Felipe Vaz

Real Estate Funds

REAL ESTATE
Analyst

FUNDS (FII)

DECEMBER/2020
SANTANDER CORRETORA
  Our Coverage

 Sector Overview

AGENDA
 FII Market and Opportunities

 FII Portfolio
  Our Coverage

 Sector Overview

AGENDA
 FII Market and Opportunities

 FII Portfolio
 509 CVM REGISTERED

282 LISTED B3
FOCUS OF THE COVERAGE
81IFIX

50+
NEGO
TIATED

*Source: Real Estate Market Bulletin - B3 (Oct/20), Quantum-Axis and Santander

OUR ANALYSIS
PROCESS
ACTIVE STANDARD /
PORTFOLIO LOCATION
AAA / AA / A / B… Growth Axes, Geographical
Diversification
TYPOLOGY
CONTRACTS
EXPIRATION AND
Atypical vs. Typical
REVISION CYCLES
TENANT QUALITY Lease Value vs. Current Market

Operational Segment, Ratings…
VALUATION
Market Value vs. Valuation,
Replacement Cost
YIELDS
Yield FII x Yield IFIX,
Macro/Interest Cycle…
MANAGEMENT EXPERTIS
History, Governance
PRODUCTS/REPORTS
FII Weekly Radar
- FII Relevant Facts
- Sector News
- FII Market Highlights
- Data and Indicators of 120 FIIs (to
download in pdf. or excel)
FII Portfolio Themed Reports
- Focused on the various
- Monthly report
segments of the real estate
- Recommended Portfolio
market
- Sector Overview
- In the 1st, an overview of the
- FII Individual Fact Sheets
US REITs market and an X-ray
of the REITs traded on B3 via
BDRs.
FII GUIDE

With individual fact sheets of the 46 Real Estate

Funds of our coverage, including:

 Our Opinion
 Recommendation (Buy/Keep/Sell)
 Data and Indicators of the FII
 Properties/Assets Portfolio
 Strengths
 Main Risks
 Highlights and Latest News

Click Here
The material is updated monthly. and Check
FII GUIDE

Number of Guide FIIs - Per Segment FII Managers analyzed in the Guide

Ativos Financeiros 13

Escritórios 9

Logístico / Industrial 9

Híbridos / Outros 6

Shoppings / Varejo 5

Fundos de Fundos 4

Source: Santander Source: Santander

   
   
FII GUIDE

FII Recommendation covered by FII Recommendation covered by

Santander (Quantity and % of the Santander (Quantity by Segment)
Total)
Segment Buy Keep Sell Total
11; 24%
Financial Assets 7 4 2 13

20; 43% Offices 2 3 4 9

Logistics/Industrial 2 5 2 9

Hybrids/Other 3 2 1 6

Shopping / Retail - 3 2 5
15; 33%
Fund of Funds 1 3 - 4

Total 15 20 11 46
Manutenção Compra Venda
Source: Santander Source: Santander
   
  Our Coverage

 Sector Overview

AGENDA
 FII Market and Opportunities

 FII Portfolio
 OFFICES
VACANCY AND OFFER
 
 
 

Vacancy rate of offices in São New Inventory - Offices

Paulo (m² in the city of São Paulo - A/A+)
 
22%
  Annual Average
19% 700,000 395,000
18%
16% 600,000
14% Estimates
13% 500,000
12%
400,000 Annual Average
300,000 75,000
200,000
100,000
-
1 2 0 1 3 0 1 4 0 1 5 0 1 6 0 1 7 0 1 8 01 9 0 2 0 0 2 1 0 2 2 0 2 3 0 2 4
2017 2018 2019 1T20 2T20 3T20 4T20 20 2 2 2 2 2 2 2 2 2 2 2 2

Source: Buildings Source: Cushman & Wakefield and BR Properties

 
 
 
 OFFICES
FIIs WERE MORE ACTIVE IN THE ACQUISITION OF REAL ESTATE
 
 
 
THE CURRENT Comparison of Acquisitions
MOMENT of AAA Offices

2019 2020
• Real estate purchase and sale
transactions may reach BRL 25%

8.5 billion in 2020 (vs. BRL 45%

9.1 billion in 2019)

30%

• FII funding has driven Empresas Imobiliárias

increased transaction activity. Fundos Imobiliários
Estrangeiros Fundos Imobiliários
Empresas Imobiliárias /
Estrangeiros

Source: Valor Econômico / CBRE (11/09/2020)

 LOGISTICS
• Increasing need for e-commerce
• Location, location, location...
30 km radius São Paulo
• Last mile  ( > BRL rent & < vacancy) 

Logistics Condominiums
Gross
Place Qty Leasable Qty%
Area
Brazil 594 23.7 mm m2 100%
State SP 321 13.5 mm m2 54%
30 km
133 5.8 mm m2 22.4%
radius
Gross
Qty Order Price
State of São Paulo Leasable Vacancy
Cond. Price Transaction
Area
30 km radius 133 4.7 mm m2 13.4% BRL 21 BRL 18.1
30-60 km BRL
81 4.5 mm m2 15.5% BRL 15.4
radius 17.9
BRL
+60 km radius 107 4.2 mm m2 21.7%
15.3
BRL 15.2
Source: Buildings  
 LOGISTICS
RENTAL PRICES

Rental Comparison - New

Comparison ofInventory - Offices
National Average Prices and
Logistics Sheds (m²Impact of IGP-M
in the city of SãoCorrection
Paulo - A/A+)
26.2 (BRL per m2 / month)  
25 22% Annual Average 26
19% 23 700,000 395,000 23.7
18% 22 22.7 23.1
22.1 22
16%21 600,000 20.7 21.3 21.2 21.6
20.5 20
20 14%20 19.6 19.5
500,000
Estimates
13%
19 19 18.7 18.5
12% 18.5
19.5400,000
19.3 19.3 19.1 19.1 19.2 19.1 19 19.1Annual
19.1 19.1 18.8
Average
17
16.2 18 18 300,000 75,000
17.5 17 17.2
Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20
200,000
2014 2015 2016 2017 2018 2019 2020
100,000
-
12 13 14 15 16 17 18 1 9 20 21 22 23 24
2017 2018 2019 1T20 2T20 3T20 4T20 2 0 20 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 20
Rio de Janeiro São Paulo Nordeste Preço Pedido Preço com Correção

Source: Q3 Report 20 – Colliers International Source: Q3 Report 20 – Colliers International

   
   
   
 SHOPPING CENTERS / RETAIL
THE CURRENT Shopping Centers in
Operation in Brazil
MOMENT
- The segment most impacted by
the closing of shopping centers
and retail in general
- 100% of shopping centers
reopened with restrictions Source: Hedge Brasil Shopping / ABRASCE Report

Default Rate of the Main Shopping Center

- In the short term: Operators in Brazil
- Potential increase in default 26.2%

and vacancy 16.3%

13.4%
16.0%
12.5% 11.6%
7.8% 8.7%
- In the long term: 2.7%
7.2%
3.7% 5.5%

- May be more impacted by Multiplan Iguatemi BrMalls Aliansce Sonae

the performance of the 1Q20 2Q20 3Q20

economy Source: Q3 2020 Results Presentation - Multiplan, Iguatemi, BrMalls
and Alliansce + Analyst Research
 SHOPPING CENTERS / RETAIL
IMPACT OF EMERGENCY AID

Households benefited by Emergency Same Store Sales (SSS) by Region in

Aid by Region (%) Brazil (%)

North North
61% Northeas
+12.8%
t Northeast
59.1% -10.1%

Center- Center-
West West
Southe
41.8% -33.8% ast
Southea
st
-33.5%
37.1%
South
South
-43.4%
30.7%

Source: Q3 2020 BrMalls Results Presentation Source: Q3 2020 BrMalls Results Presentation and Santander
Federal Government and IBGE. Prepared by Tendência Consultória
Integrada
  Our Coverage

 Sector Overview

AGENDA
 FII Market and Opportunities

 FII Portfolio
 282 FIIs
BRL 109 BI 282 FIIs
BRL 109 BI traded on
Market traded on
B3
Market
Value B3
Value
BRL 119
BRL
BI 119
of PL BRL 213 1.1 million
BI of PL BRL 213
MM/day Investors
MM/day
trading on
trading
B3 on
B3
(2020)
(2020)

MARKET
REAL ESTATE IFIX
IFIX
between
between
2017-2020
IFIX Yield

FUNDS 2017-2020
+51.59%
+51.59%
IFIX Yield
~6.5% pa
~6.5% pa

BRAZIL Assets III

*Source: Real Estate Market Bulletin - B3 (Oct/20), Quantum-Axis and Santander (Base date: 12/04/2020)
SECTOR OVERVIEW

Yield by Segment - Annualized¹

* Source: Santander, Bloomberg and Quantum-Axis (Base date: 12/04/2020)

SECTOR OVERVIEW

Profitability by Segment - Year¹

* Source: Santander, Bloomberg and Quantum-Axis (Base date: 12/04/2020)

  Our Coverage

 Sector Overview

AGENDA
 FII Market and Opportunities

 FII Portfolio
 PERFORMANCE MONITORING
OF THE PORTFOLIO

OF THE 110.1%
PROFITABILITY*

PORTFOLIO Period Portfolio

November +1.23%
IFIX
+1.51%
2020 -8.76% -12.17%
50.6%
2019 +57.92% +35.98%
2018 +15.60% +5.62%
2017 +26.13% +19.44%
12 months +4.03% -2.83%
17 7 7 7 18 8 8 8 19 9 9 9 20 0 0 0 es 18 Since
n- r-1 l-1 t-1 n- r-1 l-1 t-1 n- r-1 l-1 t-1 n- r-2 l-2 t-2 es 20
ja ab ju ou ja ab ju ou ja ab ju ou ja ab ju ou M +110.09% +50.62%
.1
2 Jan/2017
um
Ac

*Source: Bloomberg, Quantum-Axis and Santander (Base date: 11/30/2020)

 OVERVIEW BY
REAL ESTATE FUNDS STRATEGY
PORTFOLIO – DECEMBER
CAPITAL GAIN

%
FUND SEGMENT STRATEGY WEIG
HT
Income 10%
CSHG Renda Urbana (HGRU11) Retail/Education
Logistics/
Income 15 90%
Vinci Logística (VILG11) Income 10
Industrial
Logistics/
BTG Pactual Logístico (BTLG11) Income 20
Industrial

6.4
RBR Alpha Multiestratégia (RBRF11) Fund of Funds Income 10
Mauá Capital Rec. Imob. (MCCI11) Financial Assets Income 15 ESTIMATED
Vinci Offices (VINO11) Offices Income 10
12-MONTH

%
VBI Prime Properties (PVBI11) Offices Income 10
JS Real Estate Multigestão (JSRE11) Offices Capital Gain 10 YIELD *

* Weighted Yield of the Portfolio's FIIs, calculated based on the projected

distributions in the next 12 months, divided by the market value of the quota
on the base date (11/30/2020). Source: Santander and Bloomberg
 Macroeconomic risks: In a scenario of economic recession,
deceleration of consumption, decrease of credit supply and
unemployment, the demand for new properties may be impaired,
weakening new incorporations in the construction sector. In
addition, there may be a reduction in interest in renewals or new
leases, pushing down lease price levels. In Shopping/Retail
Funds, lower economic activity may affect the revenue of
projects that serve as ballast.
Interest rate risk: Changes as in the case of increased interest rate
expectations bring new parameters for the risk-return
combination of assets and reduces the attractiveness of Real
Estate Fund shares in relation to other financial assets, since it
makes less risky assets relatively more profitable.
Real estate price variation: Risk arising from cyclical conditions
of the real estate market, or depreciation of the property with loss
of economic potential of the region in which it is located.
Real estate development risk: In the incorporation of a property,
there are risks linked to the granting of certificates, obtaining
environmental licenses, increasing the costs of raw materials used
in construction, which may impact the progress and prospects of
completion of a work.
Property risks: Related to events that occurred with the Fund's
real estate portfolio, such as floods, fires, among others. These
can be mitigated through real estate insurance contracts.

Credit risk: Related to the reduction in the ability of lessees to pay Portfolio concentration risk: The concentration of the real estate
or even the non-payment of debtors in a portfolio composed of fund portfolio enhances the risks to which the fund is exposed
private debt securities (LCI, CRI etc.). (e.g. cases where the portfolio has a single property, lessee or
debtor).

ASSOCIATED Market risks: The Fund's financial assets, whether real estate or
otherwise, may also suffer changes in the value of its shares and
equity due to changes in market conditions. Even without the
effective negotiation of these assets, any changes in prices end up
Regulatory and legal risks: Regulatory changes (e.g. scope of
leases or tax concessions granted to investors) may affect the
attractiveness of the investment.

RISKS
being reflected in the value of the fund's shares as a result of the
marking at the market price of the portfolio, which may adversely
impact the negotiation by the investor that chooses to divest.

Liquidity risk: Although the liquidity in the secondary market of

the FIIs is higher compared to an investment made directly in a
property, there is a possibility that, at a time of high market
volatility, there will be greater difficulty in selling the quotas.

Vacancy risk: The risk of vacancy corresponds to the risk of a

property being vacant for a period of time, negatively impacting
the fund's profitability until a new tenant is found. In addition to
disrupting the revenue generation process, vacancy increases the
Fund's costs as it will be responsible for paying property taxes
and condominium expenses for the period in which the space is
vacant.
 This report has been prepared by Banco Santander (Brasil) S.A. and is
intended for investor information only. It does not constitute an offer to
buy or sell any securities contained or not in this report (i.e. the
securities mentioned herein or from the same issuer and/or their
options, warrants, or rights with respect thereto or any interests in such
securities). This report does not contain, and does not have the scope to
contain, all relevant information regarding the subject matter addressed
herein. Therefore, this report does not and should not be considered as
a representation and/or warranty as to the completeness, accuracy and
veracity of the information contained herein. Any decision to buy or
sell securities should be based on existing public information on such
securities and, where appropriate, should take into account the content
of the corresponding prospectuses filed, and the provision, in the
governmental entities responsible for regulating the market and the
issuance of the respective securities.
 
The information contained in this report was obtained from sources
considered to be secure. Although all reasonable steps have been taken
to ensure that the information contained herein is not uncertain or
misleading at the time of its publication, we do not guarantee its
accuracy, nor that it is complete, and we do not recommend relying on
it as if it were. All opinions, estimates and projections contained in this
I. The analyses contained in this document present investment
risks, are not assured by the facts contained herein or obtained
independently by the investor, nor do they have any type of
guarantee or security of the analyst, Santander or any of its
subsidiaries, controllers or companies under common control;
II. This report does not contain, and does not have the scope to
contain, all material information regarding the sector subject to
analysis within the scope of this report;
III. There is no relationship with any company cited in this report, or
with any person acting on its behalf and order, that may affect
the impartiality of the report or that constitutes or may constitute
a conflict of interest;
IV. There is no relationship with an individual who works for any
company mentioned in this report;
V. He is not, and his spouse or partner is also not, directly or
indirectly, in their own name or that of third parties, the holder
of any of the securities mentioned in this report;
VI. He is not, and his spouse or partner is also not, directly or
indirectly, involved in the acquisition, disposal or brokerage of
any of the securities mentioned in this report;
VII. He does not have, and his spouse or partner also does not have, a
financial interest in relation to the issuer of any of the securities

DISCLAIMER
report represent our opinion on the date of its issuance and may be mentioned in this report, except for the provisions of paragraph
modified without prior notice, considering our relevant assumptions one of article 13 of CVM Instruction 589; and
and methodologies adopted at the time of its issuance, as set forth in VIII. His remuneration is not directly or indirectly influenced by
this report. revenues from business and financial operations carried out by
  Santander.
Santander or any of its officers or employees may acquire or maintain
assets directly or indirectly related to the companies mentioned herein,
provided that the rules set forth in CVM Instruction 598 of May 3,
2018 ("CVM Instruction 598") are observed. Santander shall not be
liable for direct losses or lost profits arising from the use of this report.
This report may not be reproduced, distributed or published by its
recipient for any purpose.

I, Felipe Vaz Moreira, a securities analyst accredited under CVM

Instruction 598 of May 3, 2018, subscriber and person responsible
for this report, which is distributed by Santander, hereby declare
with respect to the content of this report that the recommendations
reflect solely and exclusively my personal opinion, and were prepared
independently, including in relation to the institution to which I am
linked, under CVM Instruction 598. In addition, I declare the
following:
 
I. This report was based on information based from public and
independent sources, as per the sources indicated throughout the
document;
 Banco Santander (Brasil) S.A., its subsidiaries, its controllers or
companies under common control hereby declare, under CVM
Instruction 598, that:
 
They have a relevant financial and commercial interest in relation to
the sector, the company or the securities subject matter of this analysis
report.
They receive remuneration for services rendered to the issuer object of
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They hold relevant equity interests (greater than 1%) in the share
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They may have (a) coordinated or co-participated in the placement of a
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provided in the last 12 months; (c) expects to receive or intends to
obtain compensation from the companies mentioned in this report for
investment banking services provided in the next 3 months.
DISCLAIMER
They have provided, provide or may provide financial services related
to the capital market, or other type, or perform typical operations of
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There is no relationship with any company cited in this report, or with
any person acting on its behalf and order, that may affect the
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The companies mentioned in this report, their subsidiaries, their
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is not Santander
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a guide toS/A. Allperformance.
future rights reserved.
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projections, as well as all estimates related thereto, contained in this
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READ THE SUPPLEMENTARY INFORMATION FORM,
ESSENTIAL INFORMATION FACT SHEET AND REGULATION
BEFORE INVESTING. DESCRIPTION OF THE ANBIMA TYPE IS
AVAILABLE IN THE SUPPLEMENTARY INFORMATION FORM.
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