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Shopping Capim Dourado
In 4Q12, we announced the acquisition of Shopping Capim Dourado. Opened in 2007, Shopping Capim Dourado is located in the city of Palmas, Tocantins state. The city has 250 thousand inhabitants and a population growth rate of 3.6% per year. Nearby Palmas, there are four cities (Miracema do Tocantins, Paraíso, Porto Nacional e Aparecida) with a total of 450 thousand inhabitants, located about 50km away, considered in the mall's area of influence.
The region has a strong focus on education, with schools and universities that serve more than 30 thousand students. Approximately 30% of the population is employed in the public service, the rest in construction, services, education and the health sector.
With a total GLA of 29.1 thousand m², Shopping Capim Dourado has 110 stores, Cinemark movie theaters and many leisure options. The asset has relevant anchors such as Casas Bahia, Marisa, Riachuelo, Renner, and Centauro. Also there are several important brands such as Polishop, Salinas, Calvin Klein, Lacoste, O Boticário, Chilli Beans and Ri Happy. Furthermore, there is an additional construction potential of 45.0 thousand m² and BRMALLS is already studying an expansion project of approximately 10.0 thousand m².
At the time of acquisition, we estimate that the mall would generate R$ 15.9 million in NOI (including service revenue) over the next 12 months for BRMALLS. The transaction was negotiated at R$177.1 million, paid in cash, a capex/m² of R$6,092/m². In terms of return, the expected IRR, real and unlevered, is 13.1%, the entry cap rate (12 months forward) and stabilized is 9.0% and 11.9%, respectively. These returns do not consider the potential for expansion.
Shopping Plaza Macaé
BRMALLS acquired shares of the company that owns Shopping Plaza Macaé, reaching a 45% ownership interest in the mall. This was the Company's 11th mall in the state of Rio de Janeiro and 30th in the Southeast region, reaching an owned GLA of 218,500 m² and 544,900 m², in the state and in the region, respectively. Opened in September 2008, Shopping Plaza Macaé is located in the city of Macaé. The city has the best social economic development indicators of the state of Rio de Janeiro. With a population of approximately 218 thousand inhabitants growing at a rate of 3.6% per year and GDP per capita of R$ 36 thousand, the city of Macaé is an important educational and industrial center, especially in the oil sector. Petrobrás selected the city to host its Campos Basin, attracting large investments, population growth and job creation.
The mall is located near a high-income residential area and there are no other malls in the area of influence (Macaé, Rio das Ostras, Quissamã, Casimiro de Abreu and Conceição de Macabu), with a population of 414 thousand inhabitants and an average growth rate of 5.2%.
Currently, with a total GLA of 22.7 thousand m², Shopping Plaza Macaé has 93 stores, movie theaters and many leisure options. The mall has relevant anchor stores such as, Lojas Americanas, C&A, Marisa, Leader, Cine Magic, and several important brands such as Ponto Frio, Centauro, Hering, Kopenhagen and Walmart. We estimate that the mall will generate R$$4.8 million in NOI (including service revenue) over the next 12 months for BRMALLS, representing a nominal cap rate entry (12 months foward) of 10.3% and an estimated stabilized cap rate of 13.2%. The expected IRR, real and unlevered, is 13.1%. The transaction was negotiated at R$ 47 million, paid in cash, of which R$22.2 million will be deducted due to the assumption of debt.
Shopping Rio Anil
BRMALLS acquired 50.0% of Rio Anil Shopping, raising owned GLA by 13,100 m² and total GLA by 26,300 m². This is the Company's second mall in the state of Maranhão and the sixth in the Northeast region, reaching total and owned GLA of 213,500 m² and 95,700 m², respectively, for the region.
Inaugurated two years ago on April 15, 2010, Rio Anil Shopping is located in one of the most populous regions of São Luis, the Maranhão state capital. This is a highly privileged location, with one of the city's highest population density. In addition to its 128 diversified stores, including seven anchor stores, the mall has 1,512 parking spaces and a flow of 128,200 vehicles per month. In terms of store mix, the mall has important anchor and megastores, including C&A, Riachuelo, Lojas Americanas, Centauro and Marisa. It also has a supermarket and a Cinesystem complex with six Multiplex Stadium rooms, two of which equipped with 3D projection equipment, as well as a 20-restauant food court with capacity for 1,500 people, offering various gastronomic options.
The Company invested R$120.0 million in the acquisition. Of this total, R$85.7 million was paid in cash and R$34.3 million was used to settle a debt of the former developer.
The estimated NOI for the following 12 months is R$10.9 million, including service revenue. Considering the price for the mall and estimated NOI, the acquisition represents an entry cap rate of 9.1%, a stabilized cap rate of 11.6%, and a real and unleveraged IRR of 13.1%.
Shopping Itaú Power
On February 16, 2012 BRMALLS acquired 33.0% of Itaú Power Shopping, raising owned GLA by 10,800 m² and total GLA by 32,700 m². This is the Company's seventh mall in the state of Minas Gerais, reaching a total and owned GLA in the South East region of 822,500 m² and 508,200 m², respectively.
Inaugurated in 2003, Itaú Power Shopping is located in the city of Contagem, in the metropolitan region of Belo Horizonte, 15 minutes away from the state capital, at the point of convergence of the city's main access ways: Av. Amazonas, the Anel Rodoviário beltway and the Via Expressa highway. The city has a population of 4.2 million inhabitants, 900,000 of whom are within 15 minutes of the mall. Itaú Power Shopping has 170 stores, a leisure and entertainment area with a wide range of games and amusements, six Cineart Multiplex rooms and a 3D Cinema with a total of 1,412 seats. It has well-known anchor stores, including Riachuelo, Renner, Casas Bahia, C&A, Ricardo Eletro, Leader Magazine, Centauro, Lojas Americanas, Ponto Frio and Cineart. The food court has 20 restaurants and a capacity for 1,200 people.
BRMALLS' interest in the mall was acquired for R$87.5 million. The estimated NOI for the 12 months after the acquisition is R$9.8 million, including service revenue. Considering the price of the mall and estimated NOI, the acquisition represents an entry cap rate of 11.2% and a real and unleveraged IRR of 14.2%.
Divestments
Shopping Pantanal
On March 30, BRMALLS sold its 10% interest in Pantanal Shopping for R$45.0 million, which it had acquired in 2007 for R$10.5 million. Over the years, it generated a nominal cash flow of R$10.0 million.
This sale represents a return of 5.2 times the amount invested, with a real and unleveraged IRR of 36.3%.
This transaction reduced the Company's owned and total GLA by 4,300 m² and 43,100 m², respectively.
2012 Add-ons
Shopping Amazonas e Shopping Maceió
On December 19th, 2012, the company announced an increase in interest in Shopping Amazonas and Maceió. The increase in the additional owned GLA in Shopping Amazonas was 5.5 thousand square meters, which corresponds to an increase in 16.2%, totaling a 34.1% stake in the mall. The additional owned GLA by shopping Maceió was 6.9 thousand square meters, which corresponds to an increase of 20.0%, totaling a stake of 54.2% on the asset.
At the time of acquisition, we estimated that the increase in interest of shopping Amazonas would generate R$7.0 million in NOI over the next 12 months, representing a nominal entry cap rate of 14.8% and a stabilized cap rate of 17.3%. The internal rate of return, real and unlevered, is of 18.0%. The value of the transaction was R$47.0 million. The mall has approximately 200 stores including satellite stores, anchors, kiosks, movie theater, leisure, banks and two food courts. Amazonas Shopping attracts on average 40 thousand people per day and has more than 1.700 parking spaces.
For shopping Maceió, we estimated that the 6.9 thousand m² of owned GLA added with the acquisition mentioned above will generate R$5.1 million in NOI over the next 12 months, representing a nominal entry cap rate of 11.1% and a stabilized cap rate of 13.3%. The internal rate of return, real and unlevered, is of 13.9%. The value of the transaction was R$46.0 million. Maceió Shopping offers leisure and entertainment options for all ages, as well as several regional and international restaurants.
Shopping Villa-Lobos
The Company announced the acquisition of an additional stake of 18.7% in Shopping Villa-Lobos for R$109.7 million, increasing its stake to 58.4% and making it the controlling shareholder. We estimate that the additional 5,000 m² of own GLA will increase NOI by R$11.5 million in the next 12 months, representing a nominal entry cap rate of 10.5% and a stabilized cap rate of 11.6%. Real and unleveraged IRR is estimated at 13.0%.