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Good morning, ladies and gentlemen. Welcome to CIM Video Conference, Discuss the Fourth Quarter of 2021. This video conference is being recorded and the replay can be accessed on the company's website, ri.cim.com.br. The presentation is also available for download. We would like to inform the attendees who will be only watching the video conference during the presentation. and then we'll start the Q&A session when further instructions will be provided. For those who are watching the video conference in English, these are the suppositions of SIN administration and also the information that is currently... These declarations should involve risks and uncertainties and they regard future events, so they depend on circumstances that might or might not happen Investors, analysts and journalists should consider that events on the macroeconomic environment, the segment and other factors may have the results different from what expressed in the prospective declaration. We have in this video, Mr. Thiago Muramar, the CEO of Sim and Mr. Héctor Leitão, CFO and IRO of the company. Now, I would like to give the floor to Mr. Thiago Muramatsu, who will start the presentation. Please, Thiago, you can proceed. Good morning. First of all, I'd like to thank for your time, your interest on following up our results. I believe 2021 and 2022 were two years that were really atypical and A year later, after 2021, we forget about the turbulence of the beginning of the year here in Sao Paulo. We started the year with the shopping malls and stores closed. March and April, the development closed here at the company. There was lots of changes on the business model of the companies. and instability because of the advance of the pandemic up to 2021. And then we had a second semester in general, lighter on health and the pandemic, but there was a process, a macroeconomical process in Brazil that was so turbulent as the sanitation crisis, but because of these difficulties. And in spite of these difficulties, we had 2021, a very special year. This year, we had more transactions. So since the beginning of the year, January, February, we announced an association that we have with XPX. We announced also in the beginning of the year, the transaction of BH. and also a debt emission. And most of the things that we negotiated and treated in 2021 were fruitful in the final quarter. So this quarter was filled with transactions, highlighting the first one that was the biggest one that we have ever executed, the sale of our portfolio of AAA transaction in Faria Lima. So we chose separate transactions, one with Brookfield, we sold our financial center participation on MLO with Brookfield, total value also 1 billion 0.8, and this transaction of 105 million, 480 million. six in square meters in Berry malls. We were partners this transaction within our strategy since our follow on. It was meaningful to have, to leave the assets that we can control. And then we had one more transaction selling a share that we have two thirds of the share that we have in CLB. That is our project for logistic warehouse with the value that was interesting in monetary values and also high profitability were carrying it for many years and the acquisition to conclude the year of five floors in tower D of JK, WT, JK. We had almost the totality of both towers, D and E. It was five floors missing that we acquire after the transactions. So the transactions that we had in the main triple A's was 36,000 of area and the acquisition of the towers a little bit more than 22 square meters. So it was meaningful to have this acquisition in addition to the value of this strategic consolidation so we can have 100% of the building and complementing a little of what we delivered, no transactions. We had a debt emission in April, 2021. And part of the resources that we raised with the sales we prepaid in January, the seventh, the venture and the antecipate rescue of the ninth. And outside the context of business, financial business, sales and acquisition, and also debt, in the middle of the transactions, we could communicate our first ESG report. In the final call and mention about it, we showed everything that we have in our assets, not only our assets, but also the assets that are under our management. practical aspects on the environmental. We show in our institute what we do on social and everything we have on governance, new market and also internal governance that is superior to the minimum requires to be within this new market. Advancing to the next slide, talking about the recovery. This recovery, I believe, Little by little, it's to lose the importance because I believe the restrictions are decreasing. We have in our portfolio just one restriction. It's occupation restriction building. And I believe that the advance of vaccination program and also the contamination is not so severe. taking us back to normal life in our shopping malls. And I believe this graph is really interesting to follow. And from this point on, it's not so meaningful. Let's talk about the flow of vehicles. We finalized the year, almost 80% of the flow of vehicles in 2019, final quarter. And it's noticeable that some of the malls had a drop on their flow in 2019, that people were not going to the mall. And also the change of the way people transport, most of people using transport apps, private cars, people using alternative transport systems to get to the buildings So when you see the flow of people in our shopping malls, it's disconnected. We have similar to the flow in 2019. And the sales, when you see the sales conversion, the final quarter, we were above 90% compared to the sales in 2019. And we see that the average ticket is increasing. And we do believe that with the normalization of the flow in the malls, the sales will increase meaningfully from this point on. Advancing this slide talking operational performance of our assets, these graphs of occupation, physical and financial reflect the portfolio that we sell. Just to give you the dimension, of our portfolio, it was a little bit more than 30% compared to BL that was sold. 99% occupation, of course. This will bring down our occupation rate. But when you separate this into Class A, AAA, and shopping malls, we see the advances that we had. Specifically, shopping malls, we could advance compared to occupation in the past. And AAA offices that we sold were the totality occupied. And here in this graph, in this comparison of occupation of AAAs, it's worth mentioning that these five floors that we bought, they are open, they are vacant, We have an interesting work to work on this real estate already with good demand above what we expected. I believe it's a matter of time to fill this gap on AAA offices to Class A offices. We have some groups that are different of offices. We have three buildings in Chacra Santo Antonio, one in Rio de Janeiro, one in Salvador, that is one in Vila Olimpia, and one in Villa Leopoldina, ITM. And within this pool of portfolio class A, ITM is outside this class A category, but it is here. And there is a unique characteristic, peculiar characteristic because of the format that this building was conceived. Its occupation is different from a traditional building. So we have big openings. The building is robust, 45,000 square meters ABL. So it's worth not lease a small occupant of 1,000, 2,000 meters because we have to open up these developments. So we have to make it work totally for a small occupation. The renting process is very different. It takes time, but we are sure we are having dialogues and it seems that it generates, it's attractive. When we remove it, this building, the general context, so the occupation raises meaningfully. I believe there is a special highlight for Birman 10 that we concluded the full rental of this building in December 21, the building that we bought in 19 and we rented half. And there was a dialogue back then to increase occupation, the pandemic hit. And I believe all the tenants held up their expansion movements. But with this improvement of the scenario, we could also rent it. So our portfolio in Chácara Santo Antônio is 100% rented. Class A Rio de Janeiro also full. we have a vacancy in percentage is fairly straight. But when we see the revenue, potential revenue in the area, it's not so meaningful. So I believe this really briefs the occupation of the buildings. When we talk about shopping malls, most of the malls we kept, the occupation rate similar to 2019. with a very small variation in some malls. A very positive highlight is Metropolitano Mall. There was in 2019, the end of the year, 2% of vacancy and we delivered 21 with 3%. So in percentage and area, this mall had a higher evolution in its occupancy and consequently, there was an expressive improvement on its result. So we are trying to be conservative, but we are really optimist in what we have for estimate shopping malls for this year, January this month, operationally speaking was beyond what we expected, but considering results, it was superior to what we estimated for January, February is also a little bit better. So we are really excited with the results that the malls can give this year. We had an operational work that was intensively, and I believe this is reflecting in this bottom line of the shopping mall operations. Talking about sales and the stores, we finalized fourth quarter, 21% above 2020. And in this flow, we finished 2,000,000.3, 1,000,000 below the fourth quarter 2019, and a little bit above of 2020. I believe I mentioned already the flow of hormones. For the financial performance, I pass the microphone to Hector. Good afternoon, everybody. Talking about the revenue, I'd like to reinforce the revenue, the sales, Thiago mentioned on the right hand side. Total revenue net, it was 1.6, 1.3 of this revenue on sales. And it's important to highlight as we had a sales in SP when we sold our share, there are some effects that are complex here in the balance. And it's interesting to all the participants observe the explanatory notes. They are really important complements. We see basically a revenue of 1.3 billion in the revenue and the rest of the profit of the transaction already consolidated in the revenue operational expenses. So the profit of the operation of the sales was 1.2 billion and the revenue of sales was sold a little bit more. 1.9. So it's important to have disclaimer. So things get conciliated. And what about the rental revenue? We had a growth, interesting growth in 2021, 10%. And here we have different effects. a good growth on shopping malls, 18%. And lots of what Thiago mentioned, the increase of flow of vehicles, the increase of sales generated to us an interest increase on rent and OI. And for offices, we had a year where triple A's had a good performance and class A had a performance a little bit worse, especially with the return of ITM spaces that was already programmed. So we conclude the year with 10% of growth and 14.3% of growth compared to 2019, concentrated on AAA buildings. In 2019, it was the acquisition of JK Towers and they matured their revenue for the last two years. And for next slide, Next page, we talk about NOI and as a highlight in this page, I would like to talk about shopping malls and the final quarter there was a robust growth compared to 2020, 50%. And we see a higher growth, superior result to 2019. And I would like to highlight Metropolitano shopping mall since 2019 decreased the vacancy in 12% to 3%. So there was a good reduction on direct cost in that building and rental growth and all the other malls recovering already compared to 2020, except for Cidade de São Paulo that still has a flow lower than 2000, I think because of home office The audience that used to have lunch at the mall, they are not back to their offices. Banco do Brasil Tower, on top of the mall, they are back. 30% of the workers and other offices nearby returned with few people, few staff. 20% of the staff. And then in 2021, we conclude NOI of shopping saw 14.7% growth. and a drop compared to 2019 of 17%, but explained by the first quarter that was bad. So the estimate of impact was 10 million. And why in the first quarter? Because of the closure. It was a measurable impact, a negative impact throughout the other quarters as well, because of discounts and lower rent. I don't know why for buildings now. The year we had the sale of AAAs in November. So this drop was really expressive. 24% is totally explained by the sales of AAA and impact was 10 million. And explained as well when we see year after year, we should have growth compared to 2020 and 2019. So great part. of the impact, great part of the impact compared 19 and 20 is the sales. We lost this revenue in the final months in December. And then we talk about the EBITDA and FFO adjusted here, exclude the non-recurrent effects, especially sales. So we had a year that we had a growth of 14% and a decrease of 2% compared to 2019. And I would like to highlight in addition to NOI that I comment, a good recovery of default of payment impacting 10% positive compared to 2019 and a good efficiency in DNA, excluding the effects and the expenses with the sales that had a positive impact on EBITDA. When we see FFO, the impact is negative of the debt. 21 compared to 20, a drop of 25%. But the impact is 40 million of the debt compared to 2021. So we started from a SELIC of 2 to 9. Now we have a debt connected by PCA, 6.5%. That annually cost is 17%. This was a big detriment. So we have growth that is expressive compared to 19 and 20. Talking about debt. Here, there is a disclaimer, the important sales. We finished the year here accounting with 700 billion. There was sales. in some of SPS when I have partnership and a reduction of capital to leave that partnership. I cannot recognize, I cannot consolidate this SPS. I do not recognize this cash that we had over there. So the effect is 350 million cash entering in our balance from the second quarter on these reductions are ongoing. They are limited companies. It takes them 90 days to get this cash back. Gross debt, 1 billion point six. We decrease in 40 million the debt. Paying Morisono, 60 million update debt. And so we finish with total net debt, 950 million. When we see Covenant Financial, that is a space compared to what we consider a cognate first, what we have the obligation is seven times. And then we always aim four and five times. And then throughout that is the effect of the sales in 2022, we are going to see if this indicators reaches five times. So this is a little bit of the takeaway message for you and Underneath this graph, we can see that the financial expenses had a robust growth this year that was explained by Selic and IPCA, 10% in the end of the year. Next slide, we see amortization schedule. There were two subsequent events that I would like to highlight. The prepayment of 735 million and prepayment 100 million of the nine the battery plus 50 million that were already hired for GB and then we are going to have more extraordinary payments this year 200 and 300 million so that's the strategy of capital allocation get this surplus cash and pay debt that is an investment with a return that has no risk and it's not with Selic reaching levels of 12 percent throughout this year and Then the schedule, this amortization schedule is distributed throughout the years. There's no pressure concerning the amortization for the following years, aligned to our cashflow generation. And the debt price is in DI and 22% in PCA. So throughout the year, we are going to pay some debts. CDI and then we are going to increase the exposure of CPCA as we amortize and maybe in refund finance with another index profile. And then we see the Q&A session now. Thank you so much. Now we are going to open up the floor for questions and answers for investors and analysts. If you would like to ask a question using audio, raise your hand. If your question is answered, you can leave the room clicking in lower hand. If you would like to write your question, use the Q&A box with your name and company. We are getting all the questions. The first question comes from Mr. Elvis Credential. Elvis, you can open your microphone, please. Good morning, Tiago and Hector. I have two questions. The first is about the office's portfolio. How do you see the pipeline for rental in 2022? And how do you see leasing spread? Because there are regions with high vacancy. What do you think? you need to be more aggressive in prices to rent these buildings that you have. And the second question is about M&A. You were really active in the final months, but I'd like to understand if you see room for more recycling this year, especially on the demand side, on your assets and the other end as well. How do you imagine the buyer if you could have a movement because you have firepower of PPSPX. That's it, thank you so much. Elsiu, how are you? Let's see, I'll try to answer your questions. I believe on the demand side, I'd like to remind you that although we had this portfolio AAA sold, we keep on managing it for Brookfield and CPIB the current owners. Answering your questions about prices, we have seen that it's really heated, this demand. In the end of the year, we have the rental of our portfolio that we kept indoors in Birman 10, and also the acquisition of these five floors with lots of demand. In the portfolio that we sold, we had 1% open vacancy and this 1% is being demanded as well. And talking about prices, the negotiations that we are doing on revision and eventually renewal, we could get better prices above 15, 20% higher. So this region here, Faria Lima and JK, they have a small supply and a growing demand. So it's healthy normally. For what we see, a demand that is really interesting with prices, for example, of our building WTJK. We bought it and the performance is better than our underwriting. We have these floors open vacant that we can acquire in levels that are above what we had imagined 180 to 100 reais. Just to have an idea on how this demand is high. I don't know if I have answered the first part of your question. About M&A. The profile of assets that we currently have in our portfolio, talking about recycling, they are obviously not so liquid than the other buildings that we saw in the end of last year. A potential buyer for this type of asset, a mass portfolio would be real estate funds. because of the interest rate, they are not the best way of selling. So we do not have any, we are not in a hurry for any movement. As we said in the first moment of the sales of our portfolio AAA, what we have, we are aware of the situation not to lose any opportunity when it comes for acquisition or sales. And talking about AAA assets that are closer to the type of real estate that PCP and eventually SPX would like to get into, we have seen opportunities of acquisition as well, but we are still in our pipeline under construction. It's ongoing. We left at the end of the year so we can execute all the transactions. Our partners here talk, but nothing so hot, not now, okay?

That's great and it's clear, Thiago. Thank you so much. Mr. Eduardo Salman, the next question is yours.

Mr. Eduardo, you can open your mic and ask your question. Good morning, Chamu and Hector. How are you? Good morning. Three questions, very brief. This strategy asset like that you are adopting, of course, your AAA offices are in this line and the final acquisition also fits in this line when you have a lower percentage, but your portfolio on shopping malls And also, A is not in this line, not yet. What is your idea to transform it into asset-like sales? The previous question was similar to this. The idea is to mature or to look for a buyer. We are going to see this transaction on BR Malls as well. Do you have any idea to transform your portfolio asset-like? The second, Thiago, you mentioned but I do not understand your portfolio A in addition to ITM and things that are outside Sao Paulo, where else is there vacancy in portfolio A? I will start with the last one because it's the easiest one. We have the building Brasilio Machado, this one that is a vacancy that is high, a situation that is very specific and you were treating with the partners. and we could solve it. So this year we can follow and rent it. We have in our participation 4.5 thousand meters. That is another vacancy in addition to ITM in São Paulo. And talking about the strategy of to be asset, like our position starting with M&A as Elvis commented, We have PPIP and we also have SPX. We are partners investing through funds with other investors and our percentage is smaller. These two work firms on capital, in addition to our own capital, the idea is to work with percentages that are lower whenever possible to work with the capital of these partners. What we have In our offices, we have basically two-thirds of the portfolio of the property opposite to an asset-like strategy like we had in JK. We acquired 30% and the partner bought 70%. This is a different configuration of companies, this association and the percentage were established in 2016, 17. And now part of this portfolio is already located, rented. with long agreements. There is no contract out of these ones that are about to expire. We have an agreement that is renewed for five years and 10 years. We are really nice and maintaining the occupancy of these assets. And I believe that the difficulty is always having a buyer side dialoguing with us. So eventually, we can have a divestment partially or totally. So as I mentioned, we are aware, there is no pressure, we are not in a hurry, but if someone would like to buy it, we buy it. As we have in AAA with our partners and Class A buildings similar to Birman, we have been talking to people active prospection, eventually to have an acquisition.

And finally, the shopping malls.

The movement on PR malls, I believe we are not participating of any of these conversations. The conversations are on, but I'm not participating I'm not going to place an opinion about the portfolio. We showed here that in the final quarter, the performance was better than 2019. The estimate that we have for this year is a better year than 2019. And I believe that we start entering a level of maturity of these assets. but today we still think we have to squeeze these two in shopping malls portfolio. So we are not thinking about it actively and not even divestment. And then we are putting things into practice. The expansion of the mall, we have the expansion under development ongoing in three of the six malls that we have. Thiago, thank you for the answer. Can I have a follow-up question? Yes. Because of the sales and also because of the capital reduction, 300 million to the company short-term. I'm asking, I do not know if you can answer. Short-term dividend, is that an expectation? You can ask, you can ask. It's okay. You can ask whatever. I do not know if I'm going to answer or not. No, no, I'm just joking. I'm joking. So we had a very robust distribution in the end of the year. Also the minimum dividend that we had for 2021. So we do not have a specific conversation to distribute the dividend. It all depends. if we are going to allocate this capital more efficiently. That's what, for a company that is intensive on capital, capital allocation is the most important part of this discussion. It's going to be if we have use or not for this capital and the efficient use for this capital rather than having a dividend or put this money in cash or any other business.

Next question is Camila Bocci. Camila, you can open up your mic. Your voice is very low.

My question is about your association with SPX. You said that you are going to invest but also manage the funds and the projects. And if you have an update of the status of this project. Great, Camila, thank you for the question. How is the configuration of this association? We have a JV 5050 with the X in the management. So we have this management company for funds and assets, focusing on real estate, When we have 50%, XP has 50%, and Pedro Douto, that was our CEO, he is the manager of these assets now. So now we have a fund, FIPI, multi-strategy, with some investments already consolidated. In the case is CLB that I commented in this call. is the fund more than 300 million, and then we have another project in collaboration, household project. It is an extra capital that we are studying four and five projects to allocate it. Specifically talking about CLB, that is the biggest one in this fund. We have already started the construction work. It was approved last year. And then we have already started the work there.

Land leveling, hiring.

Great part of what civil construction work for the first phase. The term that we have, we are co-investor in this fund. We have a percentage. And we have a commitment of have this investment, a little bit of 60 million in funds, SPX, more 60 million to have the fame skip the game, putting a small percentage, 5 and 10%.

And these funds

and investments, there are several ideas that we have been discussing. We cannot talk about them yet. What we have to talk about, I believe that what is interesting is to identify that we are not focusing in a single asset class. We have been studying offices and also developing of logistic warehouse and household corporation. for becoming partners with some development company by land for exchange. And for that, we have a big support, especially on household development project.

Different from what we have, that is a FIPI.

Focusing on tier and warehouse for development is a development for sales. As soon as it's open and located and rented. The profile is a little bit different from what we had in the company. So that's it. I don't know if I have answered all your questions.

Yes, it's clear now. Thank you. Andrea, the floor is yours.

Good morning, everybody. Thank you so much for the presentation. I'd like to talk about shopping malls. We saw an improvement of revenue on this quarter. When we see the sales, they are under what it was in 2019. Can you talk about this performance in the corporate level asset that is going up, that is positive already, another one that hits your attention? to see your point of view. Thank you so much for the question. It's similar to what I talked in the last call. We can separate the malls into blocks. I believe that the malls that depend on passage, they have a location that is privileged for the flow of passengers. Cidade de São Paulo Shopping Day, they suffer more because of the lower flow of people to work, to go to school every day as we see it. But these malls are improving better. They are recovering better levels similar to 2019. This will happen in the second quarter this year, 2022. And the other malls, if I'm going to number Tietê, Metropolitano Mall, They were mature before the pandemic. These malls are from 2013. They get economic cycle in Brazil that was bad, but with robust growth on sales and rent. And they keep on answering well to this recovery. Just to give an idea, in December, Metropolitano Mall and Tietê Mall, they were closed. Tietê overcame in 2019. It was excellent Christmas, and Metropolitano was near 19, but NOI of this mall overcame 19 because we have a higher efficiency on default and condominium fee reduced 50% nominal since then. And Gran Plaza is a leader mall in Santo Andrea, recovering well, but its growth is flat, is not as robust as the maturation malls as I commented before. Cerrado is also a mall where the area is Goiânia, it's a growing area, also growing double digits since it's opening, and this mole has been recovering well, but as the shopping is in maturation, opening 16, the region is primary, to be consolidated, this mole suffered more with vacancy, and these two effects are opposite the mole that grows more because it's maturing, but there is a frailty generating higher vacancy during the pandemic. In general, that's it, and Christmas was excellent, generating good results. Financial results in general were coming 19, almost in 10% in NOI. February is also an interesting month to us. The perspective is good. And it's confirmed for this year that the ball will have a recovery that is very robust. I do not know if I have answered all your questions.

Yes, you have. It's clear. Thank you.

To ask your question, you click on the button, raise hand, or you can write your question in the Q&A box. We are getting more questions. No further questions. We conclude the Q&A session. I would like to pass the microphone to Mr. Thiago for his final considerations. Please, Thiago, go ahead. I believe we have discussed a lot. The year of 2021, we talked about our expectations for 2022. Just to conclude, I believe that we have a year, although lots of challenges in the macroeconomic scenario and political as well. We have here the operational aspect when we can work Intensively, we have been working on it and the numbers of 2021 reflect our work. And we are really optimistic on the performance of our assets this year and this business model that we have and we are trying to apply. So we would like to invite you all investors and if you have comments, want to talk to me or Hector, feel free to contact us. directly or through Felipe and Bruno in our RI channel. Thank you so much and have you all a great day. The video call is closed. We thank you so much for your participation. Have you all good afternoon.