Good morning, ladies and gentlemen. Welcome to the HBR Realty video conference to discuss the results of the first quarter of 2026. This video conference is being recorded and the replay may be accessed on the company's website, where the presentation is also available for download. Please note that all participants will be watching the video conference during the presentation, and later we will begin the Q&A session when further instructions will be provided. This video conference is being presented in Portuguese with simultaneous translation into English. To change the audio, you may click on the globe icon on the lower right-hand corner of your Zoom screen and then choose to enter the English room. You can then select mute original audio.
This video conference will be presented in Portuguese with simultaneous translation into English. To change the audio, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, you can select mute original audio.
Before proceeding, we would like to reiterate that forward-looking statements are based on the beliefs and assumptions of HBR Realty's management and on currently available information. These statements may involve risks and uncertainties, given that they relate to future events and therefore depend on circumstances that may or may not materialize. Investors, analysts, and journalists should take into account that events related to the macroeconomic environment, the segment, and other factors may cause results to differ materially from those expressed in the respective forward-looking statements. Today with us are Mr. Alexandre Nakano, CEO, Mr. Alexandre Dalpiero, CFO and IRO, and Mr. Alexandre Bicudo, COO. I would now like to turn the floor over to Mr. Nakano to start the presentation.
Good morning to all. First of all, I would like to thank you for your time and interest in the company. It's very important to have you here as we share the results of the company and our vision. This will allow you to understand a little bit more about our company and how we envision the future in the next few months. We are also going to talk about our strategy for 2026.
On slide three, we have the highlights. This has to do with the main figures. We had a net revenue of nearly BRL 60 million, net revenue BRL 53 million, and NOI was also very substantial. We have grown 38%. The NOI has grown as well, and this attests to the progress that we made with W Hotel and ComVem. We also give you some more color about SG&A over net revenue, and we are now at a level that makes us feel a lot more comfortable. We have worked hard to improve operations.
We have always focused on costs, expenses, and we do not focus only on revenue, on growing rent, revenues, and sales. The SG&A over revenue is a very important measure for us. Also in relation to sales, BRL 500 million. These are sales that the process started in 2025. In terms of opportunities, we would like to highlight W Hotel, BRL 25 million in terms of operational revenue. It is yet another very important point. The revenue from W is growing very strongly, so the net revenue of this vertical grew 71%, a very robust growth. We also sold two +Box units in Tamboré. We sent it to a storage company in January 2026. In the corporate vertical, NOI is nearly BRL 10 million with a 96% margin. We highlight the revenue of HBR Corporate Pinheiros. We sold this to the Hospital Israelita Albert Einstein.
It is the first expansion of the Hospital Israelita Albert Einstein on this side of the river. We were chosen by Einstein, which made us very proud. This shows that we have been getting it right as we choose land and we develop product. The construction is also right, and the way we market our projects as well. We signed the sale in December, and this was paid in March of 2026. As regards ComVem, if you look at the last few quarters, you will see that growth has been strong in the last few quarters in terms of sales and in terms of rent, and the NOI as well. For the first time, the margin was above 90%. We have been pursuing this very strongly.
We put a lot of energy into increasing the ComVem margin, and the growth has shown the importance of this platform within our portfolio. I am going to talk about the recycling churn strategy. We have a critical mass in terms of ComVem. We have 40 units with over 50,000 sq m of GLA, and 80% of this area is occupied. If you Google active façade on Google, you are going to see lots of news about an occupancy problem. On average, active façades have 80% vacancy in São Paulo, which is the opposite of what we see. Our portfolio has an occupancy rate of over 80%. Bicudo and his team, who is responsible for this platform have done a great job. Bicudo is going to give you more color about how we achieve this and how we are going to continue to work once the new deliveries happen.
In the shopping malls, NOI grew by 4.9% with a margin of 83%. Sales were at approximately BRL 420 million, and the rents have increased approximately 5%, which is what we expected. The growth visible areas are mature in our shopping malls. We are adding 7,000 sq m in the Mogi mall, and we are starting to think about the expansion of another shopping mall. We need to increase the GLA due to the high occupancy rates of these two shopping malls.
Now we are going to talk about ComVem and shopping malls. As Nakano said, we are very happy with the performance of ComVem. We are seen in the market, especially by clients, as good marketers, good planners, and good operators of commercial convenience centers, and this is very important for us. This is reflected in the figures.
Just very briefly, in the quarter, net revenue was BRL 7.3 million, 31% increase relative to Q1 2025. Total sales were BRL 108 million. In the same stores concept, also 5% above Q1 2025. In terms of rents, BRL 10.4 million in Q1, increased by 36%, and FSR, 71% increase. These are very good figures, which attest to the power of ComVem as a platform. In terms of occupancy rate, the occupancy rate has been growing gradually and consistently. In Q1 2026, it was 88%. We are looking for high occupancy whilst trying to increase rents. We have an NOI that expanded 54%, and the margin, as Nakano said, is record at 91%. In the HBR Malls, there is an impact from Mogi and Suzano, mature enterprises in terms of sales, BRL 409.6 million, an 8% growth relative to last year. Suzano grew 13%.
Here I would like to highlight Decathlon, the sports gear grew really well. FSS grew by 6% relative to Q1 last year, especially Olinda with a 7% growth. In terms of total rents, the growth was in the region of 5%, reaching BRL 35.1 million. Olinda was the highlight. We managed to increase rents by 16.5% relative to Q1 2025. Entertainment and education institutions account for that increase. In terms of FSR, rent grew to BRL 24 million, and the highlight is Urupema. Moving on to the operational data. Sales were in the region of BRL 420 million, an 8% growth relative to last year. Average occupation was 93%, and I would like to make some comments. In Mogi, occupancy rate is really good, 98.8%, and this is a mature shopping, so we are trying to improve the shopping mall and to optimize the GLA.
We have been very careful in doing this in Mogi. In Suzano, especially last year, we managed to improve the mix, and this is improving all the indicators. 97.3% of occupancy. Vacancy has to do with a mega store. Once we rent this store out, we will be able to bring vacancy to zero. As for Olinda, occupancy is 89%. It's a shopping mall that is still maturing. After we closed the quarter on April, we managed to close a deal with a cosmetics shop, which has been doing really well. So we are very happy with the prospects for Olinda. In terms of Urupema, occupancy rate is 82%. We are improving the mix of this shopping mall.
We will have a big gym, which is going to open at the end of Q2, and we have other stores which are coming to this shopping mall and make us very optimistic. In general, NOI grew, and the margin is 83.3%. In general, this is what I had to say about HBR Malls.
Now on slide eight, I'm going to give you some more color about our assets for you to understand the quality that we see in these assets and the importance they have within our portfolio. First, we are going to deliver Vila Nova Conceição, which is located between Vila Nova Conceição and Itaim. We have been talking to two or three potential tenants, and we had a proposal to sell, but we didn't move forward with that. But this attests to the liquidity of these assets in the market.
It's between Santo Amaro, Guilhermina Esperança, close to the Ambev building. For those who want to be in Itaim, Vila Nova or Vila Olímpia, it's a good asset at a competitive price. This is how we position this asset. Companies have been approaching us, companies that want to be near the corporate clusters, colleges, but at a more competitive price. Ibirapuera is located on Ascendino Reis with Diogo de Faria. There is a gym that wants to occupy the first floor. We have sold some stores. Also we have been approached for the corporate floors. Moema is across from the Ibirapuera shopping mall and close to the Eucaliptos underground station. We have rented a store to Pão de Açúcar. We have two corporate floors with 2,500 sq m each. It's a great location.
Paulista is located on Avenida Angélica with Avenida Paulista and Rua Minas Gerais. A corporate tower with nearly 10,000 sq m of area. We believe that within this month, we will be closing the deals to rent all the building to a couple of companies at market rate for this type of rent. Even before we get the permits, we believe the whole tower will be rented out. Faria Lima 2 is a corporate building with 32 residential units. The residential units have to do with improving the construction efficiency of the building. We do believe in having residential units on Faria Lima. This building has 32 residential units, a store on the ground floor for 200 sq m. There are two companies looking to acquire these residential units to then rent them out.
These are small units of 40, 50 sq m, which are looked after in this region. Pedroso Alvarenga, which we call Itaim 1, is located between Renato Paes de Barros and Pedroso Alvarenga. Premium location. The GLA is 7,000 sq m plus a store with 350 sq m on the ground floor. We have been approached to rent out the corporate floors and the store because it's a sought-after address. We are going to start working on that on the second semester of the year. Faria Lima will be ready at the end of 2028. Pedroso Alvarenga will be ready in the first semester of 2029. We have delivered the sale of Hilton, Hospital Israelita Albert Einstein, and +Box. For this year, we are going to focus on selling and recycling Faria Lima.
A percentage also of the shoppings in Mogi and Suzano and the ComVem platform. There was a bit of frustration at the end of the year with Faria Lima, which didn't work well, but it gave us an opportunity to reprice the asset. We had an earn-out based on renewing the agreement we had with the tenant. We renewed it with a very good value, a very good amount, which repriced it to the market average in the region. We will be able to reprice it when we try to sell it again. In terms of Mogi and Suzano shopping malls, these are very mature enterprises. We have to look for the best proposal. In these two shopping malls, we want to continue to control and manage, but we have many companies who are interested in it.
This is being dealt with by Bradesco, who has been talking to many players. In the last two or three weeks, we have signed over 15 NDAs, which attest to the interest of funds in these assets. In terms of ComVem, Dalpiero and myself have been talking with three players. One of them is very interested in buying it through a fund. Because of ComVem characteristics, it's a very good asset for this fund. ComVem operates in different geographies, and this allows one unit to offset the results of another unit. This allows a consistency of income, which is sought by funds of this type of profile. ComVem with growing sales, growing NOI, is a very good product for this type of fund. In Q2 and Q3, we should be able to announce a sale of ComVem, Faria Lima, and some percentages of the shopping malls.
Now moving on to slide nine, we are going to talk about the HBR Opportunities vertical. The highlight here, as you can see, is the increase of gross revenue of the W Hotel. We are now having a revenue of BRL 25 million in gross revenue after the ramp-up period of one year. We can still make it grow. It's a young asset, and we're very happy with the way Marriott manages W Hotel. We still see a lot of opportunity to increase revenue. We have also been talking to Marriott and the team on site to lower costs. As you know, we are very active in the management of these enterprises, and this is the way we work with W as well. We are very disciplined in terms of costs and also the recycling of the two units of +Box, which were sold to the Storage Group.
Here you can see the new deliveries. We have a ComVem in Giovanni Gronchi, which we bought from Cury. There are 2,000 units in these two towers, 6,000 people living there who can use our stores. ComVem has a very good potential. We have been selling the stores very well in ComVem. Then we acquired other ComVem from Cyrela. Villa Nova Conceição, Ibirapuera, and Cotovia. Three units, as I have told you before. On the right-hand side, you see the GLA on the platforms. You can see that our energy and focus is on ComVem and 3A. In terms of malls, we are expanding Mogi. In the future, we are going to expand Suzano as well. This gives you an idea of our strategy, which is to focus on corporate and ComVem. Now I turn the floor over to Dalpiero, who's going to talk about company finances.
Good morning. Once again, I come here to talk to you about the results of HBR. In terms of net revenue, we had BRL 53.4 million, 37.9% increase relative to Q1 2025, which reflects a growth in nearly all the platforms. On 3A, an 83% increase. HBR Opportunities, 71%. Also ComVem grew 31%, and malls, which grew 8%. Also, we had efficiency gains, especially in ComVem. NOI is 54% greater than in Q1 2025. The graphs below give you all the breakout. The renewal of the rent, as mentioned by Nakano, in the Faria Lima building had a great impact. The rent is now marked to market. Just to complement what Nakano said, today in São Paulo, there is a balance between assets of corporate units which favors owners.
We see not only this in this asset on Faria Lima, but as Nakano said, there is a strong demand for corporate assets in other places in the city, especially Pinheiros, Paulista, Itaim, and Faria Lima. These are places where we have a relevant presence. In terms of IFRS, the increase in revenue was 42.1%. In terms of NOI, 25.9% was the increase. 3A has a very relevant presence, but the shopping malls as well account for a lot of it. Here we see the SG&A over net revenue ratio, and for the fifth consecutive quarter, there was a reduction in this indicator. This is the lowest in terms of our history. We have geared efforts to align processes, to use automation, to reduce headcount, to reorganize the structure, and also to do more with less.
Last year at ComVem, there was an increase of approximately 15,000, 16,000 GLA, but with no increase in SG&A. Our processes are now more streamlined, and we are more organized to keep costs under control. On the next slide, we see EBITDA, adjusted EBITDA, which reached nearly BRL 26 million in Q1 2026, an increase by nearly 36% vis-à-vis Q1 2025. The managerial margin is nearly 50%, which is supported by the strong growth in net revenue and the control of administrative expenses. On the graph here, you can see the increase in adjusted EBITDA by 35%. In terms of IFRS, this reaches nearly 42%. FFO is very important. It's a metric we have to improve. It is impacted by financial expenses. When we effect sales, we want to reduce financial expenses and improve our adjusted FFO.
Net income as well, there is a slight improvement, but it was impacted by financial expenses. This is why we focus on sales to decrease the financial expenses. On the next slide, we see our CapEx. It's under control, the future CapEx. When we closed last year, there were some displacements of CapEx, so there's no additional CapEx. What we have done is rebalance the CapEx between periods. As you know, we are facing difficulties in the civil construction industry. There's some delays in deliveries and delays in what we have to receive, and therefore, the execution flow suffers. In terms of debt, there was a reduction by 12.2% in net debt relative to Q4 2024, and a stability of the net debt relative to Q1 2025. We have been able to amortize BRL 88 million in debt coming from sales.
I have been talking a lot about reducing our debt, and at the end of the quarter, our debt was BRL 1.6 billion, cash and equivalent, BRL 213 million, and the net debt is BRL 1.4 billion. Our focus is to rebalance the capital structure to reduce debt. This is not going to be a straight line going down because we have CapEx to execute, and this CapEx is partially funded with debt.
When we execute sales, we want to ensure that our debt goes down. This is what you see here in Q1. When we look at the amortization of debt, we don't have any peaks of debt here. There is a dilution of our debt in the payment schedule. The indices of our debt also are diversified. Most of them are linked to civil construction indices. This debt is competitively priced. On the right-hand side, you have our debt by vertical. Now we are going to open for the Q&A session.
This Q&A session is for investors and analysts. To ask a question, please use the icon Q&A and write your question. Inform also your name and company. Questions that are sent in writing and are not answered during this video conference will be answered by our IR department. The first question comes from Matheus, from Santander.
The impact of the renewal of 3A in Faria Lima was an ad hoc thing, right? Or should we expect something similar for the next semester? Is the revenue level sustainable, or should we expect changes in the next few quarters?
Thank you, Matheus. The impact of the renewal of 3A Faria Lima has a bit of both. We had an agreement in January, but it was retroactive to October. So we had the impact of October, November, and December, which were paid in January. In January, you start to see a substantial increase in this rent quarter on quarter. In recurring terms, BRL 1.2 million, BRL 1.3 million per month more than we had before. So it is an increase which is relevant with no additional cost. In terms of SG&A over revenue, this is structurally sustainable.
When we adjusted the structures last year, we managed to optimize the structure. So this is sustainable from a staffing point of view. We also have automation, gains of scale, process improvement, and policies to restrict some more costs. So this is a structural reduction, which is also sustainable. There may be increases, but what I can say is that it is a structural change.
The next question comes from Lee from Bradesco BBI.
Good morning. I have two questions. Can you give us an update on the maturation of W? Is there an increase in the occupancy rate? Then, there was an adjustment in the rent of Faria Lima. How will this impact the sale price?
Herman, thank you very much for being here and for asking your question. In regards to W, yes, of course. It has had an increase in the occupancy rate. This is the beginning of the second year of operation. From Monday through Friday, the occupancy rate was nearly 100%. We had to send our guests somewhere else because we had some overbooking.
Just to give you a little bit more color, 60% or 70% of the revenue of the hotel comes from the occupancy of rooms, and then 34% comes from food and beverages. We are gearing efforts together with Marriott to increase the number of events so that companies will hold corporate events there, because this is what can move the needle in this type of revenue. We are looking to capture revenue from events. In terms of Faria Lima, it will have an impact, not only on the selling price, but also on the velocity of sale. The rent was below market value, and now it is aligned with market value and maybe a little bit higher than market value. This was a very good upgrade in the value of that rent, and we believe that we will receive proposals that reflect this improvement we had in the rent value.
Next question is from Mr. Damian Brown.
Congratulations for the quarter. One question about the ComVem platform. Will it be sold to an existing fund, or will it be a spinoff of the company? A fund where the asset would remain the property of the company, but on a separate fund.
Thank you, Damian, for the question. It is an opportunity for us to talk about what we are thinking to do with ComVem. In the beginning of this presentation, Nakano talked about the sale of this portfolio of assets. Just to make it clear, all the ComVem units are under our balance sheet.
The transaction means that we want to sell these assets to a company outside HBR. It would be a sale to a third-party fund, which would manage the fund. HBR would be part of this fund as a VLT consultant and would receive a fee to provide this service. For us, it is essential to continue to manage these assets. The occupancy rate is nearly 90% because we focus on managing those assets. We have been able to create a mix of convenience, proximity. We do not sell shoes. We have restaurants, we have shops that sell wine, we have grocery stores. What we have is a product, a recipe that is very difficult to replicate in the market. We would like to continue to manage the mix, but it would be a sale.
Once this happens, we will have a recycling of our capital, it would be a proof of concept for ComVem. We have many thousand sq m of ComVem that we are developing, and this creates a virtuous cycle: development, creation of value and sale to a fund. We will be able to receive revenue to reinvest in ComVem. This transaction is moving forward. As Nakano said, we have been talking to some funds, and this is in our pipeline for 2026 to execute this deal.
The next question comes from Mr. Magalhães.
Good morning. Congratulations for the results. What can we expect in relation to the reduction of debt, given the recycling of the portfolio? What amount of net debt should we expect at the end of 2026?
Thank you, Samuel. Thank you for participating in this conference call. I will give you no guidance. It's something that we are very mindful about. What I can say is to reiterate what Nakano said. We have a pipeline of sales for this year. Faria Lima, percentages of the shopping malls, and the ComVem transaction. These three blocks of assets, and maybe others may be added to that, will allow us to amortize the debt. But I won't give you a percentage.
We have the breakdown of our managerial data, where we have the level of indebtedness per asset, per vertical, but could be in the region of BRL 500 million, and the sale could be in the region of over BRL 1 billion. I'm not talking about an amortization straight down. The amortization will allow the debt to go down, and we will make new debt because of our CapEx commitment, and then the debt will go down again once we do another sale.
The important thing here is to say that the trajectory is towards reducing debt. This is what we have been focusing on. In the current scenario with high interest rates, this debt impacts our FFO, and this is our concern. But we are not going to just sell off the assets. We are looking to make good transactions with prices that make sense to us and to the investors.
The next question comes from Jose Luis.
The occupancy of ComVem reached 88%, with FSR of 7.1%. Pipeline of 12,000 sq m for delivery in 2026. Is there room to expand occupation and rent per square meter? Or are you thinking more in terms of diluting costs over the current base?
Thank you, Jose Luis, for your question. This allows us to give you some more color about ComVem. First of all, we have to talk about the quality of this additional 12,000 sq m. Five ComVems in upscale regions of São Paulo. We want to maintain and increase the quality of the tenants, increase the rent, maintain the occupancy rate. We are going to continue to be very careful with the tenant.
Commercial financial planning, then marketing, then a careful selection of the tenants, the brands, the activities, because they have to adhere to the profile of ComVem. The occupancy has to be high, the mix has to be good and sustainable in the long term. This is a very good prospect for when we add this new GLA. In terms of the cost, as Nakano and Dalpiero said, our team is ready to work with this GLA with the same team. The dilution of costs should take place as well.
The Q&A session is now ended. I now turn the floor over to Mr. Nakano, CEO, for his final remarks.
Once again, I would like to thank you all for your time. I would like to thank our controllers, our shareholders, our board, and our associates for this strong operational result. NOI over 54%, sales growing 37%, 88% occupancy. Faria Lima with the new value of the rent, which allows us to reprice the asset. The shopping malls with 97% occupancy and W. W has been growing as expected or even above what we budgeted for in terms of occupancy and events. What we have been doing is managing W together with Marriott to improve the NOI. In terms of recycling, which is extremely important, Dalpiero has already explained our thinking. We have maintained our strategy in terms of deliveries. We are selling assets once they reach maturity.
And once they reach maturity, we are going to sell these assets, but not at any cost. We are not going to sell off the assets. We want a healthy cash position, a healthy debt position as well. We have to find the best time and the best value to sell the assets. As has been said, our focus will be on the sale of the corporate tower in Faria Lima. Our share in the shopping malls, Mogi, Suzano, and maybe part of Olinda. The sale of ComVem. ComVem is a game changer. Over 50,000 in terms of GLA, BRL 15 million, and it is part of our strategy. We want to be asset light in the ComVem platform. Very few have this kind of knowledge.
We are able to rent out, to charge, to collect. We now can recycle that, and we can become real estate consultants within this fund we want to sell ComVem to. Very few in the market can manage this type of retail. Once again, thank you so much for attending this video conference and see you next quarter.