Title: Hedge Brasil Shopping Acquires 40% Stake in Shopping Jardim Sul, Boosting Portfolio Expansion in São Paulo
Introduction
Hedge Brasil Shopping (HGBS11) has recently announced its acquisition of a 40% stake in Shopping Jardim Sul, a shopping complex located in the Morumbi region of São Paulo. This move allows HGBS11 to increase its presence in the space and expand its portfolio. The purchase was valued at R$ 217 million, amounting to a capitalization rate of 9.3%. This article will delve into the details of the acquisition, the strategic implications for HGBS11, and the broader context of the transaction.
Expanding Ownership with Strategic Acquisition
HGBS11, which already indirectly owned 17% of Shopping Jardim Sul through its portfolio’s ownership of FII Shopping Jardim Sul (JRDM11), has now directly acquired the additional 40% stake. The previous owner, JRDM11, will maintain a 40% ownership, while Aliansce Sonae/brMalls will continue to hold 60% of the mall.
This acquisition aligns with HGBS11’s strategy to actively enhance its presence in the premium assets of São Paulo. With this move, HGBS11 consolidates its position in the region with the highest GDP in absolute values and the second highest GDP per capita in Brazil.
Financial Details and Investment Policy Compliance
The acquisition price of R$ 217 million represents an 8.8% discount compared to the last appraisal of the property. To finance the purchase, HGBS11 issued a real estate credit certificate (CRI) worth R$ 215 million. The term of the CRI is 120 months, and it is indexed to the IPCA with an 8% pa rate and to the CDI rate with a 2.4% pa rate.
HGBS11’s portfolio, prior to this acquisition, comprised shares in 17 shopping centers, with a gross leasable area (GLA) of 182 thousand square meters. The vacancy rate for the portfolio stood at 8.7%.
Strategic Importance and Performance of Shopping Jardim Sul
Shopping Jardim Sul holds a prominent position in HGBS11’s portfolio, as it is one of the top three assets in terms of net operating income (NOI) and operating margin. The acquisition further strengthens HGBS11’s foothold in the retail sector and its ability to generate steady income from its assets.
Closing Thoughts
The acquisition of a 40% stake in Shopping Jardim Sul by Hedge Brasil Shopping (HGBS11) is a strategic move to expand its presence and enhance its portfolio in the competitive São Paulo market. With a focus on premium assets, HGBS11 continues to capitalize on the region’s economic strength and consolidates its position as a major player in the retail sector.
By acquiring the stake previously owned by FII Shopping Jardim Sul and strengthening its partnership with Aliansce Sonae/brMalls, HGBS11 demonstrates its commitment to its investment policy by aligning with its long-term strategic goals.
This acquisition not only bolsters HGBS11’s financial performance and enhances its net operating income but also solidifies the fund’s future prospects in São Paulo. With a majority of its portfolio now invested in target assets in this region, HGBS11 is well-positioned to reap the benefits of its strategic expansion efforts in the coming years.
Summary
Hedge Brasil Shopping (HGBS11) has acquired a 40% stake in Shopping Jardim Sul, located in São Paulo, for R$ 217 million. The acquisition allows HGBS11 to increase its presence in the market and expand its portfolio. Prior to this, HGBS11 indirectly owned 17% of the shopping complex through FII Shopping Jardim Sul but now holds a direct stake. The acquisition price was 8.8% lower than the property’s last appraisal, and it is estimated to have a capitalization rate of 9.3%. The move aligns with HGBS11’s strategy to consolidate its presence in premium assets in São Paulo and further strengthen its foothold in the retail sector. With this acquisition, HGBS11 now has 88% of its portfolio invested in target assets in São Paulo.
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The FII Coverage Brazil Purchases (HGBS11) announced to the market, this Monday (3), the purchase of 40% of Shopping Jardim Sul, located in the Morumbi region, south of São Paulo (SP). For the fraction, the fund paid R$ 217 million.
EITHER (HGBS11) already indirectly owned 17% of the company. This is because the portfolio owned 44.3% of the shares of FII Shopping Jardim Sul (JRDM11) – which in turn owned 40% of the shopping complex.
In the search to increase participation in space, the HGBS11 bought the slice that belonged to the JRDM11which now directly owns 40% of the mall, and has Aliansce Sonae/brMalls as a partner, whose stake is 60%, as shown in the image:
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According to the management of Hedge Brasil Shopping, the acquisition price was 8.8% lower than the value of the last appraisal of the property. In this way, the capitalization rate of the business -how much the space can return to the investor in relation to the amount invested- is estimated at 9.3%.
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For the purchase of 40% of Shopping Jardim Sul, the HGBS11 issued a real estate credit certificate (CRI) – a debt instrument – for the value of R$ 215 million.
Part of the operation is indexed to the IPCA (plus an 8% pa rate) and the other part to the CDI rate (plus a 2.4% pa rate). The term of the CRI is 120 months.
Before the agreement, the portfolio of HGBS11 it had a gross leasable area (GLA) of 182 thousand square meters. The portfolio is made up of shares in 17 shopping centers and has a vacancy rate of 8.7%.
According to a statement from Hedge Brasil Shopping, Shopping Jardim Sul is one of the three portfolio assets with the highest net operating income (NOI). operating margin).
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“The operation is in line with the strategy outlined in recent years and fully complies with the fund’s investment policy,” the document reinforces. “With this acquisition, the fund reaches the volume of 88% of its portfolio invested in target assets in the State of São Paulo and consolidates its presence in a premium asset located in the region with the highest GDP in absolute values and the second GDP per capita highest in the country”, complements the text.
In a relevant fact made known to the market, the administrator of the JRDM11Hedge Investments, confirmed the transaction and detailed the liquidation of the portfolio.
“In order to start the liquidation procedures for the fund, the administrator informs that today, July 3, 2023, was the last day on which the shares in B3 were traded,” the document highlights. “(Therefore), the listing of the fund will be suspended and the shares will cease to be listed as of the stock market session of July 4, 2023,” completes the text.
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