1Q16 Earnings Release. André Berenguer CFO & IRO Gabriel Barcelos IR Manager Nelson Brazan IR

Transcription

1 1Q16 Earnings Release André Berenguer CFO & IRO Gabriel Barcelos IR Manager Nelson Brazan IR Tel: (55 11) Fax: (55 11) Conference Call English May 4 th, :00 PM (Brazil Time) Tel: NY: Tel: (55 11) Replay: (55 11) Portuguese May 4 th, :00 AM (Brazil Time) Tel: (55 11) Replay: (55 11)

2 INDEX 1Q16 Highlights... 3 Table of Highlights... 4 Financial Indicators... 5 Gross Revenues... 5 Net Revenues... 5 SG&A... 6 Adjusted EBITDA and EBITDA... 7 Net Financial Income / (Expenses)... 9 Other Operating Income / (Expenses)... 9 Net Income (Loss)... 9 Adjusted Net Income (FFO) Indebtedness and Cash Position Table of Loans Operating Indicators Property Management Property Leasing Portfolio Vacancy Portfolio Delinquency Portfolio Build-to-Suit Portfolio Projects under Construction / to be Developed Capital Markets Income Statement Balance Sheet Cash Flow Statement ESTA 2

3 1Q16 HIGHLIGHTS BR Properties registered in the quarter net revenues of R$127.0 million and adjusted EBITDA of R$102.1 million. São Paulo, May 3 rd, 2016 BR Properties S.A. (Bovespa: BRPR3), one of the largest commercial properties company in Brazil, announces today its 1Q16 Earnings Release. Currently, BR Properties holds 40 commercial properties, totaling 584 thousand sqm of Gross Leasable Area (GLA), of which one is under development and 4 are land plots represented by 55 thousand sqm of GLA. The Company also manages properties of its portfolio through BRPR A (subsidiary). The following financial and operational information will be presented in R$, except where indicated otherwise, and follow the Corporations Law (Lei das S/A) and the standards put forth by Comissão de Valores Mobiliários (CVM). 1Q16 Highlights 1Q16 net revenues totaled R$127.0 million. Considering the same properties, net revenues was R$120.7 million, an increase of 5% in the period. 1Q16 adjusted EBITDA of R$102.1 million, with margin of 80%. BR Properties registered a net profit of R$106.6 million in 1Q16, an increase of 254% relative to 1Q15, mainly impacted by the currency variation effect on the principal of our dollar-denominated perpetual bond, besides the gain on its partial repurchase. 1Q16 Adjusted Net Income (FFO) totaled R$10.5 million, with margin of 8%. The company registered a net debt of R$1,948.5 million and a 14.9%, or 106% of CDI, average cost of debt by the end of 1Q16. BR Properties cash position at the end of the period was R$1,112.1 million. Average rent price per sqm of the same properties grew 1.7% over the last 12 months. The Company s portfolio ended the quarter with consolidated financial and physical vacancy rates of 11.2% and 16.0%, respectively. In January, the Company concluded the sale of three real estate assets to Blackstone and Brookfield, totaling R$252.0 million. Both transactions represented to the company a gross amount of R$3,050.6 million. In February 2016 the Company tendered USD100.0 million of its outstanding perpetual notes. The amount of cash spent in the transaction totaled R$335.2 million. Lastly, the Company prepaid in the quarter a R$100.0 million amount of its 5 th issuance. local debentures 3

4 TABLE OF HIGHLIGHTS Financial Highlights 1Q16 1Q15 var % Net Revenues % General and Administrative Expenses % General and Administrative Expenses (Adjusted)* % Adjusted EBITDA % Adjusted EBITDA Margin 80% 86% -6 p.p. Net Income (Loss) % Adjusted Net Income (FFO) % Adjusted Net Income Margin (FFO Margin) 8% 18% -10 p.p. Operating Highlights 1Q16 1Q15 var % GLA Current Portfolio (sqm) % - Office (sqm) % - Industrial (sqm) % - Retail (sqm) n/a GLA Properties Under Development and Landbanks % - Office (sqm) % - Industrial (sqm) n/a - Retail (sqm) n/a Financial Vacancy 11,2% 9,0% 2 p.p. Physical Vacancy 16,0% 8,0% 8 p.p. * Excluding Vacancy Expenses, SOP and Tax on Non-cash Gains on the Perpetual s Buyback Portfolio Market Value Portfolio GLA 4% 15% 38% 38% 58% 48% Office AAA Office Industrial Office AAA Office Industrial 4

5 FINANCIAL INDICATORS Gross Revenues Gross Revenues (R$ k) Gross revenues reached R$136.4 million in 1Q16, an increase of 4% relative to 1Q15, if considering the same properties revenues. 91%, or R$124.3 million, resulted from office lease revenues; 5%, or R$6.9 million, resulted from industrial lease revenues; 4%, or R$5.1 million, resulted from property management fees; (31%) 4% Q15 1Q15 - Same Properties 1Q16 Net Revenues 1Q16 net revenues reached R$127.0 million, an increase of 5% in comparison against 1Q15, if considering the same properties revenues Net Revenues (R$ k) (30%) 5% Q15 1Q15 - Same Properties 1Q16 5

6 FINANCIAL INDICATORS General Administrative Expenses (Ex-Vacancy, SOP and Taxes on the Perpetual s Buyback) 1Q16 general and administrative expenses, excluding vacancy expenses, stock options and taxes on noncash gains on the perpetual notes buyback, totaled R$18.3 million, a decrease of 5% relative to 1Q15, when the same expenses totaled R$19.4 million. General and Administrative Expenses (ex-vacancy, SOP and Taxes) represented 14% of net revenues, 3 p.p. above the figure recorded in 1Q15. The percentage increase in the SG&A Margin relative to equal period of last year is explained by the Taxation on Financial Revenues (PIS and COFINS) which started on July General and Administrative Expenses 1Q16 1Q15 var % SG&A (28.176) (27.448) 3% Operating Expenses (13.254) (6.308) 110% Personnel Expenses (5.002) (7.649) -35% Management Fees (2.758) (5.444) -49% Stock options (363) (1.444) -75% Vacancy Expenses (6.798) (6.603) 3% SG&A (Ex. Vacancy, SOP and Taxes on the Perpetual s Buyback) (18.339) (19.402) -5% (+) Stock Option % (+) Vacancy Expenses % (+) PIS/Cofins on Non-cash Gains on the Perpetual s Buyback* n/a Percentage: G&A / Net Revenues -14% -11% -3 p.p. * Expense allocated in "Operating Expenses" G&A (R$ k) 11% 14% (5%) Q15 % Net Revenues 1Q16 6

7 FINANCIAL INDICATORS Adjusted EBITDA and EBITDA Adjusted EBITDA reached R$102.1 million, a reduction of 35% relative to 1Q15. EBITDA margin reached 80%, one of the highest in the sector. The nominal decrease is mainly explained by the loss of rental revenues resulting from property sales occurred in the past 12 months, while the decline in margin was derived from a loss of operational scale. Adjusted EBITDA and EBITDA Margin (R$ k) 86% 80% (35%) Q15 1Q16 Adjusted EBITDA Margin 7

8 FINANCIAL INDICATORS Considering the methodology determined by the CVM Instruction No. 527/12, 1Q16 EBITDA registered R$78.8 million and EBITDA margin of 62%. EBITDA (CVM Methodology) and EBITDA Margin (R$ k) 192% 62% (77%) Q15 1Q16 EBITDA Margin EBITDA and Adjusted EBITDA Composition EBITDA Composition 1Q16 1Q15 var % Net Income (loss) before Minority Interest % (+) Deferred Taxes (12.441) % (+) Income and Social Contribution Taxes % (-) Minority Interest (1.022) (1.377) -26% (+) Depreciation % (+) Net Financial Result (41.760) % EBITDA % EBITDA Margin 62% 192% -130 p.p. Adjusted EBITDA Composition 1Q16 1Q15 var % EBITDA % (-) Gain (Loss) on Appraisal of Investment Properties ( ) -112% (-) Gain (Loss) on Sale of Investment Properties (5.348) - n/a (+) Other Operating Income % (+) Stock options % (+) Bonus Provision % (+) PIS/Cofins on Non-cash Gains on the Perpetual s Buyback n/a Adjusted EBITDA % Adjusted EBITDA Margin 80% 86% -6 p.p. 8

9 FINANCIAL INDICATORS Net Cash Financial Results Net Cash Financial Results (R$ k) Excluding the non-cash effects from the FX variation on the principal of our dollar-denominated perpetual debt, the gain on its partial repurchase and the variations on derivative instruments, net financial expenses totaled R$80.5 million in 1Q (28%) Q15 1Q16 Financial Results 1Q16 1Q15 var % Financial Income % Return on Cash Reserves % Non-cash Variations on Derivative Instruments % Exchange Rate Variation n/a Other % Gains on the Perpetual s Buyback n/a Financial Expenses ( ) ( ) -58% Interest Expense on Company Debt ( ) ( ) -9% Non-cash Variations on Derivative Instruments (3.588) - n/a Exchange Rate Variation - ( ) n/a Expenses on the Perpetual s Buyback (1.806) - n/a Other (14) (3.564) n/a Net Financial Results ( ) -115% (-) Non-cash Gains on Exchange Rate Variation (65.335) - n/a (+) Non-cash Losses on Exchange Rate Variation n/a (-) Non-cash Gains on Derivative Instruments (4.783) (1.920) 149% (+) Non-cash Losses on Derivative Instruments n/a (-) Non-cash Gains on the Perpetual s Buyback (57.532) - n/a (+) Expenses on the Perpetual s Buyback n/a Net Cash Financial Results (80.496) ( ) -28% Other Operating Income / (Expenses) Other Operating Income / (Expenses) registered in 1Q16 an expense of R$1.0 million. The number was affected by a non recurring loss of R$2.1 million related to the sale of SPV s quotas. Net Income Net Income (R$ k) As already described in this report, the Company registered a net income of R$106.6 million in 1Q16, while in 1Q15 the same figure registered a net income of R$30.2 million. 254% Q15 1Q16 9

10 FINANCIAL INDICATORS Adjusted Net Income (FFO) In 1Q16, Adjusted Net Income totaled R$10.5 million, implying a reduction of 67% relative to equal period of last year. The nominal decrease is mainly explained by the loss of rental revenues resulting from property sales occurred in the past 12 months coupled with heavier cost of debt due to higher interest rates scenario in Brazil. Adjusted Net Income (R$ k) 18% 8% (67%) Q15 Adjusted Net Income Margin 1Q16 Adjusted Net Income Composition (FFO) 1Q16 1Q15 var % Net Income (loss) % (+) Deferred Taxes (12.441) % (+) Income Taxes on Property Sales n/a (-) Gain (Loss) on Appraisal of Investment Properties ( ) -112% (-) Gain (Loss) on Sale of Investment Properties (5.348) - n/a (+) Non-cash Losses on Exchange Rate Variation n/a (-) Non-cash Gains on Exchange Rate Variation (65.335) - n/a (+) Non-cash Variations on Derivative Instruments (1.194) (1.920) -38% (+) Non recurring tax on dividends of Real Estate Funds (FII) n/a (+) Stock options % (+) Other Operating Income/Expense (Sale of Assets) n/a (+) PIS/Cofins on Non-cash Gains on the Perpetual s Buyback n/a (-) Non-cash Gains on the Perpetual s Buyback (55.726) - n/a Adjusted Net Income (FFO) % Adjusted Net Income Margin (FFO Margin) 8% 18% -10 p.p. 10

11 FINANCIAL INDICATORS Indebtedness and Cash Indebtedness 1Q16 4Q15 var % Short Term Loans and Financing % Loans and Financing % Perpetual Bond % Derivative Instruments n/a Payables for Acquisition of Real Estate % Long Term Loans and Financing % Loans and Financing % Perpetual Bond % Gross Debt % Cash and Cash Equivalents % Net Debt % Portfolio Value % Gross Debt / Portfolio Value (Loan to Value) 46% 52% -6 p.p. Net Debt / Portfolio Value (Loan to Value) 29% 34% -5 p.p. Adjusted EBITDA / Net Financial Expenses * 1,3x 1,2x 10% Duration (years) ** 8,6 11,2-23% Duration (years) Ex Perpetual Bond 2,6 2,8-7% Unsecured Debt / Total Debt 42% 50% -8 p.p. * Considering Net Financial Expenses (ex. non-cash variations) ** Considering the expiration of the Perpetual Bond in 2049 Gross LTV (Gross Debt/Portfolio Value) & Net LTV (Net Debt/Portfolio Value) 52% 39% 40% 39% 41% 41% 45% 39% 40% 41% 40% 44% 46% 34% 36% 33% 34% 35% 38% 34% 34% 36% 37% 41% 34% 29% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 LTV Gross Debt LTV Net Debt Interest Coverage (Adjusted EBITDA/Net Interest Expenses) 1,7x 2,0x 1,7x 1,6x 1,6x 1,6x 1,6x 1,5x 1,4x 1,3x 1,4x 1,2x 1,3x 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 EBITDA / Net Financial Expenses 11

12 FINANCIAL INDICATORS Net Debt / Adjusted EBITDA vs. Net Debt ,6x 5,7x 5,2x 5,5x 5,7x 5,1x 5,2x 5,4x 6,1x 6,2x 6,3x 4,4x 4,8x Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Debt Amortization Schedule (R$ MI) 674* * Perpetual Bond Debt Profile 9% 12% 24% 22% 33% TR CDI USD Perpetual Bond (Swap - CDI) IGPM IPCA 12

13 FINANCIAL INDICATORS Table of Loans Loans Type Institution Index Coupon Term Maturity 1Q16 Balance 4Q15 Balance Icomap CCB Itaú BBA/ Unibanco IGPM 8,84% 120 months 16/04/ BP Itapevi CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Piraporinha CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Jundiaí CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Alphaville CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Panamérica Park CDC Itaú BBA/ Unibanco TR 9,90% 120 months 25/05/ Plaza Centenário CDC Itaú BBA/ Unibanco TR 9,90% 120 months 25/05/ Henrique Schaumann CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Bolsa RJ CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Galpão Ind. Araucária CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Glória CDC Itaú BBA/ Unibanco TR 9,90% 120 months 17/07/ Joaquim Floriano CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Paulista Park CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Paulista Plaza CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Isabela CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Olympic CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Midas CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Network CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Number One CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Celebration CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Athenas CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Ed. Comercial Indaiatuba CCI Brazilian Securities TR 10,00% 120 months 20/12/ Jandira I & II CCB Itaú BBA/ Unibanco CDI 1,28% 120 months 17/08/ Ed. Vargas CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ São Pedro CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ São José & Santo Antônio CCI Brazilian Mortgages IGPM 6,00% 120 months 17/01/ Souza Aranha CCB Itaú BBA/ Unibanco TR 9,40% 155 months 17/06/ Cond. Ind. São José dos Campos CCB Itaú BBA/ Unibanco TR 9,40% 120 months 17/06/ Cond. Ind. Itapevi CDC Itaú BBA/ Unibanco TR 9,40% 120 months 08/06/ Galpão Ind. Sorocaba CCI CIBRASEC TR 10,15% 156 months 04/09/ TNU CCI Brazilian Securities TR 9,40% 144 months 07/07/ Alexandre Dumas CCI CIBRASEC TR 9,60% 120 months 05/03/ Ouvidor 107 CCI CIBRASEC TR 9,60% 120 months 12/05/ Ed. Jacarandá CCI RB Capital TR 9,29% 120 months 16/12/ Manchete CCI RB Capital TR 9,29% 120 months 16/12/ BR Properties (holding) Perpetual Bond Capital Markets CDI 98,50% Perpetual Pre-payable (quarterly) BRPR 40 CCI RB Capital IPCA 10,82% 125 months 06/05/ BRPR 45 CRI Capital Markets IGPM 7,60% 146 months 10/10/ BRPR 55 CRI Capital Markets IGPM 10,30% 183 months 03/11/ BRPR 56 CRI Capital Markets IGPM 9,50% 183 months 07/03/ BRPR 62 CCB HSBC IGPM 10,00% 122 months 30/04/ BRPR 62 CCB Bradesco IGPM 10,00% 122 months 30/04/ BR Properties (holding) CCB Itaú BBA/ Unibanco IGPM 10,00% 122 months 30/04/ BR Properties (holding) CCB Itaú BBA/ Unibanco IGPM 10,00% 122 months 30/04/ BR Properties (holding) CCB Itaú BBA/ Unibanco IGPM 10,00% 105 months 30/11/ BR Properties (holding) CCB Itaú BBA/ Unibanco IGPM 10,00% 122 months 30/04/ BR Properties (holding) CCB Bradesco IGPM 9,25% 121 months 05/06/ BR Properties (holding) CCB Bradesco IGPM 9,25% 121 months 05/06/ Ed. Paulista CDC Santander TR 9,37% 144 months 28/06/ BR Properties (holding) Debêntures - 1st Issuance Capital Markets CDI 1,08% 60 months 15/07/ BR Properties (holding) Debêntures - 1st Issuance Capital Markets IPCA 5,85% 84 months 15/07/ CD Anhanguera CDC Santander TR 9,55% 144 months 20/12/ BR Properties (holding) Debêntures - 4th Issuance Capital Markets CDI 1,15% 24 months 05/12/ BR Properties (holding) Debêntures - 5th Issuance Banco do Brasil CDI 112,00% 60 months 11/11/ Vargas II CCB Itaú BBA TR 9,60% 144 months 13/05/ Total

14 OPERATIONAL INDICATORS Property Management Pro-active stance taken on managing the properties in the portfolio is a vital part of BR Properties operation. Through the wholly owned management subsidiary BRPR A, BR Properties focuses on close tenant relationship, property value appreciation, reduction of common area costs, along with the alternative sources of revenues. BRPR A Revenues In 1Q16, BRPR A s revenues totaled R$5.1 million or 4% of the consolidated gross revenues obtained by BR Properties. BRPR A Revenues (R$ k) 12% Q15 1Q16 Properties under Management BRPR A currently manages 29 properties, all of them office buildings. Managed Properties Nº GLA City Ed. Manchete Rio de Janeiro Glória Rio de Janeiro Henrique Schaumann São Paulo MV Rio de Janeiro Santo Antonio São Paulo São José São Paulo Icomap Rio de Janeiro Vargas Rio de Janeiro Panamérica Park São Paulo Ouvidor Rio de Janeiro TNU São Paulo RB Rio de Janeiro Ed. Comercial Indaiatuba Indaiatuba Ed. Jacarandá Alphaville Ed. Paulista São Paulo JK Complex - Towers D&E São Paulo Ed. Ventura - West Tower Rio de Janeiro Ed. Ventura - East Tower Rio de Janeiro JK Complex - Tower B São Paulo Panamérica Green Park I São Paulo TOTAL

15 OPERATIONAL INDICATORS Property Leasing BR Properties has an in-house team dedicated to the management of new leases and the renegotiation of existing ones. The property leasing department plays the critical role of anticipating any potential movement of vacancy and promoting preventive replacements. In addition, all the processes of negotiation of the lease agreements are executed directly by the team. Lease Contract Inflation Adjustment Indices 1Q16 4Q15 6% 3% 19% 2% IGP-M IPCA Other 91% 79% Rent / Sqm / Month Same Properties The Rent Price/sqm/month of the same properties in 1Q16 grew 1.7% over the last 12 months. Rent / Sqm / Month - Same Properties * 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Office 8,6% 12,9% 7,9% 7,3% 5,6% 6,1% 4,1% 3,8% 3,2% 3,5% 2,0% 0,1% 1,8% Industrial 8,8% 8,3% 6,9% 5,3% 3,8% 6,6% 6,7% 4,7% 4,7% 4,1% 4,6% 0,2% 0,2% Retail 5,4% 6,5% 6,6% 6,6% 5,9% 6,2% 2,4% 6,0% 7,8% 5,3% 8,6% n/a n/a Total 8,4% 10,9% 7,5% 6,7% 5,1% 6,2% 4,3% 3,9% 3,4% 3,6% 2,4% 0,1% 1,7% IPCA (Inflation Indicator) 6,6% 6,7% 5,9% 5,9% 6,2% 6,5% 6,7% 6,4% 8,1% 8,9% 9,5% 10,7% 9,4% IGP-M (Inflation Indicator) 8,1% 6,3% 4,4% 5,5% 7,3% 6,2% 3,5% 3,7% 3,2% 5,6% 8,4% 10,5% 11,6% Weighted Average: IPCA¹ x IGP-M (~ 9% x 91%) 7,7% 6,4% 4,7% 5,6% 7,0% 6,3% 4,3% 4,4% 4,4% 6,4% 8,7% 10,6% 11,4% * Comparison between: the average same property rent in the current period vs the average same property rent in equal period of last year * Considering only leased areas * In nominal terms ¹ IPCA and Other 15

16 OPERATIONAL INDICATORS Lease Contract Expiration Schedule Revenues (%) GLA (%) 78% 77% 11% 4% 8% 10% 4% 8% > >2019 Lease Contract 3rd Year Market Alignment Schedule Revenues (%) GLA (%) 5% 7% 38% 14% 23% 24% 13% 36% > >2019 Lease Contracts Average Duration Existing Lease Contracts Current Average Duration All Contracts 4.7 Years Build-to-Suit Contracts 3.0 Years 16

17 OPERATIONAL INDICATORS Portfolio Vacancy Physical vacancy is estimated by dividing the total vacant area by the total GLA of the portfolio. This metric does not accurately reflect the revenue loss generated by the vacant areas in the portfolio, due to the fact that it does not reflect the potential rent for which the vacant areas could be leased. Financial vacancy is utilized specifically to remedy such distortions. Financial vacancy is calculated by multiplying the average rent per sqm which could be charged in the buildings and their respective vacant areas, divided by the potential gross revenues of each property. The Company s portfolio ended the quarter with consolidated financial and physical vacancy rates of 11.2% and 16.0%, respectively. Vacancy 14,3% 16,0% 10,8% 10,5% 10,4% 10,0% 10,4% 11,2% 8,6% 9,0% 9,8% 9,7% 8,1% 8,1% 8,3% 8,6% 7,3% 8,0% 5,5% 5,3% 6,0% 6,3% 4,6% 4,1% 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Financial Physical 17

18 OPERATIONAL INDICATORS Portfolio Delinquency Since its establishment in 2006, BR Properties has registered very low delinquency levels in its portfolio, given the excellent credit quality of the tenant base. In 1Q16 the delinquency rate was 1.9%. 0,5% 0,0% 0,0% 0,0% 1,1% 0,2% 0,0% 0,2% 0,5% 0,4% 0,1% 0,0% 0,2% 0,8% 0,4% 0,4% 0,5% 0,1% 0,3% 2,2% 1,9% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Main Tenants 18

19 PORTFOLIO Property Type City State Acquisition Date Nº of Properties Owned GLA (sqm) Panamérica Park Office São Paulo SP 29/05/ Glória Office Rio de Janeiro RJ 17/07/ Alphaville Office Barueri SP 31/07/ Bolsa RJ Office AAA Rio de Janeiro RJ 27/08/ Celebration Office São Paulo SP 03/09/ Icomap Office Rio de Janeiro RJ 12/09/ São Pedro Office São Paulo SP 28/09/ Vargas Office Rio de Janeiro RJ 28/09/ Henrique Schaumann Office São Paulo SP 14/11/ Ed. Comercial Indaiatuba Office Indaiatuba SP 20/12/ Santo Antônio Office São Paulo SP 17/01/ São José Office São Paulo SP 17/01/ Souza Aranha Office São Paulo SP 31/01/ Alexandre Dumas Office São Paulo SP 03/12/ Ouvidor 107 Office Rio de Janeiro RJ 10/12/ TNU Office São Paulo SP 16/03/ CBOP - Ed. Jacarandá Office Barueri SP 12/04/ RB 115 Office Rio de Janeiro RJ 02/06/ Ed. Manchete Office AAA Rio de Janeiro RJ 30/06/ Ed. Ventura - West Tower Office AAA Rio de Janeiro RJ 12/08/ Águas Claras Office AAA Nova Lima MG 29/03/ Chucri Zaidan Office AAA São Paulo SP 29/03/ Barra Funda Office São Paulo SP 29/03/ Barra da Tijuca Office Rio de Janeiro RJ 29/03/ Brasília Office Brasília DF 29/03/ Porto Alegre Office Porto Alegre RS 29/03/ Ed. Ventura - East Tower Office AAA Rio de Janeiro RJ 30/04/ Ed. Paulista Office São Paulo SP 29/03/ Panamérica Green Park I Office São Paulo SP 29/05/ JK Complex - Tower B Office AAA São Paulo SP 29/03/ Sub-total Office Galpão SBC Industrial São Bernado do Campo SP 29/03/ Galpão DF Industrial Brasília DF 29/03/ Sub-total Industrial Souza Aranha Office São Paulo SP 31/01/ Sub-total Developments Panamérica Green Park II Office São Paulo SP 29/05/ Panamérica Green Park III Office São Paulo SP 29/05/ Ed. CES II Office AAA Rio de Janeiro RJ 29/03/ Ed. Bayview Office AAA Rio de Janeiro RJ 29/03/ Sub-total Landbanks Total

20 BUILD-TO-SUIT (BTS) PORTFOLIO Properties City Region (CBRE) Owned GLA (sqm) Águas Claras Nova Lima n/a Chucri Zaidan São Paulo Marginal Barra Funda São Paulo Other Barra da Tijuca Rio de Janeiro Barra da Tijuca Porto Alegre Porto Alegre n/a Total Lease Contracts Breakdown Lease Contracts Breakdown (% Revenues) (% ABL) 14% 13% 86% 87% BTS Contracts Typical Contracts BTS Contracts Typical Contracts 20

21 PROJECTS UNDER CONSTRUCTION / TO BE DEVELOPED BR Properties invested R$6.0 million in greenfield projects during 1Q16 and will invest additional R$2.9 million in Projects Segment Type City / State Region (CBRE) Owned GLA (sqm) Total Estimated Capex (R$ mm) Investment Completion (%) Estimated Delivery Panamérica Green Park I A Office Development São Paulo / SP Marginal R$ % Delivered Ed. Vargas A Office Retrofit Rio de Janeiro / RJ Downtown R$ % Delivered Complexo JK - Tower B AAA Office Redevelopment São Paulo / SP Marginal R$ % Delivered Souza Aranha A Office Development São Paulo / SP Marginal R$ 22 87% 2Q16 CES II A Office Landbank Rio de Janeiro / RJ Downtown n/a 0% n/a Bayview A Office Landbank Rio de Janeiro / RJ Downtown n/a 0% n/a Panamérica Green Park II A Office Landbank São Paulo / SP Marginal n/a 0% n/a Panamérica Green Park III A Office Landbank São Paulo / SP Marginal n/a 0% n/a Development/Retrofit CAPEX Schedule (R$ thousand) Capex Schedule Q15 2Q15 3Q15 4Q15 1Q16 Rest of 2016 E Panamérica Green Park I Ed. Vargas JK Complex - Tower B Souza Aranha Total Existing Properties / Developments and Landbank Ratio (% Market Value) 5% 95% Existing Properties Developments 21

22 CAPITAL MARKETS BR Properties common stock is traded on the Novo Mercado listing segment of the São Paulo Stock Exchange (BM&FBOVESPA) under the ticker BRPR3. Stock Performance (BRPR3) 1Q16 1Q15 var % Total Number of Shares % Free Float (%) 99% 99% 0% Stock Price (average for the period) 8,27 8,71-5% Stock Price (end of period) 8,80 11,06-20% Market Cap end of period (R$ million) % Average Daily Trading Volume (R$ million) 6,74 31,16-78% Average Daily Traded Shares % Average Daily negotiations % * For comparative purposes, the historical stock price was ajusted according to the extraordinary dividends paid in December 2015 (R$2.01) Performance BRPR3 1Q16 40% 30% 20% 10% 0% -10% ADTV BR Properties Ibovespa % - Dec-15 Jan-16 Feb-16 Mar-16 Shareholder Base Distribution 51% 5% 6% 38% Brazil United States Canada Other Index Weight BRPR IBrX 0,28% IBrA 0,27% SMLL 2,98% IMOB 10,59% IGCX 0,41% IGCT 0,34% IGC-NM 0,60% ITAG 0,36% IDIV 1,82% Divulgação de Resultados 3T

23 INCOME STATEMENT Income Statement 1Q16 1Q15 var % Gross Revenues % Leasing % Office % Industrial % Retail n/a Services Rendered % Deductions from Gross Revenues (9.399) (15.646) -40% Taxes (PIS/Cofins and ISS) (8.916) (14.174) -37% Deductions (483) (1.473) -67% Net Revenues % Cost of Leased Properties - - n/a Gross Profit % General and Administrative Expenses (28.176) (27.448) 3% Operating Expenses (13.254) (6.308) 110% Personnel Expenses (5.002) (7.649) -35% Management Fees (2.758) (5.444) -49% Stock options (363) (1.444) -75% Vacancy Expenses (6.798) (6.603) 3% Net Financial Result ( ) -115% Financial Income % Financial Expenses ( ) ( ) -58% Other Operating Income/Expense (968) (810) 19% Gain (Loss) on Sale of Investment Properties n/a Gain (Loss) on Appraisal of Investment Properties (23.450) % Income (loss) before taxes % Income and Social Contribution taxes (26.270) (14.793) 78% Deferred taxes (34.194) -136% Income (loss) before Minoritary Interest % Minority Interest (1.022) (1.377) -26% Net Income (loss) % EBITDA Composition 1Q16 1Q15 var % Net Income (loss) before Minority Interest % (+) Deferred Taxes (12.441) % (+) Income and Social Contribution Taxes % (-) Minority Interest (1.022) (1.377) -26% (+) Depreciation % (+) Net Financial Result (41.760) % EBITDA % EBITDA Margin 62% 192% -130 p.p. Adjusted EBITDA Composition 1Q16 1Q15 var % EBITDA % (-) Gain (Loss) on Appraisal of Investment Properties ( ) -112% (-) Gain (Loss) on Sale of Investment Properties (5.348) - n/a (+) Other Operating Income % (+) Stock options % (+) Bonus Provision % (+) PIS/Cofins on Non-cash Gains on the Perpetual s Buyback n/a Adjusted EBITDA % Adjusted EBITDA Margin 80% 86% -6 p.p. Adjusted Net Income Composition (FFO) 1Q16 1Q15 var % Net Income (loss) % (+) Deferred Taxes (12.441) % (+) Income Taxes on Property Sales n/a (-) Gain (Loss) on Appraisal of Investment Properties ( ) -112% (-) Gain (Loss) on Sale of Investment Properties (5.348) - n/a (+) Non-cash Losses on Exchange Rate Variation n/a (-) Non-cash Gains on Exchange Rate Variation (65.335) - n/a (+) Non-cash Variations on Derivative Instruments (1.194) (1.920) -38% (+) Non recurring tax on dividends of Real Estate Funds (FII) n/a (+) Stock options % (+) Other Operating Income/Expense (Sale of Assets) n/a (+) PIS/Cofins on Non-cash Gains on the Perpetual s Buyback n/a (-) Non-cash Gains on the Perpetual s Buyback (55.726) - n/a Adjusted Net Income (FFO) % Adjusted Net Income Margin (FFO Margin) 8% 18% -10 p.p. Divulgação de Resultados 3T

24 BALANCE SHEET ASSETS 03/31/ /31/2015 var % Current Assets % Cash and Cash Equivalents % Accounts Receivable % MTM on Derivatives n/a Straight Line Rent Receivable % Properties Available for Sale - - n/a Pre-paid Expenses % Anticipated Taxes / Recoverable Taxes % Advances for Acquisition of Real Estate - - n/a Other Accounts Receivable % Non-Current Assets % Judicial Deposits - - n/a Other non-current Assets % Equipment % Investment Properties % Intangible Assets % Total Assets % LIABILITIES 03/31/ /31/2015 var % Current Liabilities % Loans and Financing % Derivative Instruments n/a Suppliers % Payables for Acquisition of Real Estate % Provision for Salaries and Employee Contributions % Taxes Payable % Provisions % Labor Obligations % Dividends Payable % Other Accounts Payable % Non-Current Liabilities % Deferred Income and Social Contribution taxes % Loans and Financing % Other Non-Current Liabilities % Shareholders Equity % Shareholder Capital % Shareholder Capital to be paid in - - n/a (-) Issuance Expenses (47.288) (47.288) 0% Issued Stock Options % Capital Reserve % Income Reserve - - n/a Net income (Loss) for the period n/a Additional Proposed Dividend Payment - - n/a Available Surplus ( ) ( ) 0% Minority Interest % Total Liabilities % Divulgação de Resultados 3T

25 CASH FLOW STATEMENT Consolidated Cash Flows 1Q16 1Q15 Cash Flow from Operating Activities Cash Flow from Operations Income (loss) before taxes Depreciation and Amortization Property Fair Market Value ( ) Straight Line Rent (6.513) (1.845) Interest and Monetary Variation on Loans and Financing Interest on Perpetual Bond MTM (360) MTM on Swap (4.783) (1.560) Minority Interest (1.022) (1.377) Net Exchange Rate Variations (65.335) Losses (Gains) on Derivative Instruments (8.282) Financial Result on the Perpetual s Buyback (57.532) - Stock Option Plan Results on Sale of Investments (2.980) - Other Variations in Assets and Liabilities (30.085) ( ) Accounts Receivable (19.189) Recoverable Taxes (23.475) (58.089) Advances for Acquisition of Real Estate - - Properties Available for Sale - - Other Assets (2.376) Payables (208) Payables for Acquisition of Real Estate - - Provision for Salaries and Employee Contributions (21.376) Provision for Employee and Management Bonuses 450 (14.240) Other Liabilities (9.735) (17.018) Cash Flow from Investment Activities (10.939) Net Proceeds from Sale of Assets Fixed Asset Purchases (107) (77) Reductions in Fixed Assets 1 - Acquisition of Investment Properties (8.991) (15.863) Net cash from Incorporation - - Receivables on Gains with Financial Instruments Payables on Losses with Financial Instruments - - Changes in Ownership Interests in Subsidiaries Cash Flow from Financing Activities ( ) ( ) Capital Increase - - Gain and Loss from Sale of Shares - - Costs from Equity Raising - - Dividends Paid - - New loans and financing - - Payment of Loans and Financing ( ) ( ) Stock Buyback - - Increase (Decrease) in Cash and Cash Equivalents ( ) (80.292) Cash Balance At the beginning of the period At the end of the period Divulgação de Resultados 3T