Until the beginning of 2014, BRMALLS had sold stakes in 2 assets (Esplanada in 2011 and Pantanal in 2012). In 2014 we continued with our portfolio recycling strategy, which seeks to sell stakes in assets where we don’t manage the mall or where we understand that we have captured a substantial portion of the growth opportunities. We sold stakes in 6 malls in 2014 of which 5 we sold our entire interest in the mall. We sold a total of 34.4 thousand m² of owned GLA, the equivalent of 4% of our owned GLA at the end of 2013, for R$389.2 million.
Shopping | Date of Sale | Initial Interest | Sold Interest | Amount(R$ Million) | Owned GLA |
Ilha Plaza | 1Q14 | 100% | 49.0% | 120.8 | 10,594 |
Iguatemi Belém | 1Q14 | 13.6% | 13.6% | 45.7 | 2,739 |
Metro Tatuapé | 1Q14 | 3.2% | 3.2% | 20.7 | 1,037 |
Big Shopping | 2Q14 | 13.0% | 13.0% | 11.4 | 2,241 |
Mueller | 4Q14 | 10.4% | 10.4% | 15.6 | 2,840 |
Fashion Mall | 4Q14 | 100% | 100% | 175.0 | 14,955 |
Total | 389.2 | 34,406 |
Shopping Recife Expansion
Inaugurated on October 7, 1980, Shopping Recife was the first mall in the state of Pernambuco and it is currently a benchmark in the North / Northeast region as it is considered one of the largest shopping centers in the country and in Latin America, after going through expansions throughout the three decades of operation. With an excellent location, the mall is five minutes away from Recife International Airport and six blocks from the beach of Boa Viagem, with an easy access to major roads in Recife. We also expect the construction of a 15 residential tower project around the mall in the next 24 months.
The mall has undergone 4 expansions. The last one was opened on April, 2014 and added 2,938 m² of total GLA and 905 m² of owned GLA. After the expansion, Shopping Recife reached a total GLA of 71,565 m² and an owned GLA of 22,224 m².
The new expansion added 3 VIP movie theater rooms, 1 IMAX room and 2 restaurants: Outback and Camarão Camarada. The expansion will strengthen the mall and fulfill the demand for leisure and restaurants.
The project's real and unlevaraged IRR is 14.4%
Shopping Piracicaba Expansion
The city of Piracicaba is located in one of the most industrial and productive regions in the entire state of São Paulo.
Piracicaba is the main municipality in a region of 1.5 million inhabitants and represents a dynamic industrial and agricultural development hub with a GDP of R$8.8 million. It is one of the largest alcohol and sugar producers of the world and an important industrial center with 13.000 companies.
The expansion aims to consolidate the property as a regional mall, which already has an annual footfall of 5.8 million people, and to satisfy the demand from new tenants. The mall ended 1Q14 with a total occupancy of 99.6%.
The expansion inaugurated on April 29th 2014, and contributed to the mall mix adding new anchor stores in the city of Piracicaba such as Riachuelo, Tok & Stok, Avenida and Marabraz, which will join existing stores such as: C&A, Renner, Lojas Americanas, Marisa, Dicico, Casas Bahia, Ponto Frio, Centauro and Nobel raising the attractiveness of the asset.
A new food court was added with 13 new tenants such as Burger King, Subway, Gendai and two more restaurants: Madero and Empório Santa Terezinha, that are also new to the region. In addition, the movie theater was expanded and renovated in order to become the main and largest multiplex in the region.
The project added a total of 100 stores and 800 parking spaces, to meet the mall’s high demand. The expansion added 16.2 thousand m² of total GLA and 6.0 thousand m² of owned GLA, which represents an increase of 59.4%, raising the total GLA of the mall to 43.4 thousand m².
We estimate that this project will generate a stabilized NOI of R$7.0 million for BRMALLS. The project’s real and unleveraged IRR is 16.2%.
Shopping São Luís Expansion
The City of São Luís has a developed industrial sector hosting big companies, such as Vale and AmBev, as well as one of the largest ports in Latin America. The city was considered cultural heritage by UNESCO due to its very rich historical and artistic collections, cultural events and it is an international tourist destination. More than R$50 billion are expected to be invested in the metropolitan area in the coming years generating about 100,000 jobs.
Shopping São Luís is located in one of the main avenues in the city, with a daily traffic of 50 thousand vehicles. The mall is the first in the city and it is a reference for shopping, leisure and food for over 15 years.
The expansion, inaugurated on May 6th, 2014 added 100 new stores, including 2 restaurants and 5 anchor stores such as C&A, Renner and Riachuelo. Some other new operations include: L’Occitane, Polishop, Tommy Hilfiger, Adidas, Victor Hugo, Polishop, Ri Happy, Swarovski, Track & Field and Mystore.
Positively impacted by the expansion, the mall registered a same store sales of 20.9% and same store rent of 16.9% on 2Q14.
The expansion added 20.7 thousand m² of total GLA and 3.1 thousand m² of owned GLA to our portfolio. Shopping São Luís reached a total GLA of 54.9 thousand m². We estimate that this project will generate a stabilized NOI of R$2.7 million for BRMALLS. The project’s real and unleveraged IRR is 16.5%.
The economy of the city of Vila Velha is primarily based on tourism, the port, industry and commerce. According to IBGE, the city holds the largest population of Espírito Santo with 458 thousand inhabitants, has a GDP per capita of R$ 17,245, besides having the second highest Human Development Index of the state. The population of the Metropolitan Region of Vitória is of 1.8 million inhabitants.
The mall will be located between the Juscelino Kubistchek and Luciano Neves avenues, next to the University of Vila Velha, the largest private university of the state with over 14,000 students, and 300 meters from the city courthouse. 70.0% of the population in the influence area is located in the primary and secondary areas and 84.0% of the disposable income in the primary area of influence belongs to the A and B income class.
Shopping Vila Velha, our 10th Greenfield, opened on August 25th, 2014 with 71.8 thousand m² of total GLA and over 230 stores, becoming the largest Shopping Mall in the state of Espirito Santo and the largest greenfield developed by BRMALLS.
With 90% of its GLA leased, this project brought a vast array of retail, services and leisure options. The mall has 13 anchor stores, 8 mega-stores an 8 room Cinemark Multiplex movie theater, a supermarket with over 8 thousand m², a Gym, 5 restaurants and several satellite stores. Among the main stores are: Zara, Outback, C&A, Renner, Riachuelo, Marisa, Lojas Americanas, Casas Bahia, Cinemark, Dadalto, Kalunga, Decathlon, Mega Livraria Saraiva, Lojas Avenida, Le Lis Blanc, Animale and Farm.
We estimate that the mall will generate a stabilized NOI of R$28.0 million with a real and unleveraged IRR of 16.9%.
With this opening, BRMALLS reaches a total of 50 malls with 1,729.6 thousand m² of total GLA and 1,004.1 thousand of owned GLA.