.8%

3.5%6.4%

5.1%

11.0%

7.0%

16.2%13.2%

16.6%

11.8%

Same Store Sales Growth (%)

Company with Highest Liquidity

16


43.3

14.7

9.7

2.6

Avg. Daily Traded Volume – December 2010 (R$ million)


94%

37%25%

36%

Free Float (% of total shares)

National Presence

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Number of Malls 39

Total GLA (m²) 1,173,179

Owned GLA (m²) 600,381

Northeast RegionPopulation: 53,477,000

Share of Brazilian Retail Sales: 18.0%

YoY Total Sales Growth: 5.9%

% of Total GLA: 12.5%

% of NOI: 7.1%

Southeast RegionPopulation: 79,751,000




% of NOI: 77.3%

South RegionPopulation: 27,539,000




% of NOI: 7.2%

Central-West RegionPopulation: 13,751,000




% of NOI: 7.2%

North RegionPopulation: 15,313,000




% of NOI: 1.2%

Focus on the Middle Class

Share of Brazil´s Total Population Number of Malls Owned GLA (m²)

% of Total Owned GLA (m²)

% ofBRMALLS NOI

67.0%

4.6%

28.4%

A

B

C / D

8

3

28

41,783

34,264

524,334

7.0%

5.7%

87.3%

5.2%

7.0%

87.8%

39 600,381 100% 100%

*Source: IBGE 2008

A: > 15 minimum wages (> R$7,650)

B: >5 – 15 minimum wages ( > R$2,550 – R$7,650)

C: >3 – 5 minimum wages ( > R$1,530 – R$2,550)

D: 1-3 minimum wages ( > R$510 – R$1,530)

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��HighlightsHighlights��Market OverviewMarket Overview��Company OverviewCompany Overview��GrowthGrowth DriversDrivers��FinancialsFinancials

BRMALLS Aims to Achieve an EBITDA of R$1 billion by 2013

• Considers R$250 million investment in acquisitions per year

• Assumes 2 greenfield projects being open each year

• Same-Mall NOI growth of 6% in real terms per year

• No need for additional equity issuance

• This represents a 34.4% CAGR ’10-13 compared to 81.0%

CAGR ‘06-09

Our Mission

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9M10 -annualized

4Q10 -realized

2011 2012 2013 Total

455,111

609,310

79,200

25,000

25,000

25,000

NOI growth until 2013 through acquisitions(R$ million)

2010 2011 2012 2013 Total

593,238

674,406

27,056

27,056

27,056

GLA growth until 2013 through acquisitions(m²)

Growth via Acquistions

21

Acquisitions can increase our GLA by 14% and NOI by 34% until 2013

* *

* Estimates consider R$250 million in acquisitions on 2011, 2012 and 2013.

Greenfield and Expansion Projects

22

New developments will increase our GLA by 29% and N OI by 47% until 2013

Summary of already announced projects (5 expansions and 4 greenfield projects):

Stabilized NOIR$146,8million

Owned GLA127,771 m²

Average Ownership61.9%

Total GLA206,176 m²

2010 2011 2012 2013 Total

593,238

764,076

57,885

58,387

54,565

GLA growth until 2013 through developments(m²)

9M10 -annualized

4Q10 -realized

2011 2012 2013 Total

455,111

668,795

31,500

54,873

71,000

56,312

NOI growth until 2013 through developments(R$ million)* *

* Estimates consider two greenfield projects to be announced opening in 2013.

Recently Opened Greenfields

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Mall Information:

• Total GLA (m²): 16,431

• Owned GLA (m²): 11,502• Stores: 120

•Leasing Status: 100%• Opening Date: October 5th

• NOI : R$ 8 million• Total CAPEX : R$ 49 million

• IRR: 19% (real, unleveraged)• Cash on Cash : 22%

Recently Opened Greenfields

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Mall Information:

• Total GLA (m²): 29,042

• Owned GLA (m²): 20,924• Stores: 184

•Opening Date : November 24th• Stab. NOI : R$ 29.2 million

• Total CAPEX : R$ 173 million• CAPEX Status : 62%

• IRR: 16.5% (real, unleveraged)• Cash on Cash : 19.1%

Greenfields Under Development

25

Regional Information:

• Population: 1.0 million

• Consumption potential: R$3.6 billion per year

Mall Information:

•Landbank (m²): 25,000

• Total GLA (m²): 29,207•Owned GLA (m²): 14,311

• Leasing Status: 88.2%• Expected Opening: 2Q11

• Stab. NOI: R$ 13.2 million


26


• Population: 750 thousand


Mall Information:

• Landbank (m²): 112,000

• Total GLA (m²): 41,942• Owned GLA (m²): 25,165

• Construction Status: 27%• Leasing Status: 63.8%

• Expected Opening: 4Q11• Stabilized NOI: R$31.3 million

• IRR (real and unleveraged): 18%


27


• Population: 2.4 million


Mall Information:

• Total GLA (m²): 36,188

• Owned GLA (m²): 21,713• Construction Status: 12%

• Leasing Status: 56.7%• Expected Opening: 2Q12

• Stabilized NOI: R$21.6 million• IRR (real and unleveraged): 19.3%


28


• Population: 750 thousand


Mall Information:

• Total GLA (m²): 42,586

• Owned GLA (m²): 25,552• Expected Opening: 2Q12

• Stabilized NOI: R$28.7 million• IRR (real and unleveraged): 17.1%

Recently Opened Expansions

29

West Shopping

• Total GLA: 9,608 m²• Owned GLA: 2,882 m²• Inauguration: 2Q10

Maceió Shopping


Expansions Under Development

30

Current Mall

• Total GLA: 31,635

• Owned GLA: 31,635• Occupancy rate: 100%

• Late payments (30 days): 0.4%• Monthly Sales (per m ²): R$1,000

• % of BRMALLS NOI: 6%• LS: > 20%

• SSR: 12%

Expansion:

• Total GLA (m²): 14,839

• Owned GLA (m²): 14,839• Expected Opening : 2Q11

• Construction Status : 57%• Leasing Status: 98.2%


31

Shopping Campo Grande


Plaza Shopping



32

Top Shopping


Osasco Plaza Shopping

• Total GLA: 9,675 m²• Owned GLA: 3,831 m²• Inauguration: To be defined

Multi-Use Projects

Over R$165 million in revenues from multi-use proje cts expected over the next 6 years

Tamboré

Campo Grande

Goiânia

SalesVolume(R$ MM)

% BRMALLS(R$ MM)

#Towers

104.0 20.9 1

54.7 9.8 1

7.1 0.6 1

2011

Tamboré

Caxias do Sul

Piracicaba

SalesVolume(R$ MM)

% BRMALLS(R$ MM)

#Towers

174.3 35.1 2

40.0 2.7 1

39.8 1.4 2

NorteShopping

Top Shopping

Independência

105.4 5.0 1

0.1 1

27.5 3.5 1

21.7

2012

Fashion Mall

Campinas

São Bernardo

SalesVolume(R$ MM)

% BRMALLS(R$ MM)

#Towers

101.7 24.2 2

44.7 6.7 1

80.0 8.6 5

Tamboré

Granja Vianna

Top Shopping

174.3 35.1 2

5.0 1

43.5 2.0 2

28.0

Mooca Plaza 64.0 6.9 4

2013-2016Total 165.8 31.3 3

Total 408.7 47.8 8

Total 536.2 88.5 17

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CAPEX Schedule

BRMALLS will disburse R$634 million with the announ ced projects over the next 2 years

Ban

kT

ype

Ter

mC

ost

% o

fCA

PE

XA

mou

nt

Itaú-Unibanco Santander Santander

CRI Project Finance Project Finance

12 years 10 years 10 years

IGP-M + 7.75% 93.95% CDI IGP-M + 8.3%

77.8% 67.7% 58.4%

R$ 92.5 million R$ 32 million R$94.6 million

Bradesco

Project Finance

12 years

TR + 9.8%

69%

R$115 million

Total Amount Financed: R$ 334.1 million

Already disbursed

4Q10 2011 2012 2013 Total

302.5

936.3

129.4

297.4

205.5 1.5

CAPEX Disbursement Schedule (R$ million)

34

9M10 -annualized

4Q10 -realized

2011 2012 2013 Total

455,111

822,994

110,700

79,872

95,999

81,311

NOI growth until 2013 (R$ million)

2010 2011 2012 2013 Total

593,238

845,244

84,941

85,443

81,621

GLA growth until 2013 (m²)

Where We Expect to Be in 2013

35

New Developments and Acquisitions should increase o ur GLA by 42% and NOI by 81% until 2013

* *

* Estimates consider R$250 milion in acquisitions on 2011, 2012 and 2013 and two greenfield projects to be announced opening in 2013.

36

��HighlightsHighlights��Market OverviewMarket Overview��Company OverviewCompany Overview��GrowthGrowth DriversDrivers��FinancialsFinancials

Financial Highlights

Solid and consistent NOI growth…

2006 2007 2008 2009

74

172

288

362

9M09 9M10

254

320

NOI (R$ million)

CAGR: 70.0% 25.9%

37

9M09 9M10

93

115


...concentrated in managed malls, which represents over 90% of our NOI

Same Mall NOI (R$ million)

23.9%

Other Malls Managed Malls

11.8%

24.4%

38

2006 2007 2008 2009

54

141

240

319

9M09 9M10

217

289


Very strong EBTIDA and Margin growth…

Adjusted EBITDA and Adjusted EBITDA Margin (R$ mil lion)

CAGR: 81.0% 33.8%

63%68%

75% 81%80% 81%

39

2006 2007 2008 2009

40

79

139

233

9M09 9M10

146

215


… with consistent increase in FFO and operating marg ins

Adjusted FFO and AFFO Margin (R$ million)

CAGR: 80.0%

47.3%

47%

38%44%

59%

53%

60%

40

Capital Structure

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 onwards

27.6

111.0 113.6

187.8 182.2 172.4 169.0

87.3 85.0 73.5

26.7 6.7

298.4

Amortization Schedule (R$ million)

IPCA20.8%

USD19.7%

IGP-M22.1%

TJLP1.0%

CDI3.1%

TR33.3%

Fixed (R$)0.0%

Debt Indices (% of the total)

Cash R$756.6 million

Gross Debt R$1,541.2 million

Net Debt R$ 784.6 millionNet Debt / EBITDA 1.19x

Average Yield 101.8%

Average Debt Duration 11 years

Average Debt Cost IGP-M + 7.63%

Notes: 1- Coupon hedge (5 years) of perpetual bond through a simple cash flow swap, exchanging our position from USD+9.75% to 109.3% of CDI for 3 years and 100.3% of CDI for 2 last years2- Assumes payment of perpetual bond on 2022

1

2

1

3Q10

41

2011

682

549

80.6%

341

Average Estimates (R$ million)

Analysts that includes acquisitions in their models: Citi, Itaú, Santander, Bradesco, Votorantim, BTG, Merrill Lynch, Goldman Sachs, Deutsche Bank and Raymond JamesAnalysts that excludes acquisitions in their models : UBS, Morgan Stanley, Credit Suisse, Banco Fator and Barclays Capital *FFO estimates do not consider exchange variation and swap adjusted to market value

Net Revenues

EBITDA

FFO*

EBITDA Mg.

605

466

77.0%

348

Net Revenues

EBITDA

FFO*

EBITDA Mg.

742

581

78.2%

436

Net Revenues

EBITDA

FFO*

EBITDA Mg.

846

688

81.2%

437

Net Revenues

EBITDA

FFO*

EBITDA Mg.

Net Revenues

EBITDA

FFO*

EBITDA Mg.

656

522

79.5%

343

822

663

80.6%

437

Market Consensus

42

2012

2011

2012

Including Acquisitions Excluding Acquisitions

20112012

Market Consensus (R$ million)

Net Revenues EBITDA AFFO

25.3%27.1% 27.3%

Growth 2011-2012

IR Contacts

Leandro Bousquet – CFO and IROPhone: 55 21 3138-9997E-mail: [email protected]

Derek Tang – CoordinatorPhone: 55 21 3138-9914E-mail: [email protected]

Leonardo Vazquez – AnalystPhone: 55 21 3138-9992E-mail: [email protected]

Bruno CaniPhone: 55 21 3138-9939E-mail: [email protected]

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This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should notbe treated as giving investment advice. It is not targeted to the specific investment objectives, financial situation or particular needs of any recipient. Norepresentation or warranty, either express or implied, is made as to the accuracy, completeness or reliability of the information contained herein. It should not beregarded by recipients as a substitute for the exercise of their own judgment. Any opinions or information expressed in this material are subject to change withoutnotice and BR Malls Participações S.A. (“BR Malls”) is not under any obligation to update or keep current the information contained herein.

This material is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the FinancialServices and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d)("high net worth companies, unincorporated associations etc") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whoman invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection withthe issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as"relevant persons"). This material is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Anyinvestment or investment activity to which this material relates is available only to relevant persons and will be engaged in only with relevant persons.

You should consult your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem necessary, and you mustmake your own investment, hedging of trading decision regarding the Transaction based upon your own judgment and advice from such advisers as you deemnecessary and not upon any view expressed in this material.

This material includes forward-looking statements subject to risks and uncertainties, which are based on current expectations and projections about future eventsand trends that may affect BR Malls’ business, financial condition, results of operations, liquidity, prospects and/or the market value of our common shares andGDSs. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance orachievements, and may contain words like “believe”, “anticipate”, “expect”, “envisage”, “estimate”, “intend”, “may”, “will”, “continue” or any other words orphrases of similar meaning. These statements include projections and forecasts about general economic, political and social conditions in Brazil, as well asinformation about competitive position, the regulatory environment, potential opportunities for growth and other matters. The statements were prepared on thebasis of management’s present knowledge and assumptions which management believes to be reasonable. For purposes of preparing these projections andforecasts, management made certain assumptions about general business and economic conditions, the outcome of which neither management nor any otherperson can predict with any certainty. These assumptions and the other assumptions upon which the projections are based are inherently subject to significantuncertainties. Therefore, the projections are not necessarily an indication of our future performance. Neither BR Malls nor any other person assumes anyresponsibility for their accuracy and, accordingly, none of such persons is making (and you should not infer otherwise) any representation about the likely existenceof any particular future set of facts or circumstances. Because of these uncertainties, the investors shall not take any investment decision based on these estimatesand forward-looking statements. BR Malls does not intend to provide future holders of GDSs or common shares with any revised projections or forecasts or analysisof the differences between such projections and forecasts and its actual operating results.

Disclaimer

44

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