Message from Management

Despite the challenging macroeconomic scenario in 2014, we managed to end the year in line with our expectations. The World Cup event holidays on the second and third quarter, as well as the economic slowdown on the fourth quarter directly impacted our operational results. In spite of the negative factors, our tenants performed as expected achieving same store sales (SSS) of 6.5% on 2014.

If we exclude the effects of the assets divested in 2014, our total sales reached a solid 10.2% growth in 2014. We also maintained the efficiency of our assets reaching a NOI/m² of R$131.5, our highest level ever recorded.

By maintaining focus in our tenants’ financial health as well as the efficiency of our common costs, we recorded an occupation cost of 10.4% in 2014 in line with 2013.

In 2014 we announced the inauguration of 3 expansions (Shopping Piracicaba, Shopping Recife and São Luís Shopping) and 1 greenfield (Shopping Vila Velha, the largest greenfield ever developed by BRMALLS). With these inaugurations, we increased our total GLA by 111.7 thousand m² and our owned GLA by 45.9 thousand m². We estimate that these projects will generate a stabilized NOI of R$38.3 million.

In order to deliver more value to our shareholders and in line with our portfolio recycling strategy, we divested from 6 assets in 2014 for a total amount of R$389.2 million.

We believe that 2015 will be even more challenging for the Brazilian economy. Meanwhile we will dedicate our best efforts to strengthen the company while increasingly looking to improve our operational efficiency while prioritizing the most profitable investments for our shareholders. In 2015 we expect the inauguration of 2 important expansion projects that will add 12.4 thousand m² of total GLA to our portfolio.

2014 Highlights

• In 2014, net revenues grew by 7.0% to R$1,395.2 million. Excluding the malls divested in the last 12 months, net revenues grew by 8.6% in 2014.
• In FY14, NOI came to R$1,297.3 million, 7.5% up on the previous year. Excluding the malls divested in the last 12 months, NOI increased 9.1% in 2014.
• In 2014, adjusted EBITDA amounted to R$1,120.4 million, 6.2% higher than in 2013 with a margin of 80.3%. If we exclude the divestments in the last 12 months, our adjusted EBITDA grew by 8.0% in 2014.
• In 2014, our adjusted FFO totaled R$469,5 million.
• Total Sales reached R$23.0 billion in 2014, up 4.4%. Excluding the malls divested in the last 12 months, total sales grew by 10.2%.
• Same-store rent increased by 7.9% and Same store sales grew by 6.5% in 2014.
• Occupancy remained at high levels, averaging 97.4% of total GLA in 4Q14, 0.3 p.p. improvement over 3Q14. Our ten most representative malls in terms of NOI had an average occupancy above 98.4%.
• In 2014, renewal and new contract leasing spreads reached 23.7% and 17.6%, respectively.
• In 2014 we inaugurated 3 expansions: Shopping Piracicaba, Shopping Recife and São Luís Shopping. Together they increased our total GLA by 39.9 thousand m² and our owned GLA by 10.0 thousand m². We estimate that these three expansion projects will generate R$10.3 million in stabilized NOI for BRMALLS.
• On August 25th we inaugurated Shopping Vila Velha, the 10th and largest of our greenfields adding a total GLA of 71.8 thousand m² and owned GLA of 35.9 thousand m². The mall inaugurated with a 90% occupancy.
• In 2014, continuing with our portfolio recycling strategy, the Company divested from 6 malls. In 1Q14 we divested our entire interest in Shopping Pátio Belém, Shopping Metrô Tatuapé and sold a 49% stake in Ilha Plaza Shopping. In 2Q14 we sold our entire stake in Big Shopping. Finally, on 4Q14 we sold our entire interest in Shopping Center Fashion Mall and Shopping Muller Joinville. BRMALLS received R$389.2 million with the 6 assets divested.
• We ended the year with 48 malls which represents 9% of the total number of malls in Brazil and over 12% of the total GLA in Brazil.
• Over 9,000 tenants in our portfolio.
• With 509.5 thousand m² of GLA, BRMALLS is the company that developed the most malls since 2008, about 50% more than the average of our peers.
• Our 10 Greenfields and 17 expansions inaugurated since 2008 represent 30% of four owned GLA.
• We issued R$403.2 million in Real Estate Certificates (CRI’s), one of the only Brazilian companies to price a funding operation in line with the government’s interest rate.
• Despite the challenging economic scenario in Brazil, on November 24th, Fitch Ratings revised BRMALLS’ corporate credit outlook from “stable” to “positive”.
• We received the “Supplier of The Year” Prize from Outback Steakhouse.
• 13 Greenfield/expansion projects were leased during the year.
• We launched the 1^st Family/Children consumption membership program.
• We executed unique projects with The Coca-Cola Company such as the Trophy Tour and the arrival of Santa Claus.
• We are the only and the largest mall company to partner up with Disney with unique brands such as Star Wars, Cars and Princess.
• We hosted more than 520 million people visited our malls in the course of the year.

Our Dream and Values

Our Dream

To be the biggest and the best shopping mall company in the world.

Our Values

Develop Owners

We hire, train and retain the best people and provide them with an environment in which they have responsibility, autonomy and feel like owners of the business.

Work with Simplicity and Agility

We have a simple, agile, flexible and transparent structure, and we respond quickly to opportunities and changes that occur in the market.

Perform with consistency and efficiency

We act with objectivity, sense of urgency, efficiency and humility, and consistently satisfy our clients and partners' expectations.

Prioritize Growth and Productivity

We are really focused in contributing to BRMALLS' growth, improving the company's productivity and profitability in the short and long term.

Focus on Results and Meritocracy

We work as a team and in a disciplined way in order to consistently exceed challenging goals, and allocate responsibilities and reward based on merit.