brMalls acquired an additional stake of 25.5% of Shopping Iguatemi Caxias do Sul total GLA, located in the city of Caxias do Sul, in the state of Rio Grande do Sul.

With the acquisition, brMalls’ interest in the asset is now at 71.0%, increasing our capacity to implement future transformations on the asset. The transaction is part of the portfolio strengthening strategy, which aims to increase our exposure in core assets (large shopping malls, located in large cities and where we can have active management).

The mall inaugurated in November, 1996, and is part of brMalls’ original portfolio. Its first expansion was carried out in 2009, where 18,000 m² of GLA were added, totalling 30,324 m². The asset is the largest mall in the Serra Gaúcha region, located in the main access to Caxias do Sul, second largest city in the state, receiving visitors from the 24 cities in the Serra Gaúcha region. Anually, over 4 million class A and B visitors come to the mall.

The Iguatemi Caixas do Sul mall integrates an important multipurpose complex in the state of Rio Grande do Sul, including a 12.5 thousand m² Carrefour hypermarket and 2 office towers. Additionally, the complex includes 4 hotels in its surroundings and 1 new hotel under development.

With approximately 150 stores, the mall includes important brands such as Brooksfield, Madero, Cantina Di Paolo, Fast Shop and many others. It also has 2,200 parking spaces, a free kids park called Villagio Kids, a gas station, a Cobasi pet center (opening soon), the only Federal Police office responsible for passport issuance in the region, a notary office, clinical analysis lab, among others.

The investment for the additional 25.5% stake amounted to R$ 84.4 million, paid in cash. We estimate that the additional stake will generate R$ 7.0 million in NOI in 2019, excluding straight-lining effects, representing a nominal entry cap rate of 8.2%.

The transaction reinforces the Company‘s commitment to the portfolio recycling strategy and capital allocation that aims to increase shareholder value.