BRMALLS Opens Shopping Sete Lagoas

RIO DE JANEIRO, Oct. 5 /PRNewswire/ -- BR MALLS PARTICIPACOES S.A. (OTC: BRMSY; BM&FBovespa: BRML3), a publicly held company headquartered at Avenida Borges de Medeiros n. 633, 1st floor in the city and state of Rio de Janeiro ("BRMALLS"), hereby announces it opened today Shopping Sete Lagoas, in the city of Sete Lagoas, Minas Gerais.

Shopping Sete Lagoas is the first mall development in the city of Sete Lagoas, which is the only city within the top 10 cities in the state of Minas Gerais that did not have a shopping mall.

Highlights of Shopping Sete Lagoas:

• Located only 65km away from Belo Horizonte;
• Zone of influence covers 19 municipalities or 400 thousand consumers, of which 47% belong to the middle and upper-middle classes;
• R$1 billion per year consumer potential in its area of influence;
• Largest city in the region, with a population of 220 thousand inhabitants, growing at 2.35% a year;
• GDP per capita is 14.4% higher than Brazil's average;
• The city is an important industrial hub with more than 4,000 companies including Ambev, Iveco, Sadia and Elma-Chips, besides having 6 universities.

Shopping Sete Lagoas will be a landmark destination to the region, comprised of 8 anchors and megastores, including Magazine Luiza, C&A, Marisa, Ricardo Eletro and Ponto Frio, among others. Additionally, the mall will have 112 satellite stores, including Arezzo, Colcci, Checklist, M. Officer, Chilli Beans and Santa Lolla.

Among its entertainment options, is a movie theatre that will bring the first 3D cinema to Sete Lagoas. Furthermore, with a welcoming atmosphere and an innovative architecture, the mall offers a food court for up to 500 people and 1,000 parking spaces.

Construction of Sete Lagoas began in November 2009 and ended in less than a year, in October 2010, as planned in the initial construction schedule. The total capex for the project was R$49.3 million, representing a capex/m2 of R$3,000, the lowest among BRMALLS development projects, in great part due to the efficient optimization of the construction period. Shopping Sete Lagoas will open with 100% of its GLA leased, above our initial assumption of 8% vacancy.

We expect the mall to generate to BRMALLS approximately R$8.0 million of stabilized NOI, compared to R$7.4 million announced previously. The internal rate of return (real and unleveraged) of the project increased 70bp reaching 19.0%, and its IRR (real and leveraged), increased to 26.2%. The stabilized cash on cash return increased 160bp to 22.0%.

With the opening of Shopping Sete Lagoas, BRMALLS raised its owned GLA by 11,502 m2, reaching a total of 533.4 thousand m2 and the total GLA by 16,431 m2, reaching 1,131.8 mil m2. Our average ownership interest increased from 46.8% to 47.1%. Furthermore, we increased the number of malls in our portfolio from 37 to 38 malls, managing a total of 27 malls and leasing 30 malls.

ABOUT BRMALLS

BRMALLS is the largest integrated mall company in Brazil, with a portfolio of 38 malls, comprising 1.1 million m2 of GLA and 533 thousand m2 of owned GLA. BRMALLS is the only shopping mall company in Brazil with nationwide presence and targeting all income segments.

SOURCE BR MALLS PARTICIPACOES