Good afternoon, ladies and gentlemen. Welcome to the Conference Call of HBR Realty to discuss the results concerning Q3 2023. This conference call is being recorded and the replay may be accessed at the company's website, ri.hbrrealty.com.br. The presentation is also available for download. We inform that all the participants are in the listen mode only during the presentation. Next, we will begin the Q&A session when further instructions will be supplied. Before proceeding, I'd like to reinforce that declarations made are based on beliefs and assumptions of the management of HBR Realty and based on current information. These declarations may involve risks and uncertainties because they refer to future events and 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 consider results that may be different.
We have with us Mr. Luiz Henrique Costa, CEO of HBR Realty, Mr. Daniel Viterbo, CFO and Investor Relations Director, and Mr. Mauricio Koakutsu, our Investor Relations Manager of the company.
Now we pass the floor to Mr. Luiz Henrique. Sir, you have the floor.
Good afternoon. Thank you for participating, for the interest. We'd like to begin talking about the highlights of Q3 2023, then we will talk about year to date, the first nine months. The performance of HBR Realty in the Q3 was BRL 35.8 million in net revenue, growing 7.6% in relation to the same period last year. NOI, this value was BRL 28.7 million with a growth of 2.5%, and when we look at EBITDA, we have 2.5% with BRL 18.7 million. We had some highlights. We had awards. We won awards. For example, our building in Pinheiros, in 3A, won an award by Americas Property Awards. It's a certification company from England. We won this between events in Central America and South America. The award was delivered in Canada, also.
We also won an award for HBR Malls in innovation. Our ComVem recognition for presence of totems, where we have multi-digital and the availability of Wi-Fi. We are celebrating the 23rd anniversary of Suzano Shopping, very mature, consolidated. In ComVem , now looking out at our business segments, beginning with ComVem, BRL 62.2 million in total sales to store owners, 49% growth and 13.7% increase in net revenue. This third Q3 compared with Q3 last year. In AA A, 100% occupation net revenue, a growth of 2.7%. In shoppings, in malls, we had BRL 13.2 million in NOI and 8% growth, 9.2% growth in total sales. In opportunities, we continued growing in hotels, BRL 6.8 million in gross revenue, 120% growth. Hilton Garden Inn is the star.
It grew 11% average RevPAR growth, average per room, and self-storage had a growth revenue of 6.8%. New developments, I would like to highlight our W Hotel, 87% complete, and João Moura Street, that I just mentioned, won an award, 56% construction concluded, will be delivered in the first semester of next year. Later on, we will talk about the operations. In terms of operational data, we closed the quarter with 29 assets in ComVem platform, 34,000 sq m in operation, and we have currently 35 assets in development being developed, close to 80,000 sq m in total. In occupation, we continued until Q3 2023, 84%, we closed the quarter this way. Sales, 49% growth, same-store sales, and year to date, in total. Sorry, year to date, 41.7% in relation to-- and 49% in total sales. Rent, 14.6%, same stores, concept rent.
In terms of ABL, an evolution of 21.9% in square meters, representing 6,000 extra square meters and new projects detailed below. We have a project in Curitiba, Olinda, with ComVem. Last year, we had the acquisition of Brascan Open Mall. Also, ComVem Faria Lima, an operation we have with ComVem, and 2,100 sq m of ABL in Olinda, additional footage. In terms of occupation in shopping malls, we closed Q3 with 92% occupation in shopping malls. The graph on the right, you see the details, the four equipment we have. Shopping mall Suzano , 98%, today with 99%. These are consolidated shopping malls and low vacancy. Olinda, a shopping mall that is becoming consolidated. It has been doing very well this year, 87%. Relevant operations were very optimistic, and we know we did a good job in Patteo Olinda Shopping mall.
Urupema was inaugurated on April 18th, and we maintain the occupation of 84%, and we will continue working to increase this occupation and a very recent shopping mall. Now talking about shopping malls in total sales per asset, we closed Q3 in comparison to Q3 last year, a growth of 9.2%. We have this vision per shopping mall for Mogi , Suzano , Urupema, Olinda, per shopping mall. The difference in the graph on the right is same store sales, same stores. Basically, the difference comes from Urupema, a growth from BRL 310 million to BRL 327 million, so sales in Urupema. In SSR, in shopping malls, we have a growth in total rent 6.8%. Here, the presence of including Urupema, 6.8% quarter-over-quarter. Shopping mall, we had a drop due to recovery of strong delinquency last year, and this year we haven't had this problem.
It's with the collections team and preventive work to avoid this situation this year. In terms of same stores, this indicator is stabilized. Total rent 6.3%, and shows to us that the new operations are healthy and are contributing for the growth of shopping malls. Now, operational data of 3A Platform. Portfolio, as I mentioned, we 100% occupation, growth of net revenue quarter after quarter, 3%, and 4% year to date. This picture that we see on the screen is the João Moura building, commercial building in the back and a ComVem in the front on the corner of the two streets. This building has 56% of construction complete, and we're estimating the delivery for first semester of 2024, probably beginning of Q2. On the right, we have some real estate in 3A Platform. What is in red is Faria Lima building, a building in operation.
In blue, the buildings that are under construction with various schedules for delivery. We have Pinheiros, as I mentioned, blue Itaim Bibi building, Ascendino Reis and Cotovia, three projects. We will give you more details later on. They are under construction in different. Some are almost complete, some are beginning. The three green balls are the building on Paulista that we will begin to build beginning of next year, a building on Paulista Avenue, one of the last plots of land, maybe the last one. The building on Pedroso Alvarenga , also in Itaim, a project we will begin next year. Doutor Chucri Zaidan, we're discussing whether we begin next year, maybe at the end of the first semester or second semester. In opportunities concerning Hotel W .
Today, it is the largest project, largest building, 87% complete, and we maintain our schedule that we agreed upon, both with Marriott and internally to inaugurate. We will have a soft opening of this hotel in the beginning of April for 60 days, and we want to have the opening at the end of the first semester. +Box had a growth NOI 14%. In Hilton, I can repeat, level of occupation above 80% of the rooms with a growth of 11%, average RevPAR, Q3 in relation to Q3 last year. Gross revenue, 120% , and BRL 19.2 million, 143% year to date. This with the performance of Hilton. Now, opening our portfolio in terms of ABL, this vision is interesting, the graph on the left per platform, and on the right by delivery. So focusing on the left, we see in this graph, ComVem.
What is in dark blue is in operation, gray is under development, 95,000 sq m. This is the logic. In the same way, in AAA, we get to the end of the projects, a little over 55,000 sq m, and we go to 70,000 sq m in shopping centers. In opportunities, we will go to 59,680. This will change when W is inaugurated and consolidated HBR, 281,000 sq m. Almost 300,000 sq m of rented area. When we look at the graph on the right, from the current 149,000 sq m, we, in 2023, we're almost delivering 15,400 m, foreseen for next year, 20,800 sq m, a good delivery. In 2025, an important delivery in 2026 with the AAAs that are being developed. We went 2027 to 230,000, 280,000 sq m.
I will go over, these are three slides. We have always brought this vision, the projects that are being delivered, and before saying that we are not waiting to sell, we begin sales even during the project phase. When we begin, we already begin. When we begin the design, we begin to sell. We can bring this in the next calls to give you a vision of occupation and number of sales per project. ComVem Limão, 21 stores here foreseen. This was delivered actually in the second semester. It's practically all rented. Quattro São Paulo in the second semester of 2023 on Tietê Freeway, 1,400 sq m of ComVem. Self-storage box, a little over 3,000 sq m, 4,657 sq m. ComVem Vila Madalena also delivered second semester of 2023, six stores, 2,800 sq m of ABL, 40 positions for parking.
Now, the next being delivered, four stores. We go to ComVem Elo Vila Anastácio, delivery second semester of 2023, totally rented, seven stores, 385 sq m. Next year we have ComVem Moema, 1,945 sq m, six stores. Most of it rented. Hotel W, 159 rooms. We talked a lot about this hotel. Two restaurants, one theater, 450 parking spaces. A beautiful hotel that will help us with our presence in São Paulo. ComVem 3A Pinheiros, in details, this project is a tower, 10,000, 14,000 sq m, 312 parking spaces. When we add ComVem, 3,200 m, we're talking about a project more than 17,000 sq m together with a convention center. Second semester of 2025. Here, we're talking about ComVem 3A Itaim. I mentioned it's being under construction. This is together with Cyrela. 16 floors. Cyrela will have the residential part, and we will have the corporate.
16 floors for corporate, 85 parking spaces, 10,000 sq m in total, and one store in the mall, with a ComVem of 1,423 sq m. This project will be ready for delivery 2025, second semester. ComVem Carandá in Ascendino Reis, together with Cyrela. Delivery first semester of 2026. Three corporate in 3A. A ComVem of 3,000 sq m, 12 stores, and almost 4,800 sq m in total. First semester of 2026, we have ComVem Cotovia, also together with Cyrela. Total ABL between corporate floors and all 7,700 sq m. The last slide, ComVem 3A on Paulista Avenue. I mentioned we will begin construction. We're trying to begin construction in February. If everything goes well, we will have a building with 9,300 sq m of ABL, 13 floors on Paulista Avenue, brand new, to deliver in the second semester of 2026.
I will pass the floor to Daniel. He will give you the financial data.
Well, good afternoon. We'd like to continue talking about the financial performance by platform and how the company behaved in this quarter and year to date. Looking at the graph on the left, net revenue, we had a growth of 7.6%, BRL 35.8 million in comparison with the same quarter last year. Year to date, we reached BRL 108 million. A growth similar, 7.7%. When we look at the platforms, we see expressive growth in ComVem, new deliveries, Brascan. All this has contributed to improve the performance and also the performance of existing ComVem. 3A with growth in revenue. Platform in malls consistent every quarter with growth. Opportunities also with growth. Although we sold some assets, when we compare with last year, Hilton compensates the sale of a building.
The last one, we have a small drop due to one store that is in the holding, and right now, we're renting to a new company. Managerial, we reached year to date, BRL 89 million, a growth of 10.3% when compared with nine months of last year. In the quarter, 2.5%, reaching BRL 28.6 million. These highlights are ComVem. Mall is performing very well, too, and this has helped this growth that we see in relation to last year. The other graph, as I mentioned previously, IFRS. We follow the IFRS standard, where some projects where we don't have control, they are booked by equivalency. Here we have our stake in all projects, including the ones we have no control over. Talking about EBITDA, we had an improvement in EBITDA. Growth of EBITDA above NOI growth year to date, 11.9%. This is also linked to the control of SG&A.
We have been growing in the lines, and SG&A is well controlled. Our margin, adjusted EBITDA margin, 54.3%. When we look at quarter-over-quarter growth of 2.5%. In FFO, where we had year to date BRL 17 million of loss, a loss of BRL 18 million due to the debts we have today. Lower cash position with lower financial revenue. This has been happening during the year. We know that next year, later on, we can talk about a strategic sale of assets. This will change the FFO profile of the company when it happens. The sale of assets. I talked about the sale of assets in the last quarter. We're mentioning again, we mentioned we sold HBR Capuava from opportunities, as I mentioned in the previous graph. This was done in February. We received a cash payment and also the rest in 24 installments.
This will end in December 2024. 3A Nações Unidas, we had this project on the plot of land of Toshiba. We made a barter, total VGV, BRL 84 million. Between a ComVem we will have there, which makes sense in the region because there will be residential towers, and a barter, a residential tower we will sell. What we have in progress, the two hotels, Fortaleza and Ibis Hotels. Hotel Fortaleza is being approved by the city hall. They made a demand. We are taking care, so soon we can announce that we have it approved and we will close the business. Ibis Hotel is in the final phase. We have proposals and the buyer, the owner, is in the final phase for us to announce the negotiation. Another that is in progress is the Hilton Hotel, a very mature asset that is performing very well.
It has an occupation above 80%, occupied during the week. On the weekends, people who come to São Paulo for leisure. It became mature very quickly and we have seen some players that are interested. We are continuing with this discussion. Now talking about debt, we continue. If we look at the previous quarter, we decrease the gross debt. We have been amortizing our debts that have a long duration. As we decrease the cash position, the net debt, BRL 994 million, increased 2%, and net debt over PPI of all the assets, these are external reports. We have 30.4%, a constant number. We are okay with this level.
We closed the quarter, BRL 175 million in cash, net debt 30.4%. We have this agenda to sell assets. We intend to sell assets to take care of future amortizations, future CapEx. In the graph on the right below, a breakdown of the debts and where they are concentrated. Most of them in the malls, our debts in 3A in ComVem. This is what we had to say.
Now I will pass the floor to Luiz for the final comments, and then we will begin the Q&A session. Thank you.
I would like to make my first comment. This level of debt we have today is being used to support the growth of the company. Number of projects we have in progress requires this debt. We have to balance this account as the projects become ready, and then this curve will change. Real estate cycle is long, everyone knows, but we are going towards 2023 with sustainable growth and preparing everything for 2024 and the next years that will consolidate our strategy.
We are very optimistic with the interest rates going down and also the improvement. This will help retail. We depend on retail, but also an improvement in our recycling agenda with the re-- High interest rates we had at the beginning of this year, it would be difficult to sell an asset that would make sense. We talked about this. The interest rates were very high at the beginning of the year, and as the interest rates begin to drop next year, the proposals we receive are better now. I believe that to conclude, I would like to say that we are delivering step by step what we said we would deliver. In a responsible way, in a very adverse market, we are growing, and this can be seen in the numbers that we are showing to you.
On my part, I believe these are my final comments, and we can begin the Q&A session.
Thank you. We would like to begin now the Q&A session for investors and analysts. If you wish to ask a question, please write your name in the Q&A field. Wait while we collect the questions. Our first question comes from Mr. Elvis Credendio, BTG Pactual . "Can you give us an update about the rental of João Moura building? We have seen many transactions in FIIs, and so WeWork is a good lessee. Have you talked to them to see the contract because they are now in Chapter 11?"
Thank you for the question, Elvis. I will answer the first one. The building in João Moura brought some surprises. This building, in the beginning of the construction at the beginning of the year, there was a lot of interest, many proposals. When the construction advanced, there was even more interest. We began to negotiate with three players until August this year, and now we are choosing one. I cannot tell you the name of the company that will rent, but we are very happy if we can close. We are at the end of the negotiation for price, and then we will have the contract. I believe we will have good news before the building is ready, and this is normal. We see this as normal, and I believe this will happen with other projects also.
The second question on WeWork. We have spoken about this issue with them, but also we have talked about business. WeWork has always been open, talking to us, even before the news this week. In Brazil, they were always very frank and transparent. The situation is in the U.S., and this, we believe that the operation in Brazil will not be contaminated by the problem in the U.S. because they are a franchise. The franchise in the U.S. is different from the franchise in Brazil. The building in Faria Lima, this is the best asset they have in Brazil. Our building on Faria Lima, it is a beautiful contract, very good contract. We are following this with attention, but I believe we do not have to be concerned with this. It does not worry us.
Our next question comes from Caio Cavalcanti Loureiro, individual. "Can you talk about the estimated CapEx for 2024? What explains the drop in margins during this quarter?"
Okay, Caio, Daniel speaking. We have estimated for next year, BRL 200 million in CapEx. We have the operational data. It is on our website. We have many projects estimated for next year, some of them which may be delayed, as I mentioned during my presentation. Now, talking about your second question, what explains the drop in margins? We have new tenants. We had tenants in the last quarter, occupation dropped. We have new tenants that are more profitable, improving profitability per square meter, especially in ComVem, and this explains a little, the drop in margin. You can see that the NOI margin drops a little, but the EBITDA margin has increased. So in the bottom line, you can see the revenue growth of the company.
Our next question comes from Antonio Castrucci, Santander. "Could you give us more color about the costs of vacancy, the costs of the two shopping malls, Patteo Urupema and Brascan Open Mall? What can we expect in terms of tenants in the next quarters?
Well, Daniel speaking. Let's talk about cost of vacancy. Urupema Shopping mall was delivered in April, inaugurated in April, so it's still in the maturity phase. Many stores being revamped. We have land tax. As time goes by, this will drop, and we hope to get to the end of the year with an occupation close to 90%. Today, it's 84%, 84% with contracts. Brascan Open Mall is not a shopping mall. It's a ComVem, but there is vacancy, so we have 70% occupation. This vacancy, we are talking to large players in restaurants who want to occupy the mall. It is consolidated. We're beginning the CapEx retrofit in the second semester. I believe this will appraise the project.
What can we expect in terms of rental and margin? In these two assets, we expect an improvement because the cost of vacancy will go down. Rental is improving. The price of the square meter is very good in Brascan, Patteo Urupema, also reasonable. If you look at the assets, the margins will improve in the next quarters.
Our next question comes from Vittorio Garcia. "Can you talk about the negotiations to sell the W Hotel?"
Luiz Henrique here, thank you for the question. In reality, this is not being done by us. I'd like to remind you, our cycle is to develop, operate, and sell. That's our cycle. So within this concept, what we said to Hilton makes sense. It's a hotel that is very mature, delivering good results. In the case of W, it is still under construction. It will be inaugurated in eight months' time. We believe we have a lot of work to do until then before thinking of negotiating the hotel. Now we're in the phase to hire people for the hotel, thinking of the startup and operation of the hotel. Then we want the hotel to become a success, and then obviously we can think of a sale later on.
Our next question, Gustavo Cambauva, BTG Pactual.
Good afternoon. I'd like to ask two questions. How do you see the current scenario for M&As? We've seen FIIs buying assets. Do you believe there is a possibility of making new sale this year? How is the demand from retailers for space in ComVem?
It's Daniel, I will answer the first question, and Luiz can supplement answering the second. For M&As, we see a better scenario than in the beginning of the year. In the beginning of the year, we had some contacts with prices that were low. Now we see real estate funds. They have come to us, they're interested in good assets, and they know that we have excellent projects. The scenario is positive. I believe that this year, we have the negotiations underway for the hotels and others we will see at the beginning of next year. This is the vision of these investments during this last quarter and quarter Q1, Q2 next year.
Gustavo, thank you for the question. The demand on the part of retailers for ComVem is increasing with a more optimistic market, but it increases as we deliver the spaces, when we operate the spaces, when we develop commercial spaces and looking for operations that will make sense in the location to place in that region which needs operations. We begin to be seen in the market. That's our objective as developers and operators of commercial spaces. If you have a business, if you are a retailer and you come to ComVem, I can guarantee to you flow and a well-operated business that is known by the neighbors as a very attractive place where you will be successful.
My answer, in a nutshell, is that the demand, yes, has increased. Demand is up. Our relationship with retailers improves every month. For the second consecutive year, we participated in the franchise fair. We had a booth this year. It was a success. Our ComVem booth had a lot of interest, retailers wanting to do business because we have our space in the market, and every time we deliver a new project, we have been successful in our business plans.
Our next question comes from Eduardo Chames from Lab Capital. "Can you give us an idea of the schedule of divestment due to the need for capital? We noticed many deliveries close and many launches. Can you give us an overview about the absorption of these projects? Is there appetite with interesting prices per square meter?"
Hi, Eduardo. Daniel speaking. Thank you for the question. I mentioned we have a schedule, yes, for divestments, for sale of assets. Conversations are stronger in the second semester. The drop in interest rates is helping us in the medium term. We see real estate funds looking for us, coming to talk to us. We have two assets, the hotels. This year and next year, we will have two relevant assets and which are in our agenda for sale. It can be a participation in a shopping mall. It can be a ComVem. It will depend a lot on the price and the cap. We always look at the price of bricks and what makes sense in a strategic way.
The absorption of these assets by the market, there is interest they have. We always look at cost, how much it cost, and sale price margin. This is what we do on a day-to-day basis to have the best possible transactions to give value to shareholders. I was saying, let me go back. I was saying that the absorption of these assets by the market is good. We have projects that are in excellent locations with interesting prices. We always look at margin, price of square meter, and the project as a whole.
Our next question comes from Vittorio Garcia. "Can you talk more about sale probability of ComVem in the interior of São Paulo?"
Hi, Vittorio. I just mentioned a little about this schedule for the sale of assets. ComVem in the interior of São Paulo, we are also looking to see if we can sell strategically each asset. It is on our radar, but once again, only at the right price and with a cap that we believe is what the asset is worth.
Our next question, Herman Lee. Good afternoon. Bradesco BBI. "I would like to understand the rental in ComVem and shopping malls."
Thank you for the question. I believe we can divide the question in two. In general, the market is difficult for store owners. Before renting, they think a lot because of their investment as store owners and the cost of occupation. What we have done in the projects that are very consolidated, especially Suzano and Mogi Shopping malls, and some ComVem that are consolidated with high occupancy rates, we are more selective and always having a partnership with the store owners that have been with us for a long time.
Any new projects that we have launched, especially Urupema Shopping in New ComVem, we have been more flexible in the negotiation, many times helping them with some months without rent in order to help the store owners during the initial phase. But in general, we are always in a partnership after this turbulent period that was this year, 2023. There is no recipe. It depends on each project, and our commercial team has this sensitivity to be close and to help the store owners.
Reminding you to ask questions, please dial your name, your company in the Q&A field. Please wait while we collect more questions. Our next question, Mr. Leonardo Paiva: With your shares, it seems an excellent way to buy back shares. I believe it is the right time to buy back shares.
Leonardo, thank you for the question. In fact, the shares are discounted when we look at the price in the IPO and the price today, and the value of the assets if we discount the debt, get to equity. Now, recycling of assets is in progress. We do not want to accelerate at any price. There is a lot of value in our assets, and in the second semester, we will continue with our agenda, selling assets, divestment. This is in progress. Next year, certainly, we will have sales.
Now, buying back shares. This can be a possibility, but we are very focused on developing, recycling assets, and I believe the share price will go up again, going to its real value, which should be much higher.
Since there are no more questions, the Q&A session is concluded. I would like to pass the floor to Mr. Luiz Henrique Costa for his final comments. Sir, you may proceed.
I believe that a lot was said. I would like to reinforce one of the points I mentioned in the Q&A session, which was we have another quarter to deliver. But with these first nine months, we saw that we are being able to deliver our commitments. A very challenging year until now, 2023, but now things beginning to improve in Q4. So this makes us optimistic in a moderate way and to a growth with a lot of responsibility, and now working on our agenda.
We know that operating with excellence our assets is important, and also recycling, selling assets for the proposals, that good proposals are coming now to us, and we are now having better proposals for the sale of assets. The scenario in the future is more positive. You can see the numbers during these difficult months. We are prepared, and we trust in the future. This is what I had to say. Thank you, and we wish you a good day.
The conference call of HBR Realty is concluded. We thank you for participating, and we wish you a good day.