Good morning, ladies and gentlemen. Welcome to HBR Realty's conference call to discuss results regarding the third quarter of 2025. This video conference is being recorded, and the replay can be accessed on the company's website, ri.hbrrealty.com.br. The presentation is also available for download. We would like to inform that the participants attending the conference call will be in listen-only mode during the presentation. We will then open the Q&A session, when further instructions will be provided. This video conference will be presented in Portuguese with simultaneous translation into English. To change the audio, you can click the globe icon in the bottom right corner of your Zoom screen, and then choose to enter English room. After that, you can 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 clarify that any forward-looking statements are based on the beliefs and assumptions of HBR Realty's management and current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts, and journalists must understand that events related to the macroeconomic environment, industry, and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. Present with us today at this video conference are Mr. Alexandre Nakano, CEO of HBR Realty, Mr. Alexandre Dalpiero de Freitas, CFO and IRO, and Mr. Alexandre Bicudo, COO.
I would now like to turn the call over to Mr. Alexandre Nakano, who will start the presentation. You may proceed, Alexandre.
Good morning, everyone. Thank you once again for attending our conference call, and also for the interest in the company and for taking the time to be with us. I'll be very brief to provide the presentation and the highlights. Instead of reading, I would like to give you macro messages. I think what draws our attention the most on the highlight page is the recycling process we've been going through. This is a topic that has been mentioned in all results earnings calls, and we always feel like explaining what would be the right moment to sell depending on the maturity of each asset. When we say that we reached nearly BRL 1 billion sales, we are talking about four assets.
The Hilton Garden Inn, which is almost completed, and the other ones which are underway. The tower in Faria Lima, the tower that we leased to Hospital Israelita Albert Einstein, and two others assets of +Box, which are in the due diligence process. We scheduled December to have all those assets completed, amounting to BRL 1 billion in sales. This is in alignment with what we've been saying so far. That is something required for the reinforcement of the cash and also to decrease the leverage levels. This has always been our mantra, and we knew from the beginning that this would materialize down the road, and this is something that's going to happen to other assets. A development company has to wait for the maturation period, and after a natural period of five years, and maybe some more or some less, we have to comprise this.
We have been moving along those lines. Net revenue grew more than 30%, and we can see that opportunities jumped to 94%, and this was driven by W Hotel. We expected this growth, but not at this magnitude. We exceeded what we expected. Foods and beverages are also contributing to the result. These are the ones that drive this asset. Specifically, this week was the best week of the year because of Formula 1. W has an occupancy of 99%, so we got it right in terms of location and asset. ComVem has always been delivering robust figures. Alexandre Bicudo will provide more details about it.
It shows that, as you have probably heard of some news in the media, when the vacancy problems are being reported, people say that they stand at 15% or 20% of occupancy rates and 80% or 85% of vacancy rate. It is the opposite for us. We have been reporting an average of 85% of occupancy rate, and we reached 86% this quarter alone. At CVC, we always have some new GLA, Klabin with 7,000 sq m, and also Osasco with nearly 2,000 sq m. In spite of the good level of occupancy, the number does not get close to 90%, but this is a matter of time because there is technology involved, intelligence and labor. It is just a matter of time for the assets to mature. NOI of ComVem reached 39% in growth. This shows how the platform is solid.
As to opportunities, I have already mentioned the sale of Hilton Garden Inn, and growth is above expectation. Now about to 3A. The buildings have 100% occupancy, and we also have to mention the sale of Pinheiros and Faria Lima. We are reviewing Faria Lima assets with our single tenant. I cannot provide more details because of disclosure limitations. Probably in the next call, we will disclose the results that we are going to get. As the malls, as I mentioned, even with a matured shopping mall such as Mogi and Suzano, which almost reach 100% of occupancy rate, the platform continues delivering robust numbers, two-digit numbers, such as the gross revenue of Mogi Shopping. That shows that the strength of the mix is working well. Of course, Bicudo is always looking for excellence when he forms the mixes, and he will provide more color on this topic. I will give the floor to him.
Good morning, Nakano. Thank you very much. Good morning, everyone. I will start talking about ComVem. We were very happy with the result provided by this platform. It is a segment of our operations that we believe to be very successful. We understand that the assets are getting mature and the deliveries that we have delivered this year, especially Klabin and Osasco assets, were very successful. As to the indicators sales, total values grew 33% in the quarter when compared to the same period of last year in the same stores, 3%. In relation to rents, we grew 33%, same store sales, 9.6%. We had the default rate, which was very controlled. This is done by the management of the business. In relation to the occupancy rate, as Nakano mentioned, our rate ranges about 85% and 86%.
This quarter, we increased a bit, reaching 86.3%. Still considering the opening of ComVems, which pose some challenges for us to keep those occupancy rates at those levels. After the assets are matured, we will continue looking for the possibility of reaching 90%. In terms of NOI, we have an expansion of 39.5%, reaching BRL 5.5 million, and we reached the margin of 86%, which is quite relevant, posting a very important growth in relation to the previous period. In terms of the deliveries for the year, we have Osasco with 1,700 sq m. We have delivered this recently, and we stand at 84% of occupancy rate. We believe that this delivery has been very successful. We opened Klabin in January this year with 95% of occupancy rate. It is a reference in the market, a real benchmarking.
We got a prize of mix quality of project, so we are very happy with the project and the market is recognizing this. In relation to the stores we opened, a very important highlight is the number of stores that we opened this year. We opened 56 stores up to September 2025 with nearly 15,000 sq m of GLA. We are very happy with this result. It is important to say that whenever we open a store, we want to qualify the brand, the mix, the project. We want to adopt operations which are aligned to the consumer and to the market. This is what we have been doing in order to reach the results expected. Some quick highlights of stores. We have Jojo of Chef Jacquin in ComVem of W Hotel. That happened in September, and that was very interesting. Academia Gaviões gym at Klabin in August as well.
They already have 1,500 users in the gym, and Clinivoy Clinic with ComVem Ema, with more than 1,000 sq m, showing the success of this business. Moving on to discuss the malls. We posted a growth which was more stable, so as to say, total sales grew by 3.7% with the main positive highlights, Patteo Olinda Shopping with 6.6% and Suzano Shopping with 4.7%, driven by the sales of the major anchor tenants. That helped a lot. In the concept of same-store sales, we grew by 2%, also driven by Patteo Olinda Shopping, which grew 4.7%. As to rents, we grew 5.9% in general terms with Patteo Olinda Shopping driving this result with the 7.9% as a result of rents, and also Suzano Shopping, which grew 5.7%.
In the concept of same-store sales, we are growing 6.4%, and in terms of percentage, Urupema contributed with 23%, and there is also a reduction of discounts in the process of asset maturation. Moving on, still talking about malls. We have managerial NOI of BRL 14.7 million, 5.5% growth in comparison to last year. Mogi Shopping with a 12.9% growth. The consolidated margin is very pleasant, showing 30% growth in relation to the previous year of last year. Talking about occupancy of the shopping malls, Mogi Shopping continues to stand out, still reaching 99.4%, always keeping to this level, and the challenge of this project is to qualify and optimize the use of all the areas. Also use the rents. This is a process we have been executing with consistency. As to Suzano Shopping, the occupancy is very good, standing at 97.1%.
The news we would like to share with you is after the closing of the quarter, we opened a Riachuelo store with 1,763 sq m, with a store which is totally aligned with the project, and we are qualifying the initiative. We also have C&A, which was refurbished, and Centauro, which is about to complete its remodeling. It is a process of renovating the stores and the mall at large. Patteo Olinda Shopping recorded a jump in the occupancy rate, and we had Vonný Cosméticos store with important agreement, and its operations will start in the beginning of next year. The process is a very interesting maturation process, and the prospects are also very interesting. In relation to ComVem is still in the process of maturation. The occupancy rate stands at 73%. We are revising the mix. We are prospecting activities and brands.
We are likely to have a very important anchor on the fourth floor, which is about to be defined in the next weeks. We believe that with the prospect of maturation, we believe that ComVem is going to increase quite a bit as of the first quarter of next year. This is what I had to say about the malls, and I will take your questions during the Q&A session. Now I will talk about the HBR 3A platform. I think I am going to focus on the future, mostly of the deliveries we are about to post, beginning with Itaim Bibi 2. The façade has already been painted. It is almost ready. It is an acquisition together with Cyrela. In March or April, we are likely to have this asset delivered.
The lease is going to be done through a consulting firm for the market, and ComVem Ema will be implemented in the beginning of next half of the year. ComVem Ema will be implemented in the second half. Paulista has made good advance. Chipre and Faria Lima will have their construction works starting after the rainy season, and we are to deliver the assets in the end of 2028. We have Pinheiros and Faria Lima that have made 80% in advance of the construction works. We are working on the final documents so that all this will be finished still in 2025. Now moving on to opportunities. Our highlight is W Hotel. W Hotel is considered within the platform. We see that it contributes with its revenue because it has a great capacity to generate revenue.
Of course, just like any hotel or any commercial asset in general, there is an adjustment between revenues and expenses. We have been working with Marriott to make it as balanced as possible at the shortest time possible. The revenues are very significant, but the expenses are also very high because this is the characteristic of a luxury hotel with the W Hotel banner. We are working with Marriott so that we can increase the occupancy rate, and we are also making fine control of the expenses. +Box had its second unit delivered in Tamboré, and there are other ones which are adjacent to this unit about also to be completed. We completed the sale of Hilton Garden Inn, and this is a business that has already been completed. Now let us talk about the portfolio of assets. It is very clear what you can see on screen.
Everything that has already been delivered, such as Osasco unit, Brigadeiro is about to be delivered as well. The other ones, such as Cotovia, Ibirapuera, Itaim Bibi 2, together with Cyrela, will be delivered along the year of 2026. Also the commercial floors. As I said, we've already hired a consulting firm to provide support in the leasing process. To the right, you see the GLA. The most important part is the light gray part, showing that our current focus and our future focus is to focus on the corporate towers and also on ComVem. Down below, you have the delivery schedule up to 2030. I'll turn the floor to Alexandre Dalpiero de Freitas, who will talk about the financial performance.
Hello, everyone. Good morning. Thank you, Nakano. Thank you, Bicudo. We are going to move on talking about our financial performance. I'm going to talk about the net revenues, where we reached BRL 15 million in this quarter when compared to the same quarter of the previous year. It's an increase of 31.4%. This increase was driven by the success we had in the Opportunities platform. Not only that, ComVem has also contributed a lot, as well as the malls. The only part that didn't contribute that much is the 3A, whose revenues are more stable. We can see the net revenue, and most of the revenues come from debut through the Opportunities, but also from malls. When we see net revenue according to the IFRS, we see this number increasing as well. When we look at the NOI, we see that malls play a very important role.
When we compare against the previous quarter, we see that there was an increase of nearly 4%, reaching nearly BRL 32 million, driven especially by the segment of malls. When we look at NOI IFRS, we see a more even distribution with the malls, with a very good contribution in our division. Now moving on, and this is a slide that we have been showing and we have been monitoring very closely. We see that for the second quarter in a row, we see the ratio of SG&A and net revenue ratio, and we see that there was an increase in net revenue, but we see the importance of costs. When we look at SG&A, we see that we reached 11.2 when compared to the same quarter last year. This says we have to deduct inflation. Of course, we're looking at cost reduction, but not only that.
We're doing more with less, and we are executing the platform at an excellent level, as we have seen in the operating levels with the same team. When we look at the first nine months, we can see that there was a reduction of nearly 8%. This is a structural reduction in the SG&A. Now moving on to the next slide. We can see the adjusted EBITDA. When we look at the adjusted EBITDA, we see that we reached BRL 22.1 million in the third quarter, an advance of 6.3. It's a composition with revenue and stability in the SG&A costs. When we compare with the third quarter of 2024, we see that we increased by 6.6 when we look at the IFRS, we have nearly 8.8%, or there was a reduction in the FFO from 15.6- 26.2.
When we look at the net income, we also see a reduction from -17 to -30. Both of those indicators have a reduction that was driven by larger financial expense, as was mentioned in the beginning of the presentation. The focus on sales, focus on reducing expenses, and also the leverage level that will also reduce those numbers. Moving on to the next slide, we can have a breakdown of the CapEx. CapEx shows a curve up to 2031. This is what we have planned. In 2026 and 2027, we have the most maturities. In terms of debt, we see that our profile is very elongated and the rates are very competitive. When we look at our profile, we can see that the debt is below CDI rate and the profile is really elongated.
We have an effect in the reduction of the leverage of about 312 million BRL. As soon as the sales that have already been announced are 100% completed. This is what I had to share with you. We can now open the Q&A session.
We are now going to start the Q&A session for investors and analysts. To ask a question, you can use the Q&A icon in the lower part of the screen and type in your question, informing your name and company. The questions in writing that are not answered during this video conference of results will be later answered by the IR team. Our first question comes from Herman Lee with Bradesco BBI, and this is the question. Sales dynamics at the malls whose SSR de-accelerated. What are the trends you saw? Lower flow, lower traffic, some segments selling less?
I'm going to answer the beginning of this question to provide an answer. First of all, thank you very much for attending the call. Thank you very much for your interest, and thank you for the question. When we look at the graph of same-store sales, we can see that there is this trend that you mentioned. But when we look at same-store rent, you can see that we can see a higher maturation in the rents. That means that both Suzano Shopping and the Mogi Shopping have 97% of occupancy. So the growth of sales is not so expressive, but the maturity of the rent, meaning the percentage, has a higher ticket. So we noticed that even if we have a flow, follow of people and a flow of sales, which is not so much bigger, we can have a better rent.
That means that the average ticket that is being developed in the asset is more robust. Would you like to add anything?
Yes. Sales always pose a challenge to the malls in terms of sustainability and attractiveness. In relation to this quarter, for example, cinema was not successful because of the programming. There was a drop in the invoices of sales, and there's also something which is structural. There is the competition of digital commerce that compete with our stores and remove some revenues from the physical stores. We work hard to increase sales in different fronts. So we try to make new stores bring more attractiveness. We are also working with events, promotions, internal, external events. So we are quite confident that in the next quarters, sales will accompany the growth of the rents.
Our next question comes from Matheus Meloni with Santander. Could you provide an update of the updated sales and what would be the use of proceeds? What are the negotiations for more sales? Could you provide more details of non-recurring expenses that were impacted by adjustments related to the projects?
Thank you, Matheus. Thank you for the question. When we look at sales, we work on the diligence, we work on the documents, and we plan to complete the sale still in 2025. Having said that, we want to use the proceeds to lower our leverage level and reinforce our cash so that we can make adjustment to the structure of the company. In terms of additional sales, we have communicated this, but we have not been providing any guidance or disclosing something that we do not have any firm commitment. We always talk about a ComVem platform. ComVem has been gaining momentum.
If we look at the figures of the company quarter-on-quarter, all the figures are better continuously. This improvement has been attracting the market attention, especially when we try to look at assets with urban revenue. I would say that there is a new group of assets that will be delivered in 2026 and 2027, as Nakano mentioned in the delivery schedule that we have for the years to come. These are potential assets that can be negotiated. This is a new set of assets that will be close to the delivery moments, and there is a major possibility to use all this to monetize together with the urban sales for 2026. Another part of your question was about the line of other expenses and non-recurring expenses.
We have been very proactive in those lines, and in previous quarters, they were related to disbursements for some minor projects. There were some adjustments, not necessarily cash adjustments. But this quarter, specifically, the adjustment is associated to immobilized assets. Equipment that was acquired, instead of losing the equipment, we sold the equipment at a lower value because it's not so much of worth of. It doesn't have such a high cost in the market. But it was not a cash effect. We recognize the accounting effect as a non-recurring expense.
Our next question comes from Mr. Gustavo Fabris with BTG Pactual, and this is the question. Good morning, everyone. Thank you very much for the possibility of asking question. If you could, I would like to tell us what is the capacity rate in shopping malls and ComVems since the SSR was above the segment. Another question, how do you see the growth of rent for both businesses down the road?
I'll start answering the first part of your question, then I'll turn the floor to Bicudo. Gustavo, thank you very much for the question. I think I've already answered part of your question in relation to the SSR. Our rents, at times, we do a sort of a scalening. It starts with a lower value, and then in the second or third year, it reaches the maturity, and the results are better. But there's also the thing about the higher average ticket. The rent is according to the sales, so these are the two effects that play a part in the increase of the SSR reaching a level which is higher than the same-store sales. ComVem occupancy rate, again, our major focus here is Urupema and Olinda.
They are the ones that use most of our energy. As for Mogi and Suzano, we are concerned to expand the mall. We are almost exporting tenants because there is no way we can absorb all those interested in operating in our malls. So we are likely to expand the Mogi Shopping in the second half of 2026, and we are likely to expand Suzano Shopping Mall in the end of 2026 or in the beginning of 2027. So we will be trying to reach 90%. Bicudo, would you like to add anything?
Yes, I would like to add something. In relation to SSR, we have less discount. And since our management is tighter as to discount, so SSR is impacted in a very positive manner. So in terms of rent growth, it is different when we talk about malls and ComVem.
At the shopping malls, we are trying to qualify the tenants that would offer better activities and better sales, because we focus on the percentage. In addition to that, we have a group of ComVem stores which are young. So there is a maturation process which is underway. So the prospect of increasing sales and increased rents is very interesting, considering that these are processes which are underway in terms of maturation.
Our next question comes from Matheus Araujo with Argus. "Good morning. I would like to hear from you about Itaim 2. What are the expectations of the company in relation to the assets? Is there any area which is already leased?"
Matheus, thank you very much for the question. Thank you very much for attending the call.
Just like the other assets, the other corporate businesses, the idea is to have a mature rent and do the recycling. So this is according to what we have been doing and what we have been saying. So the idea is to get the benefit of the rent as soon as possible. We are still talking to some users, and that is why we have a consulting firm providing support in the renting process of the tower. And that would be not a problem to us because since we are six months away from the delivery, we cannot do then something much before because we have to wait. We understand the right moment for us to expose it to the market is within this period of six months before the delivery.
Our next question comes from Andre Resende, and this is the question. "SG&A over revenue at historical low, 20.9%. The current SG&A to revenue level is sustainable as a new structural benchmark. Is there additional room for efficiency gains?"
Thank you, Andre. Thank you for the question. We work to that purpose. Yes. As I have been saying, as well as Nakano and Bicudo also agrees, our focus here is operating efficiency and trying to improve the efficiency of our costs. So delusion is part of it, do more with less, work with the teams. Bicudo mentioned the number of deliveries that we had along 2025. And there was a reduction in the expense level when compared to the previous quarters. So this is a result of the work that we have been doing. It is not something that you can do overnight. It is a medium and long-term activity. So we have been restructuring the processes, the areas.
We have been implementing new technologies and bringing the results into the SG&A. To get this ideal ratio, we also make a lot of effort looking at the revenue. Without providing any guidance for the future, I always like to say that this is a commitment that we have assumed not to maintain our stability in costs and to look for higher efficiency and delivering optimum results.
Thank you. The Q&A session has come to an end. I would like to turn the floor over to the CEO of the company, Mr. Alexandre Nakano, for his final remarks.
I would like to say, I would like to bring five highlights to summarize what the quarter was like. The major one was the sales we reached. I do not like to use the English terms, but I will make an exception because we are practicing the walk the talk.
We have been mentioning those sales in the past calls, and we have always been very disciplined when it comes to how to execute. We knew we needed to do the recycling without burning the assets at low prices just to say that we did the recycling. We managed to have good proposals, good buyers, and we are sure of their capacity to fund, because we do not only analyze the proposal, but we have to know how the funding is supporting this proposal. We managed to make good negotiations with good capacity to fund the amounts. We would also like to focus on our SG&A discipline. We have been focusing on this quite a bit, and evermore, we want to do more with less. We are devising something to bring additional accessory revenues without increasing the cost. I always like to mention ComVem.
ComVem platform, even though it is spread across the country, it shows that it is very strong when you look at as a unit. When you see that there was a growth of 30%. It shows that ComVem has its own strength and its work. It has been successful, and we have been delivering the thesis. The occupancy rate standing at 86%, it is different from what we see in the market. This is something that makes us very proud, especially led by Bicudo. In Mogi Shopping, we are about to start the expansion works. So we are in the final phases with the negotiation with the contractor. As to commercialization, Bicudo has many fronts. Malls are very successful. In W Hotel, this is the first year that it has been in operation because it was inaugurated in December last year.
So it shows the success of the asset and the Marriott as a partner is very happy with the asset. So once again, I would like to thank everyone. I would like to everyone to having attended this conference. I would like to thank the shareholders, the controllers, to our board, and all our employees who help us provide those numbers.
The conference call of HBR Realty has come to an end. We would like to thank everybody's participation and have a good day.