Good afternoon, ladies and gentlemen. Welcome to the conference call of HBR Realty to discuss the earnings for Q4 2023. This conference call is being recorded, and the replay may be accessed at the site of the company, www.ri.hbrrealty.com.br. The presentation is available for download. We inform that all participants will be only in the listen mode only during the presentation. Next, we will begin the Q&A session when more instructions will be supplied. Before proceeding, I would like to reinforce that the declarations made here are based on the beliefs of the management of HBR Realty and current information available to the company. These declarations may involve risks and uncertainties, bearing in mind that they refer to future events and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should bear in mind that events related to the macroeconomic environment, the segment, and other factors may result in results that will differ from those comments made here. We have with us in this conference call Mr. Luiz Henrique Costa, CEO of HBR Realty, Mr. Daniel Viterbo, CFO and Investor Relations Director, Mr. Alexandre Nakano, and Mrs. Lais Seira, Manager of Investor Relations of the company. Now, I would like to pass the floor to Mr. Luiz Henrique, who will begin the presentation. Sir, you may proceed.
Well, good afternoon. Thank you for participating. Let us begin talking about the highlights of Q4 2023 in HBR. We closed the quarter with BRL 36.5 million, our net revenue. We had almost BRL 31 million in NOI and a profit of BRL 151 million net income due to the positive appraisal of some of our properties.
ComVem had a participation, BRL 66 million in sales, total sales, contributing with our platforms, a growth that is very positive, more than 40% in total sales, gross sales. HBR 3A, 100% occupancy with a growth in net revenue of 3%. HBR Malls, a growth of 10.6% in NOI and almost 12% growth in total sales, totaling BRL 15.8 million. In opportunities we had in hotels, BRL 4.2 million in gross revenue, a growth of 21.1% in relation to Q4 2022, +Box self-storage, we had a growth of 6.5% gross sales, and we have two of our main projects, more than 50% ready, W Hotel almost ready. W Hotel with 90% construction complete, 3A in Rua João Moura with 66% of the construction complete. Later on, we will give you more details. We will talk more about the delivery calendar later on.
By platform, talking about ComVem shows to us an occupancy rate of 84%. It continues with 84%, almost the same during the year with all the ABL that we added in the platform due to the projects that became ready and are becoming ready. To give you an idea of the 32 assets we have with 39,000 sq m in operation, we will add to this 31 new assets that are being developed and will be ready in 2024, some of them. We would add another 17,000 sq m to ComVem platform. As I said, revenue, total sales, a very favorable performance, and same-store sales growth of 17.4%. This is important. This shows maturity of the store owners with us and a maturity of the platform.
In terms of rents, we also see the total value with a growth of 10.4%, and in terms of same-store sales, almost 12%. We made a small adjustment in SSR because we had a drop in SSR due to one negotiation last year with our ComVem in Rio de Janeiro in Link Offices, and this has already been absorbed in our numbers for 2024. If we eliminate this negotiation, this would be 12%. ComVem shows a maturity in the projects that are already delivered. It shows the store owners' vision and consumers' vision, the consumers, a preference for ComVem. ComVem begins to have a lower cost of occupation, a good quality of operation, excellent assets, and for the client, it brings consumption that is happening all over the world and in Brazil, and the need for convenience and proximity to the homes.
We are still betting that we have a winning strategy of ComVem. Concerning ABL, looking quarter after quarter, from the end of 2022 until the end of 2023, we had a growth of 24% in ABL of ComVem platform, boosted at the end of last year with a boost with the last deliveries representing 5,800 sq m, three projects that became ready, ComVem Vila Madalena, ComVem Marginal Tietê Patteo São Paulo, and ComVem Bairro do Limão. Continuing, going into malls now, HBR Malls, the shopping malls. We closed 2023 with an occupancy of 93%, a highlight for Suzano and Mogi in terms of occupation. We will see the sales data. Two shopping malls that are consolidated, 99% occupation. Olinda, occupancy of 86%. We will talk more about this.
The work we have there is to recycle some store owners, some brands that were not having a good performance, and bring in better brands. We will see the evolution of the sales with a vision of same-store sales and all stores with an occupation a little lower than Mogi and Suzano. For us, it is as planned. Urupema, it was inaugurated in April last year, growing fast with an occupancy of 82%. Going into sales of shopping malls. When we look at total sales by asset, we see the platform growing almost 12% in sales, very strong. These are shopping malls showing an important degree of maturity. By shopping, Mogi, 6% growth, Suzano with incredible 13.7% increase in sales. Olinda, as I said, showing the strength with more than 8% growth in sales.
With the concept of same-store sales, we see sales in a consolidated way, upwards of 4%. Olinda is very mature. It sells more. In total sales, it grows 6%, but the performance of the store owners is becoming more difficult because it is already a shopping mall that sells a lot. It had important growth in the past. Suzano, in spite of the growth, same-store sales, a growth of 6.5%, and Olinda, as I said, already has an adequate mix, growing 6.6%, showing that we're being able to choose a good mix. In terms of rent, we had a growth following the strong growth of sales. We also had growth in rent from a 14.9%, and an effect in Mogi Shopping. We had a contract that was revised. This did not happen in 2023, so 2022 had this effect. That's why we have this drop. But Suzano, 5.3% growth.
They show that rent is in accordance with sales. With the same vision in the graph on the right, this 3%, when we saw the consolidated 3.3%, and Suzano once again, which has a good performance in sales, strong sales, and very strong in SSR in terms of rents. This shows the strength of the store owners in the shopping mall. Going on to 3A platform. Our portfolio, as I said, closed 2023 with total occupation. We had a growth of 2.8%, and during the year, 3.3%. We have the project of 3A Pinheiros. It is closed. These numbers are already a little different, but at the end of last year, it was 66% complete with delivery foreseen for the beginning of the second semester of this year.
In opportunities, we will talk a little bit about W, and later on, we will talk about the delivery, the opening of the hotel. This hotel closed 2023 with more than 90% execution. Self-storage reported an occupancy rate of 68%, a stability in occupation because the third quarter of 2023, we had exactly 68% occupancy, but gross revenue grew much more, 68% gross. Hilton Garden is very well, high occupancy in last quarter, 69%, reminding you that December is not strong for hotels, but it reached almost 70% with a growth of RevPAR of almost 4%. The gross revenue of accommodations more than BRL 4.2 million in the last quarter, a growth of 21.1% in comparison with Q4 2022 and BRL 21 million in 2023, representing a growth of 85% in relation to 2022.
Due to the expansion made in the Hilton Hotel, when we inaugurated and noticed that it would be a great success and we quickly expanded, we doubled the number of rooms. So we had the right strategy. We are now seeing the results. We are very happy with this operation. In our current portfolio, in terms of ABL, talking about ComVem new businesses. In opportunities, we have today by platform, as you can see, an evolution, a constant evolution of ABL in operation, ABL in development, and ABL future. On the graph on the left, we have 153,981 sq m of ABL in operation and in development, 126,499 sq m. This will take us to almost 300,000 sq m when these projects become ready. In the medium and long term, we see this in 2024 on the right. In 2024, we have a forecast to deliver almost 23,000 sq m.
This includes João Moura project, a ComVem that we will have inside the W Hotel, and a large project in Chácara Klabin to be delivered in April. Then we see year after year how this behaves. These values, they fluctuate based on the schedule of construction. But this is a great map of how HBR will perform in terms of ABL, how the portfolio will grow in the next few years. To close this first part, as we have done, we will talk a little about the next deliveries and what they add to us with some pictures also. We have now ComVem on Rua Joaquim Antunes in the Pinheiros suburb to be delivered in the next few weeks, bringing three stores with an ABL of almost 1,500 sq m.
In the first semester of 2024, we have ComVem, we call it Windows Moema, six stores, 130 also set of locations for cars. Capacity for 140 cars then. ComVem Vila Anastácio, seven stores, 385 sq m total ABL. In the second semester 2024, beginning of second semester, we should inaugurate W Hotel, 179 rooms on Helena Street and Funchal Street too in Vila Olímpia, 448 spaces for parking, 10,000 sq m of ABL, two restaurants and a theater. With ComVem and restaurants, we will have in the beginning of the second semester, our ComVem 3A, Rua João Moura. There we have 10-story building, more than 300 spaces for parking, one ComVem with 3,224 sq m, and together with the tower, it gives us 17,442 sq m of total ABL. This is almost ready. We will be very happy with this building and this convenience in the next few months.
In the second semester 2025, going to 2025, we have the delivery together with a partnership with Cyrela in ComVem 3A. I won't go in too much detail, but 10,000 sq m with stores and also the building. In 2026, we have the delivery of Cotovia 3A. Cotovia, in partnership with Cyrela, more than 7,000 sq m of ABL. We, in the first semester of 2026, ComVem 3A, also a partnership with Cyrela. Rua Ascendino Reis, almost 8,000 sq m. All of these are under construction. We will have ComVem on Paulista Avenue, 3A building. We should begin the construction this year. We will deliver in the second semester of 2026, 9,000 sq m of ABL. In a nutshell, to give an idea of the quarter, I would like to pass the floor to Daniel, and he will talk about the financial results.
Good afternoon. We will see now a summary of the financial data of the company. In Q4 2023, we had an NOI of BRL 30 million, a growth of 3% when I compare with the same last year. Year to date NOI, deducting costs, that we have BRL 118 million in comparison with BRL 111 last year, a growth of almost 7%. In expenses, we had a growth. Last year, we operated most of the time with one director less. We had to increase the operational team, but we have a full team for the next few years, so we will not increase headcount. Only inflation in the next few years and SG&A on net revenue is dropping every year. It's important to highlight that this year is a year for adjustments. With the increase in revenue and deliveries, there is a normal dilution of the SG&A of the company.
We closed the year with BRL 67 million in EBITDA, practically stable in relation to the previous year, and this due to an increase in SG&A and also many platforms with good performance. Malls 3A, and one of the assets left, we sold it in February 2023, HBR Capuava. Here to show you net revenue, net profit, BRL 131 million, and this comes from the variation, the appraisal, two cases that increase this value. They appraised W Hotel and Shopping Mogi because of the better performance. These two projects are responsible for this positive variance. Here, managerial net revenue, BRL 144 million in accumulated revenue in the year, a growth of 5.7% when compared with the previous year. ComVem Platform growing 20%, so aligned with the increase in sales, variable rent, new deliveries we have made that will have an even better impact on the top line, but we grew 20%.
3A grew 3.4%, BRL 21 million, and malls grew 5.6% to BRL 63 million. We had an improvement in margin in malls too. When we look at the quarter, we have a drop in ComVem due to the discount that we gave in an asset in Rio de Janeiro, Asset Link. Excluding this effect, we show that the SSR is going up in revenue too. Let's talk about NOI, managerial NOI, BRL 118 million, a growth of 7%. We had a growth in ComVem of 14.2%, BRL 13.6 million. When we look at the whole quarter, there is a drop. We have a growth in 3A, 6%, more efficiency in costs. This helps growth above inflation. In malls, we had a double-digit growth, an expressive growth, contributing for the NOI of the company, the malls with a very good performance.
Opportunities, we have a small drop, and this comes as a result of HBR Capuava that was sold, and a better performance in ibis Hotel, Hilton Hotel that helped this platform. In terms of holding, we have a drop due to vacancy. We have one store vacant. Financial data, EBITDA. We closed the quarter with BRL 20 million, lower than last year. As already explained, SG&A last year, and the discounts that we had to give. Year to date, BRL 76 million, practically stable as we had mentioned. All of this including expenses. Financially, we will become more healthy as we deliver the projects. This result shows the strength of the operations we have to continue this development cycle. We have many projects to continue building in the next few years. FFO net profit, BRL 35 million negative. In comparison with the previous year, we see a worsening, a drop.
I have used my cash to invest in CapEx, and we lost the financial revenue we had. We also took out loans for projects that are ready and financial expenses increased a lot. Most of this comes from a lower cash position and lower investments, interest rates. Here in the managerial view, the impact BRL 131 million. Here, the next slide is the same as the previous one with IFRS. I will talk about net profit. A growth in percentage terms, but due to consolidation, BRL 267 million at the end of 2023. CapEx and strategic asset sales. Here we talk about the company's agenda, recycling assets. We have worked on this. We have talked about proposals. In HBR Capuava, we already sold. We left also a project in the middle of the year. We will see the results in the next few years.
Fortaleza Hotel, we have a forecast to finish in Q1, finish the construction. We have a VGV of BRL 40 billion and a barter operation, an exchange operation. This will be used to amortize debt, and the rest will be part of the company's cash. ibis and Hilton Hotels, we have negotiations. We're looking into the best negotiations. Two assets that there is always someone wanting to talk to us. When we see something better, we will talk about these assets to you. Debt, managerial indebtedness. We had a CRI worth BRL 70 million in October. It's a loan CDI plus 3.5. This cash has already arrived. We have a gross debt of BRL 1 billion 42 million and BRL 1 billion 46, 5% more in net debt due to cash that was burned for investments. Investments. Looking at this relationship, net debt over PPI, we are stabilized at 30%.
We believe this is healthy, and later on, by recycling assets, selling assets, this will drop. In terms of managerial indebtedness, we closed the year with almost BRL 200 million in cash. A stable net debt over PPI. Here, just to remind you, our debts have a long duration, so this makes it easier to have free cash flow. It allows us to have this investment phase, long-term debts, 99% linked to projects 15, 20 years with an attractive price. We have always taken loans at competitive rates. Of course, with this schedule of amortization, we have the sale of assets, which is part of the agenda, and it is a source of funding that we will use in the next few years. On the right below, we see our debts.
Most of them are based on shopping malls, but they have an excellent performance part in ComVem 3A and also opportunities. I guess this is what we had to say, the financial part.
I will pass the floor to Luiz. He will make his final comments, and then we will begin the Q&A session.
I believe before opening the Q&A session, I would like to hear Mr. Nakano in relation to ComVem. Nakano is with us, but he is in São Paulo. He can make his comments before the final comments of the Q&A session.
Good afternoon. ComVem, in reality, we have been saying this to the market and in calls, ComVem is a long-term platform. You can compare this with a marathon because it is spread around. We have more than 70 ComVem spread, especially in São Paulo, and they are being delivered.
We have a pipeline in the next three years for deliveries, and this becomes mature. The message today, those who are trying this platform, I am talking about store owners. The store owners like and understand what this platform is. At the end of the day, we are closer to their end clients with a shopping mall operational quality. The clients, this we are selling for one-fifth of the price in the shopping malls. Talking about Q4. Q4 2023 had a record of good news. In terms of ABL, we rented 5,000 square meters. The same number for the three projects we delivered. These with contracts signed are twice what we did in 2022 and three times more than what we did in 2021 in terms of number of contracts. Occupation, we grew 86%. Of these 86%, we have 32 ComVem. Four have more than 90% occupation, the rest 100%.
Another important factor that we reached, something that we reached, we have been building this for some time. We understand that health will bring even more clients, and the large health players are expanding their operations. They are seeing ComVem, since we have many ComVem in excellent positions, they are seeing the ComVem as a growth opportunity for them. Not only health, but also restaurant services. They are seeing ComVem as an opportunity for growth for their companies. The billing of the stores in ComVem, looking at same store sales, they have been growing a lot. They had a robust growth, and the ComVem platform is being seen by the market, B2C and B2B. Now I would like to pass the floor to my colleagues.
Thank you, Nakano. I believe I will make some final comments.
In summary, the result that we had shows that we followed the strategy that we announced. The assets are all almost ready. They are being occupied. The mix is very favorable, very innovative. We have received the result of all of this, and with the pipeline we have, the operation will become better and better, and the results will become more robust. Economic scenario is beginning to improve. The economy is improving, so lower interest rates will allow us to recover in a more intense way the sale of assets. The company's management is very optimistic with 2024. I would like to thank you all for participating, and we are available for the Q&A session.
We would like to begin the Q&A session for investors and analysts. If you wish to ask a question, please use the Q&A field at the bottom of the screen. Please wait while we collect the questions. Our first question comes from Mr. Rafael Cardoso from Itaú BBA.
Good afternoon. Congratulations for the results and thank you for the conference. Two questions. I notice in the Fs a reclassification of the PPIs that are short term. This shows the sale of part of the portfolio, and in which platforms will you sell the assets? What is the CapEx that is necessary? Do you have details about those that refer to construction or new projects, and if you can delay them?
Rafael, thank you for the question. Daniel Viterbo answering. Yes, we had a reclassification and this shows, yes, sales, and these sales would be in 3A. Yes, we reclassified the assets thinking of selling these assets, the recycling of assets.
Concerning CapEx, we have the CapEx that is committed and the other that is discretionary. For this year, next year, we have some projects in progress. We cannot delay them. They have already begun. This year, we have few projects to be launched and other projects that we evaluate whether we begin construction this year or not. 3A, probably we will delay for next year, and ComVem too depends on the market since our projects are always linked to residential projects. I do not have a number to give you, but 20% or 30% of the CapEx is discretionary. So we evaluate if we will build during the year. The rest, we have construction in project. We have large assets almost ready, like 3A in João Moura and a W Hotel. And also Cyrela projects and others to be delivered in the next few years.
Thank you.
Our next question comes from Mr. Elvis Credendio, BTG Pactual.
Good afternoon. You mentioned in the release that you were going to sell mature projects. Talk about the amount of sales and how much leverage will you have. The FII market is booming. Hotels and convenient. Do you believe that the funds are focused still on other projects like offices? I understand that the base is affected by the deliveries. I would like to understand what is the level of occupation of mature projects.
Elvis, Daniel speaking. Thank you for the question. The sales volume we believe is the best will depend on the agenda this year. We believe we have good assets. There is interest, talking about FIIs. They have come to talk to us, funds that buy big projects. This includes hotels and convenience centers. So it is not only we have a lot of conversation with them.
I don't have a number to tell you about sales volume, but we believe that it can be one or two assets to decrease the leverage of the company, and that will allow us. We will probably have these sales. Occupancy of ComVem, Luiz will answer a little.
Elvis, thank you. You understood correctly. The new deliveries, they are here, but we have some projects with occupancy of almost 100%. These are mature projects, but bearing in mind that HBR is a young company. To talk about maturity of five, six, seven years, in some cases, would be even premature. Our cycle is long. Development, sale, it's a long cycle. But the answer is yes, we have some with more than 95% occupancy. These are the more mature projects.
Our next question comes from Mr. Mateus Belloni, Santander. What is the strategy for divestment, for sale?
Will we see recycling or sale of assets this year? How is the rent in 3A Pinheiros? Is it included in the sales?
Mateus, thank you. Daniel Viterbo speaking. I believe I answered a little of this in the previous questions. Our strategy is to sell some divestments, some sales. We look at the proposals and the value for shareholders. We don't want to burn assets. We will not burn assets. We want transactions with cap rates that according to the quality of the assets, and yes, in 2024, we will recycle, we will sell. We're working for this. It depends a lot on the macro scenario. The investment funds are booming. We have conversations in progress. Concerning João Moura. We have a lot of interest in the release and in the report. We talked about this. There is a pipeline. It's in the final phase soon.
It's for one client rental, and this is how we work. Yes, it's part of the portfolio that may be sold.
Our next question comes from Mr. Leonardo Tesi, Research. Could you explain the drop in total rents in Shopping Mogi revaluation and appraisal was based on W Hotel, BRL 48,000 per square meter in W Hotel. Is this the ceiling?
Leonardo, Daniel speaking. I will answer your second question, and Luiz will answer the first. W has increased in value. It is very close to the cost, so this year we will inaugurate. We hired a report from a large company in this sector, and the value went up and had the effect in net profit. If you look at valuation by square meter and cap, it makes good sense. We believe that it's even more when the hotel goes into operation, the price will be even higher.
We believe that the price that you mentioned, BRL 48,000 per square meter, it can be higher. We have residential projects selling almost at this value. We believe this will have a positive impact. The price of the square meter will go up in the next few years.
Leonardo, the first question, Shopping Mogi. In Q4 2022, we had a gain. We reviewed the rent prices, and we had a gain, and this had an effect in Q4. It was very good for the shopping mall, but it was only once. That's why the drop of 4%. But this is what happened. We had no effect in the shopping mall for 2023. Total rent to be lower than 2022.
Luiz, I'd like to supplement this answer about BRL 48,000 per square meter.
Today, the W residential project, it is being sold to investors, and at the top we have the hotel. Today, the residential units without decoration are being sold for BRL 42,000, BRL 45,000. You can have an idea of how much it will be worth when it is ready and mature.
I would like to remind you to ask questions. Please use the Q&A field at the bottom of your screen. Please wait while we collect the questions. Our next question comes from Mr. Caio Cavalcanti, Unirio. With sales booming on Faria Lima Avenue with more than BRL 45,000 per square meter, what challenges do you see to develop your projects in this region?
Daniel speaking. Caio, thank you for the question. The Faria Lima region has a very low vacancy rate, 2%, 3%. You cannot find full floors. You cannot find more spaces of 1,000. It has a lot of liquidity.
We have the large asset, HBR 3A Faria Lima, and the challenge we see, the price of rent is still low. We have a leasing spread to capture. We believe this will help appraise and increase the value. There is constant interest in Faria Lima, high demand and the highest prices. We believe we are well-positioned, and we will capture more value by reviewing rent contracts, always increasing the price.
Our next two questions come from Luiz Felipe, investor. "Congratulations for the improvement. I would like to know if the company has an idea of how much you will pay to shareholders. Can you give us more details about the Klabin project?"
Luiz, Daniel, thank you for the question. Our agenda in terms of sale of assets, recycling of assets, it is important for de-leveraging company's cash and to continue developments. We do not have a date to give you.
It can happen according to the value of the transaction. We may pay dividends if we sell large projects, and we will see if we can distribute part or whether we will use it in the investments we have in the future. We are constantly looking at this, we are reevaluating. But yes, we want to sell assets, and the idea is to begin to distributing dividends. Just supplementing what Daniel said. We are in a cycle of strong growth, and companies that grow are leveraged. What will happen in the market, the market will see as time goes by, and we will pay this through the value of the shares or dividends. Now, concerning Klabin, what I can tell you is that Klabin will be ready in April this year.
We will have a mall, almost 8,000 sq m with an interesting mix, restaurants, fitness centers, a very good mix, but I cannot give you an idea of profit. What I can say is that almost all the mall is already rented, and we will deliver between April and May 2024.
The Q&A session is concluded. We would like to pass the floor to the CEO, Mr. Luiz Henrique Costa, for his final comments.
Well, thank you once again for participating and the questions, and very good questions. I am representing HBR with our team, talking to you about the results and also the future with the projects in progress and the strategy that is being followed by HBR. What I can say is that we have a project, and this project is being executed year after year, month after month, week after week.
A company that is growing very strongly in many segments. But at the end of the day, there's always a store owner, a client, retail client. So special thanks to our team that helped us with last year's results. I'd like to thank the investors that are betting on us. You can be sure that we will have an excellent year in 2024. Thank you. The conference call of HBR Realty is concluded. We thank you for participating, and we wish you a good day.