CEO's Letter

In 2011, BRMALLS celebrated its first five years of operations with a series of important achievements, including excellent operating results, and is now Brazil’s largest real estate company in terms of market capitalization.

Annual sales totaled R$16.1 billion, 21.5% up on 2010, and we recorded three consecutive quarters of record same-store rent, peaking in 4Q11 with an increase of 15.2%. For the year as a whole, same-store rent and same-store sales increased by 13.6% and 8.9%, respectively.

Same-property net operating income (NOI) moved up by 23.2% over 2011, while total NOI climbed by an increase of 59% to R$772.6 million, representing a CAGR of 59.9% since 2006.NOI margin reached90.2%. Annual adjusted EBITDA totaled R$684.8 million, with a margin of 79.7%, and adjusted FFO came to R$331.0 million. Net income excluding investment properties stood at R$309.0 million, a 17.1%.

We closed 2011 with 1,890 leasing contracts, representing total GLA of 230,300 m2, up by 40.2%. Despite the large number of contracts, renewal and new contract leasing spreads remained high at 27.3% and 29.4%, respectively.

We acquired four new malls (Paralela, Shopping Catuaí Londrina, Catuaí Maringá and Shopping Jardim Sul) and increased our interest inanother three (Piracicaba, Curitiba and Crystal), investing a total of R$255.6 million.

The fourth quarter of 2011 included the completion of two major development projects.We opened Mooca Plaza Shopping with 100% of its GLA already leased, the biggest mall inauguration of the year and the largest in our history, consolidating BRMALLS as theleading mall operator in the state of São Paulo and addingstabilized NOI of R$35.6 million, with areal and unleveraged IRR of 16.1%.We also opened the expansion of Shopping Campo Grande, increasing our owned GLA by 3,700 m2, with a stabilized NOI of R$5.3 million and a real and unleveraged IRR of 16.5%.

All in all, our acquisitions and developments increased our total GLA by 22.2%, or 260,300 m2, to 1,433,526 m2, and our owned GLA by 32.2%, or 194,600 m2, to 798,188 m2. In 2012 and the years ahead, we will continue to use the same strategy we used during our first five years, focusing on growth and efficiency.We are very proud of what we have achieved over the last five years and we will continue to do everything possible to ensure that the Company grows even further and become increasingly efficient.