Brmalls - Annual Report 2009

Expansions Expanding our existing malls We have seven expansion projects announced: Shopping Tamboré, Campo Grande Shopping, Plaza Niterói, West Shopping, Shopping Iguatemi Maceió, Top Shopping and Osasco Plaza Shopping. Together they will add 74.4 thousand square meters of total GLA and 44.5 thousand square meters of owned GLA to our portfolio, an increase of 7% and 9.5% respectively.

Currently Under Construction
We currently have three expansions under construction: Shopping Tamboré, West Shopping and Shopping Maceió. Together these projects will add 33,672 thousand m² of total GLA and 20 thousand m² of owned GLA to our portfolio.

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Expansion Data:

Total GLA (m²): 14,853
Owned GLA (m²): 14,853
Expected Opening : 2Q11
CAPEX Status : 19%
Leasing Status: 85%

About The Mall
Just 29km outside São Paulo, the Tamboré region is experiencing a Real Estate expansion, with new office towers and residential complexes. Located in this area, Shopping Tamboré is one of our top 10 NOI contributors. It has R$1,000 in sales per m² per month and represented 7% of BRMALLS’ total NOI in 2009.

With 32,000 m² of GLA, the current mall ended 2009 with no vacancy, leasing spreads above 13%, a same store rent growth of 10% and only 0.4% of late payments, indicating a great opportunity for expansion.

The expansion will add 14,853 m² to the mall, increasing its size by 47%. The expansion has a real and unleveraged expected rate of return of 16.3%and will add 84 stores and 832 parking spaces to the mall.

Project evolution
With an expected opening in the second quarter of 2011, construction has already begun.

The construction is proceeding according to schedule. We are building the pre-cast structure and finalizing the deck parking foundation. As seen in the picture, we are also building the expansion structure.

The mall’s good results and management created a big demand for spaces in the expansion thus facilitating the leasing team’s work. We have already leased 85% of the expansion’s total GLA.

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Expansion Data:

Total GLA (m²): 9,000
Owned GLA (m²): 2,700
Expected Opening: 2Q10
CAPEX Status : 100%
Leasing Status: 100%

About The Mall
West Shopping is located in Rio de Janeiro, in Campo Grande, a premiun location for middle class consumers with easy access. The mall represents a landmark in the neighborhood’s history and is the main shopping and leisure destination in its region.

The current mall has a mix of 154 stores, including recognized anchors stores, leisure options, comfort and security, in addition to an educational complex where more than 8,000 students attend.

With nearly 100% of its 31,000 m² of GLA occupied, leasing spreads above 13% and R$700 sales per m² per month, the expansion is expected to be a success.

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Expansion Data:

Total GLA (m²): 9,819
Owned GLA (m²): 2,455
Expected Opening: 2Q10
CAPEX Status : 77%
Leasing Status: 68%

About The Mall
Macéio Shopping is located in Maceió, one of the most important cities in the Northeast region of Brazil. The mall is situated in a prime part of the city, with the largest demographic concentration in the State, it contains 80% of the population and 90% of the hotels in Maceio.

The mall is investing in its second expansion. The expansion will include two new anchor stores - Lojas Renner and Lojas Mais - 52 satellite stores, and a new Multiplex movie theater. The monthly average visitor traffic is over 900,000, which is almost the entire population of Maceio visiting the mall each month. The monthly average sales are approximately R$23 million.

Expansions in the pipeline
BRMALLS has four more expansions in the pipeline: Campo Grande Shopping, Plaza Niterói, Top Shopping and Osasco Plaza Shopping. These expansions will add 41,919 m² of total GLA and 26,290 m² of owned GLA to our portfolio.

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Expansion Data:

Total GLA (m²): 5,644
Owned GLA (m²): 3,678
Expected Opening: 2Q11
CAPEX Status : 0%

About The Mall
Shopping Campo Grande is among the company’s 10 leading NOI generators and closed 2009 with zero vacancies and a net default rate of -1%. These factors, among others, are indicative of the region’s buoyant demand and make the expansion project an excellent low-risk investment. The project will increase the mall’s total GLA by 17.1% and add 3,700 m² to our owned GLA.

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Expansion Data:

Total GLA (m²): 10,787
Owned GLA (m²): 10,7873
Expected Opening: 4Q12
CAPEX Status : 5.2%

About The Mall
Plaza Shopping is located in downtown Niterói, Rio de Janeiro, next to the city’s ferry and the bus stations. It is our portfolio’s most important mall, with sales per square meter of nearly R$2 thousand.

The mall has completed three expansions, the first one completed in 1993, the second in 1995 and the third in 2004. The last expansion included a new space for stores, increased the parking lot area, installed 10 new escalators and opened the first multiplex movie theater in Niteroi, Cinemark.

Plaza Shopping is planning a fourth expansion, which will increase the current mall area, and may also result in the construction of a commercial tower on top of the shopping mall.

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Expansion Data:

Total GLA (m²): 15,336
Owned GLA (m²): 7,668
Expected Opening: to be defined
CAPEX Status : 3%

About The Mall
Top Shopping is situated in the city of Nova Iguaçu region in the metropolitan region of Rio de Janeiro. Nova Iguaçu has a total population of 865,000 inhabitants, mostly lower-middle and middle class, the fastest growing income segment in Brazil.

The mall was inaugurated in 1996 and currently has 18,600 m² of GLA with 136 stores including four anchor stores. The expansion is expected to be inaugurated in 2011 and will add 15,336 m² to the mall, increasing its GLA by 84%.

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Expansion Data:

Total GLA (m²): 10,152
Owned GLA (m²): 4,020
Expected Opening: to be defined
CAPEX Status : 0%

About The Mall
Osasco Plaza Shopping is located in the city of Osasco, São Paulo state. With a population of 720,000 inhabitants, Osasco is one of the most populated cities in the state of São Paulo.

With 14,500 thousand m² of GLA, Osasco Plaza has almost 100% of its GLA occupied and saw a same store rent increase of 13% in 2009. The mall is already in need of an expansion, which will almost double the mall’s GLA.