Strategically diversified portfolio
Our portfolio of shopping malls is strategically diversified with respect to both geographic location and target customer income segment. We believe our nationwide presence and our experience operating shopping malls that target different income classes allow us to benefit from the economic growth of each region and income class, minimizing the impact of fluctuations in regional economies and sectors and providing us with a key competitive advantage for the implementation of our growth and consolidation strategy.

Professional management and the best operational performance

We have a high-quality team of professionals widely recognized in the market and with significant experience in the shopping mall, real estate and financial sectors, as well as general management. Our compensation policy seeks to align the interests of these professionals with those of our shareholders through variable compensation and a stock option plan that rewards strong performance and the attainment of specified goals. Being the best mall operator in the sector requires more than a strong team, so we also implemented several management tools to guarantee the best operational performance. We focused on improving our results while maintaining the quality of our operations through practices such as mix planning, quality indexes, standards of excellence and controlling late payments.

Multiple growth opportunities
The Brazilian shopping mall industry presents us with unique growth opportunities. The combination of growth in retail sales and the decrease in interest rates together with the fragmentation in the Brazilian shopping mall market creates a strong opportunity for both the development of new malls and the acquisition of ownership interests in existing malls. We have competitive advantages in implementing our growth strategy, such as the successful experience of our management team and our principal shareholders and privileged access to opportunities generated by our extensive network. Additionally, our diversified growth strategy, through development and acquisitions, is a key advantage for our company, allowing us to benefit of the multiple opportunities in the Brazilian market.

Higher efficiency relative to the sector
Since 2006 we have implemented a series of measures to increase our mall and Company margins. We focused on reducing costs, increasing rents, improving collection tools and reducing vacancy, therefore increasing our margins. With these efforts our margins became the highest in the sector and may continue to grow with the development of new shopping malls and expansions in our business plan. In 2009, even with the financial crisis, our main performance indicators were excellent: same store sales grew 7%; same store rent increased 10.5%; our occupancy cost closed at 9% of sales, the lowest in the sector; our occupancy rate closed 2009 at 98% and late payments at 2.7%, both historical records in the company’s history. Our successful performance is reflected in our 2009 margins: 91.9% NOI margin, 81.4% EBITDA margin and 59.3% AFFO margin.

Size matters
Our national presence and leading position as the largest shopping mall company in the sector gives us more bargaining power with outsourcing companies and retailers, we have more than 5,000 tenants. Each year our malls are visited by approximately 400 million consumers, which gives us power to attract a lot of publicity and merchandising. Our size also allows us to spread our overhead cost and technology investments over a larger asset base. Size also allows us to attract and hire the best people and offer more opportunities to our employees.