Good morning, and thank you for standing by. Welcome to Iguatemi S.A.'s second quarter 2023 results conference call. With us today, we have Ms. Cristina Betts, the company's CEO, and Mr. Guido Oliveira, CFO and Investor Relations Officer. We would like to inform you that this event is being recorded, all participants will be in listen-only mode during the company presentation. After the company remarks are completed, there will be a Q&A session, at which time further instructions will be provided. Should any participant require assistance during the call, please press star 0 to reach the operator. This event is also being broadcast live via webcast and may be accessed through Iguatemi's Investor Relations website at www.iguatemi.com.br/ri, where the slide deck presentation is also available for download. Participants may view the slides at their own convenience.
Before proceeding, we would like to mention that forward-looking statements made during the call are based on the belief and assumption of Iguatemi management and on information currently available to the company. They involve risks, uncertainties and assumptions as they relate to future events, and therefore depend on circumstances that may or may not occur. Investors and analysts should understand that general economic conditions, industry conditions, and other operating factors could also impact the future results of Iguatemi and lead to results that differ materially from those expressed in the forward-looking statements. We will now give the floor to Ms. Cristina Betts, who will begin the presentation. Ms. Betts, you may proceed. Well, a good morning to all of you. It is a pleasure to receive you once again at our conference call. We're presenting the results for the second quarter, 2023.
First of all, we continue to have an excellent performance, and the figures are a testimony to this. The first figures that I would like to share with you is our sales record this quarter. We obtained excellent results in Valentine's Day and Mother's Day, coming to BRL 4.6 billion in the second quarter 2023, up by 8% versus the second quarter 2022. I would also like to highlight that eight of our 16 shopping malls have accelerated growth 10% above the results of 2022. After speaking of sales, of course, the sequence is to speak about lease. That has also grown above and beyond inflation. Now, this shows the qualification of our mix and Iguatemi's trade strength. And this is something that we have been conversing during the calls.
The after the situation of the pandemic, reaching 0.7% below what was recorded in the 1st quarter, 2023. We have also been able to renew all of our contracts very positively. In the 2nd quarter, we obtained a spread of 5.1%. Of course, with a compression of lease in stores, and we have reached 10.5% and 9.0%, respectively, in our stores. Our occupancy continues to be stable at 11.3, very much aligned with what we had in 2022, 0.3 below our historical levels. We had a strong readjustment of lease, if you follow up quarter-on-quarter, including this quarter. Because of the sales increase, we have been able to maintain a stable occupancy, and this, thanks to our efforts in terms of maintenance, of condominium costs and others.
Net default, once again, has been very good, 0.1% in the second quarter, favored by the recovery of the bad debts we had in the first quarter, and also payment of all necessary bills during the quarter, which means that we have returned to the collection levels that we had, and they are even better before the pandemic in 2019. We're receiving our bills on the first day, as we used to do way back in 2019. Now, to speak about the occupancy rate, it continues to be stable at 92.4%, aligned with the other quarters and with a positive trend for the second half of this year.
We have been speaking about this, we do continue with our guidance for this year. More specifically, in the second quarter 2023, we had a record of contract signed, 151 contracts, 70 alone in June. This shows the recovery of our commercial part, and of course, this will have its repercussions. To speak about our operations, especially in the digital area, Iguatemi One, we had the second edition of Iguatemi Collections, which has surprised us evermore. In this edition of Collections, we had a knife set and a cutlery set that was extremely successful, very desirable, and we had 40,000 new participants, and an increase of 30% in the invoice sent, vis-à-vis the first edition. This is the recognition of this program, and the third edition will begin now at the end of August.
Iguatemi 365, we continue to maintain our focus. As we have mentioned formerly, we're looking at the profitability of the business. We had improvements in our margin and, of course, thinking about the operation breakeven. In the second quarter, we worked with qualification and selection of brands, maintaining the brands that offer us higher profitability and doing away with brands where we have a worse profitability. As we mentioned, we had migration to the X, and we're looking at all of our SG&A items to enhance this further. When it comes to events, I think we have spoken at length about this, especially after the pandemic. Our focus now is events, and we have a very ascertained and assertive strategy that creates the symbiosis with the shopping mall operations. This is very clear. We had several events in the second quarter.
The edition of Cine Vista at JK Shopping Mall, an interactive event to celebrate the 60th birthday of Monica from Mauricio de Sousa, an unheard of experience after 30 years, a celebration of Jurassic Park. Who doesn't recall the first Jurassic Park? For the seventh consecutive year, we had the World Pet Day, Blue Day, I'm sorry, working with the Association on Autism. We had an exhibition of films, Barbie and Oppenheimer, and this is an incredible project that will have a reflection in the third quarter, the Barbie Dreamhouse Experience and other shopping malls will also participate in this. This is at a partnership with Mattel. We have sold more than 60,000 tickets only in the JK Shopping Mall. To speak about our commercial structures and our surroundings, we have two corporate enterprises that deserve to be underscored.
We had the inauguration of Sky Galleria, close to the shopping mall in Campinas. It is 100% leased and 60% occupied, generating a significant flow in the shopping mall. We also have Iguatemi in Porto Alegre, one of the more desirable areas in the city. As you will recall, and as we show you in our norm in Porto Alegre, we do have subsequent chapters. In terms of our real estate, we have also shown you a very interesting place in Ribeirão. Besides the shopping mall, we have two commercial towers that are highly sought after by our partners, and the idea is to use this competitive edge in Ribeirão Preto.
In the area of influence, we had an increase of almost 130% in the average lease compared to what we had in 2007, with a real growth of 64%. This shows you the strength, the magnetism that a region like this has when we bring all of this under our control. I will dwell a bit on Casa Figueira. We do have very nice pictures in our release, and we are concluding in August Prototype Street. It is precisely a prototype of the aesthetics and the finishing for the structure of the neighborhood, and we will begin the construction of Casa Figueira. It will be a meeting point for the new neighborhood that we're developing in Campinas. To speak about SG&A, we had some important things happening. Perhaps the most important part is our, sustainability report. On Monday-...
We, we're very satisfied to publish it. It represents our sound commitment towards transparency, information about our actions, what we have implemented, which are our pillars, also a retrospective view of what has happened in the last years and decades at Iguatemi. We speak about the consumption of energy, water, the responsible management of residues, fostering actions to enhance our work with our associates and the communities. We want to use this report so that it will become a channel of communication with the market, and use it as a parameter, not only to enhance what we can do ever better, but also so that it can serve as inspiration for our partners and stakeholders throughout time. Well, we're quite confident in the coming periods. We have a great deal of work when it comes to occupation. We're going to speak about our efforts devoted to SG&A.
We do want to become ever more profitable as a company, and we're going to show you the effects of the leveraging of the company. Our curatorship of events, of mix, our projects in the coming quarters and years, we have a very promising situation with good results. I would now like to turn to the presentation and refer to the highlights of the second quarter. I'm going to go through these quite quickly so that we will have time at the end. On page 3, I already referred to total sales of BRL 4.6 million, up by 8%, and the estimated sales for July that once again, are very strong compared to July 2022, with a growth of 11.3%. In the last days of July, of course, we have not accounted for this.
We spoke about the boom we had in the cinemas and in our malls. Same-store sales grew by 6.5%, same-area sales, 8% vis-à-vis the second quarter 2022. Same-store rents with a growth of 10.5%, same area rents with 9% increase. The vehicle flow that is very important and refers to the sales in July, 7.4% above the same period in 2022. We have spoken a great deal about vehicle flow because of the alternative versions, Uber, bicycles, skates, everything that can bring people to the shopping mall is included in this vehicle flow. In July, we had a significant increase. Gross revenue reaching BRL 353 million, up by 15.4% vis-à-vis the second quarter 2022.
Net revenue reaching BRL 302.7 million, 19.3% increase over the 2Q22, excluding the straight-lining of rent. Net revenue reached BRL 308 million, up by 16.4% vis-à-vis 2022. Consolidated EBITDA reaching BRL 209 million, up by 18.6%, with an adjusted EBITDA margin of 67.9%. Adjusted net income reaching BRL 85.5 million, an 86.6% increase over the 2Q22, an adjusted net margin of 37.8%. Adjusted FFO reaching BRL 228.9 million, up by 52.3%. In terms of our leverage that I have already mentioned, also quite positive. We had a drop vis-à-vis the first quarter, which is healthy. We ended at 2.36x net debt adjusted EBITDA.
At the assembly, we approved the payout of dividend in four installments. The first will be BRL 110 million. It will be paid in July. We also spoke about a lease at Sky Galeria, a record of occupancy in such a short time. For those who go through the highway, this is a beautiful, very visible tower, especially in the evening. In May of 2023, we settled the ninth debenture issue in the amount of BRL 300 million. The company's most expensive debt because of the lockdown and the pandemic. We will observe an improvement vis-à-vis the debt cost going forward. The second collection campaign, which I have already mentioned, that ended after the Brazilian Valentine's Day. We did have important insights regarding our customers because of collections. We identified some important customers that are not normally very visible to us.
Something that is very important for us, the EXPATS Institute. We were recognized the company in the retail sector for diversity and inclusion ranking. We had a record high in leased spaces, as I mentioned, 151 contracts signed only in the quarter. Subsequent events, the buyback program that we announced, along with the release of up to BRL 136 million, 2.9% of the shares that are circulating. The Barbie Dreamhouse Experience at JK Iguatemi, which is something exclusive that we carried out with Mattel. What is also very important, we have made investments in Etiqueta Única, and we have just opened a kiosk in Iguatemi, São Paulo, to deliver products to sellers and also for the exhibition of products that might be of interest.
It has already shown some interesting results, increasing the haul of sellers because of the visibility and quality of what is being sold. I invite all of you to come visit this kiosk. It truly is very interesting. To speak about the sustainability report, this is our first report, and it is the beginning of our journey to converse on this topic broadly. It is a commitment to maintain this year after year, and we're going to focus our efforts on this during the year. In this specific report, we highlight our efforts to reduce energy and water consumption, the implementation of sustainable technologies, and of course, the responsible waste management. We also emphasize what we want in terms of our role when it comes to the company's sustainability. All of those partnerships that we have to enhance the environment and social work.
In our report, we have carefully followed the SASB guidelines, word for word, showing that we were going to fully comply with these guidelines. This should enable us to involve our report with new certifications. In this case, we're 100% compliant. Of course, we have our real estate property development on page 8. We show you the development of a prototype street for Casa Figueira. We began the works in June, if I'm not mistaken, at the end of May, and the intention is from the shopping mall to show the last expansion. It's at the junction where we have the shopping mall, and we will be able to visit this beginning in September. Casa Figueira should be ready at the beginning of 2Q 2024.
It is a meeting point, the epicenter of our follow-up in the neighborhood, and it's important, of course, to give people greater visibility of what we're going to build in the coming years. With this, I would like to give the floor to Guido to speak about the operational and financial highlights. Good morning, everybody. We're going to speak about the main operational indicators. We're on slide 10. First of all, our GLA evaluation. We bought a share of 36% at Iguatemi JK, increasing our variation by 3%. Total GLA of the shopping mall will not change. We were already shareholders in JK. We have a variation of 2.5% in total GLA because of the coming into operation of the Galeria Tower after a few months of inauguration.
As you can see, this represents BRL 13 billion of our gross revenue, and JK represents 5% of the growth of our net revenue. Another figure that I would like to highlight that has already been mentioned are the total sales, with a growth of 8% in the second quarter, and the sale of 11.3% increase in July, considering we have not even accounted for the last week. In the second quarter, we had services and events with variations in the food of 9% and 11%, and at the end of June and July, a significant growth in services with an increase in the food mall of 22% in July. Fashion growing 11%, services growing 18%, and food growing 16%. We had already seen this in the past.
Retailers learning how to learn with the winter season, we had a very successful winter season. Of course, we had a great deal of work on slow and activation of the main events to bring in people to our shopping mall. Well, there's a special mention of the Barbie Dream House. One week before the inauguration, we had sold 21,000 tickets, and until September, we have sold another 60,000 tickets, and we had to extend the schedules. We have expanded the schedules from 11:00 A.M. to 10:00 P.M., and all of the slots have been filled in. Now, the sale has been a highlight. We speak of a growth with a real gain of 7% based on IGPM during the period, of course, this merits underscoring. Can you hear us?
Yes, you may continue if you wish, please. Once again, can you all hear us? Yes, we had a problem with our line. We do apologize, we were speaking about the growth of lease. We have an accrued growth since 2019 that goes beyond 60%, we were able to have a growth of 10.5% in same-store rent and 9% in same area rents. We have our guidance, we have had a record of contracts in the second quarter. In the month of July, we signed 40 contracts just yesterday. This, of course, is a vacation month, we have been able to attain a record of contracts in our portfolio for the month of July. This shows you the commercial activation. We now go on to slide number 11. That will be broken down further ahead.
We have a growth of 19% in net revenue, our EBITDA growing 17%, and we ended with a net income of BRL 77 million. We go on to slide number 12, where we have our P&L without the straight-line effect and for commerce effect and share swap results. This is our proxy cash effect. We have a growth of revenue of 16.4%, reaching BRL 308 million, an EBITDA margin of BRL 208 million. Our growth of FFO with a growth, and we have reached 42% margin growth in FFO. Net income coming close to 30% with BRL 85,000 of net income. We go on to slide 13 to speak about the financial results that concentrates iRetail and Iguatemi. You see the improvement in the results. We were working towards the breakeven of Iguatemi 365.
BRL 13 million negative to BRL 7 million. This is thanks to the work in the retail segment. We had an effect that we were aware of. We removed this from our portfolio in June 1st because of Balenciaga, and we had a gain in revenue of BRL 10 million, and because of the sale of the stock of BRL 11 million. Because of the work we did in SG&A in retail and Iguatemi 365, we had a improvement of EBITDA of 40%. When we look at the six months, we are at BRL 15 million negative, and this should continue on until the end of the year. We had already been speaking about this since last year, we will have a significant improvement vis-a-vis the year 2022. We go to the financials for the malls.
What is important here is to show you our margin preserved at 78%, our EBITDA margin in the second quarter, as well as in the first 6 months. Net revenue with an increase. Now, when you take away the effect of JK, which is 5 points, we have a growth of 15% in net revenue. EBITDA growing 14.6% to BRL 216,000. I will speak about our costs and expenses going ahead. If we look at our results, we have a growth for 6 months of 16% in gross revenue for the malls, and this, of course, includes rentals, management fees, parking, and others, and 14.6% for the second quarter.
Now, as you can see, the variation in rentals was 15.2%, and the occupancy curve has been maintained, and this shows the work we have carried out to have a positive lease spread on our leases and in the stores that are under renewal. We also have a growth of 16% in parking, with a growth of flow vis-à-vis 2022. This because we have increased their tariffs throughout the year, and we had a growth in the vehicle flow in July, and the growth vis-à-vis the second quarter 2022 was 5%, and as a whole, it has been 8%. It shows us that the third quarter will also provide us with very strong results.
We go on to the rental revenue for malls, a very significant growth in minimum rent, excellent work that we carried out with kiosks and media, both inside and outside of the mall, and of course, the part of events that is of supreme importance. Our events are our property, and they have become a part of the calendar of the city, for example, the Tune Party and the events we have at JK, very successful events, that is, events that are fully sponsored. These are remunerating our events evermore, as we had said about Barbie. This, of course, will take off during the year, and it will continue to grow during the second half of the year. Let's look at costs and expenses.
It is worthwhile mentioning that we do have significant variations here, especially in terms of personnel, the cost of personnel. We have reinforced our commercial team, but during this quarter, we revised our processes, looking at the efficiency of the company, and this work ended at the end of the second quarter. The results of this work will appear in the third and fourth quarter, not only in personnel, but third-party services as well. In terms of costs and expenses, the third and fourth quarter will be better when compared to 2022. Costs and expenses grow approximately 8%, but when we look at the percentage of net revenue, they drop, and in the second quarter of 2023, compared to the second quarter of 2022, there is a reduction of 10.8% as a percentage of our net revenue.
We go on to slide 18. As we were mentioning at the end of last year, we acquired a part of JK Shopping Mall, at a we obtained a very low-cost credit, and this operation was done through a swap. We're at 99.5% of CDI, with a long loop term than we normally have. On December 31st, we were at 34% CDI, and presently, we're almost at 100% of CDI of our cost of debt. We have enhanced our debt profile, as well as enhancing the term, and we have a leverage of 2.36, our FFO in the second quarter. The market projection is to have a drop in interest rates.
We should have an improvement in our financial results, especially in the second half of the year, we will have an improvement in the financial revenues. We're in slide 19. You'll see that we're at 100% of our CDI, very close to that, with 87% of our debt dropping. The drop of the Selic, of course, will aid and abet us in our financial structure. Finally, we would like to reaffirm our annual guidance. We're quite above, the net revenue growth, above the retail, with a growth of 19.7%. When we look at EBITDA margin, we are at 78.2, and total EBITDA margin at 68.6%.
The EBITDA margin for malls and total will be closer to the ceiling than to the floor, because in this first half, we were somewhat below what we expected, especially when we look at this in comparison with 2022. We have revenues that will be accounted for in the second half of the year. They will be above what we had in the first half of the year, enhancing our revenues. Throughout the quarters, we will be announcing the sale of fractions and property, as Chris announced at the beginning. We also have an efficiency project ongoing that will enhance all of these figures in the second half of the year, enabling us to comply with the guidance in all of the items that are on this table. With this, I would like to end my presentation and open the floor for questions and answers.
We will now go on to the question-and-answer session only for analysts and investors. Should you have any question, please press star 1. If your question has been answered, you can withdraw from the queue by pressing star 2. Questions will be answered in the order in which they are received. If you could please pick up your phones from the hook when posing the question to allow for optimal sound quality. Please hold while we pool for questions. Our first question is from Aline Caldeira, from Bank of America. You may proceed, ma'am. Good morning, Chris. Good morning, Guido. Thank you for taking my questions, and congratulations for your results. I would like to begin with 2 things. First, your sales in July that show an acceleration. Had you expected this trend in the second quarter, having a marginal increase in the second half of the year?
Was there any specific category or an asset that drew your attention and that led to this increase in sales? My second question refers to your commercial strategy. Your figures are below the average, at the same time that you have a very attractive spread. How are you thinking of your strategy? Are you comfortable in terms of occupancy? Thank you. These are my questions. Good morning, Aline. Let's speak a bit about July. We have seen the sales. While Mother's Day was very good, June was even better, and July, of course, was the best of all. All of this was aided and abetted by that, a group of events that, of course, are very important. The good news is that all of this is across the board. We don't have one shopping mall leading this.
They're all performing very well, and all categories as well, which is very important. At the beginning of the pandemic, we would see international brands with a better performance compared to domestic brands. This is no longer the case. As Guido mentioned, we had a very strong performance in fashion, which of course, is what is more significant when we're speaking about total GLA. There are segments that are important. Jewelry continues to do very well, as well as entertainment. Because of this new lot of movies, people are going back to the habit of watching movies, and we have had an increase in movies through the years. We spoke about the films and the different groups of films. When the films are good, the business will tend to be good as well.
This weekend, I took my daughter to the Barbie Dreamhouse Experience, everybody was wearing pink: men, women, children. You can see exactly who's going to watch Barbie and who's going to watch Oppenheimer, normally dressed in black. This is part of the entertainment, we're resuming all of this after what we went through in 2020, 2021, of course, this has a repercussion on sales. In commercial turnover, we have always spoken about this. This will impact our stronger portfolios, when we speak about total sales, we're not speaking about square meter, we're speaking about total sales. 92% of occupancy rate means we have the best sales increase in the sector. This shows our strength. Obviously, when you have good sales, the tenants will remain, we are able to increase the lease and renew the leases. Everything is positive.
Well, the cure of all evils in the industry is to have good sales. Sales are gaining force. The results are doing well. Everybody is speaking about this. We also have more people looking us out. I had remarked about this in other quarters. We're reopening with the interest in new brands, in innovative brands. We're holding conversations with several of the brands because there is a lot of red tape to bring in new tenants and to bring in new brands. We're going to see new brands coming into the malls. This also holds true when we speak about the chain. We take new brands to the shopping malls in the hinterlands. This reinforces the quality of mix and increases occupation per square meter.
All of this is very positive, we're beginning to feel not as it was before the pandemic, but before the recession, we're quite confident that we will be able to maintain this in the coming quarters. Simply to add something to the part of sales. Among all of the segments, only two segments were below 10% of growth. All the others grew. Home decor and the diversity of products for home. When we look at the malls in the second quarter, the malls sold above 10%. In July, in our portfolio, all the segments sold above 10%. As Chris mentioned, sales have been distributed in all of these different segments, with an emphasis on fashion that grew 13.2%, driving the sales. We have a growth that was doubled. Thank you. Thank you very much for the answers.
Next question is from Ygor Altero from XP Investimentos. You may proceed. Good morning, and thank you for the presentation. We have two questions. The first, we spoke about to tenants, about the tax load, to understand how it was doing, and well, this is very important in the decision to close a contract with you. If you have any visibility in the size of the launch that you are about to carry out. Thank you very much. Good morning, Igor. To speak about the tax reform, we have not had any conversation with the tenants about this. I think a great deal still has to happen. We have the complementary laws, the aliquots, so, so far, we have not held a discussion on the new tax reform.
The work that we have done with ABRASCE and SECOVI and all of the team that is at the Congress, including the rapporteur, the rapporteur from the government and the rapporteur from the Congress, we were able to maintain all of the real estate activity without any changes. We are now holding discussions with the Senate and the association to discuss the aliquot for this complementary law. So far, there has been no discussion on the tax reform or not carrying out an operation because of what could happen with this reform. As I mentioned before, everybody is trying to take advantage of this growth wave. More resilient companies do want to become part of the mall, and that is why we have this record in the signing of contracts. Regarding the international logistics, this facilitates the conversation with them.
People understand how things operate abroad, and we are going to be announcing 2 new contracts that will come in during the year. Of course, this is of great help.... Understanding our tax scheme is not a simple tax. To speak a bit about Casa Figueira, as I mentioned, we're going to begin works this year with the prototype for Casa Figueira, which will be a meeting point for the neighborhood, and begin the infrastructure work at the end of this year and beginning of 2024. We have 4 years for the infrastructure works. We probably will not take this long. We have distributed the work through time. When it comes to the selling of the towers, this will begin the coming year. We will begin with a prototype and with a certain facade of Casa Figueira already constructed.
We will begin our relationship with possible partners in the construction of these towers. Therefore, at the beginning of 2024, we're going to define how to market all this and how the rollout will take place. Without a doubt, during the. Well, we will be doing this in the coming 5-7 years. There are a large number of towers. We cannot do this hastily. It would be an excess of capacity to offer. Therefore, we're also thinking about the physical rollout of this business. We want to sell those that are closer to the shopping mall initially. For those who are aware of the topography, there is a drop. Of course, you will have to go down some stairs, and the towers will be on the street.
They're practically on the street, and they will, of course, be the 1st that will be sold off. Of course. Thank you, Chris. Thank you, Guido. Our next question is from Victor Tapia from UBS. You may proceed, sir. Good morning, everybody. I would like to broach 2 topics with you. 1st, about the guidance. In this 1st half of the year, in terms of revenues, you showed us your guidance. When we look at what is happening, you have withdrawn discounts. The sales are very healthy, better than we had imagined or expected. The commercial part, occupancy should improve. Occupancy is still quite low. Is there a possibility of reviewing that guidance when it comes to revenues, a review upwards? And when it comes to cost, if you could give us more details, more color regarding this efficiency plan that will enhance your EBITDA margin.
Once again, if we could hear more details about this efficiency plan. Secondly, the cost of occupancy, 11%. We have an ITP scenario where the cost of rent is zero and the sales performance is truly surprising. Which is the schedule for the maturity of contracts or contracts that will undergo revision in the coming 12 months, so that we can figure out which will be the impact and what will happen with this indicator? If you could please explain this further. Victor, to speak about that guidance, I would like to reinforce what I said. We're quite calm when it comes to the growth of our net revenue. We are at 19%. When we look at the second half of the year in malls, we should be in accordance with the guidance. I don't think we require a revision.
Now, we have the effect of the IGPM on lease. It was already 13%. It should drop as of the second half of the year. Beginning this year, the IGPM should become negative, and there is a monthly contractual correction where we have to look backwards 12 months. The IGPM decreases because there will be a reduction of the impact upon the renewal of the contract. We're at 92.7% occupancy rate. We know that all of the contracts that we have been signing will be in effect at the end of the 3rd quarter, beginning of 4th quarter. We will have an improvement in the rent because of the new leases, a very strong improvement in the 4th quarter, which, of course, will also be of help with the cost. These are costs that are inherent to the process.
If we look at the mall segment, we don't have a great deal of revisions. We're at 9.7%. We're going to enhance the results of Iguatemi 365. We have just sold off a brand, and this will enable us to bring down different brands. This was a case of Balenciaga, which was a brand that had a significant weight on our portfolio. We saw a drop in the retail segment because of the improvement in the result of Iguatemi 365. There hasn't been a growth in peak rate, it is the same as it was last year. We're quite calm with the guidance that we have offered for the retail part and the malls. Now, when it comes to costs and EBITDA margin, we have two ongoing processes. You spoke about efficiency.
What we did was to analyze all of the company cards, all of the processes. Because of the pandemic, we had an excess of work in some areas. We had to have an increase in production, for example, in the legal area, commercial, marketing, HR. Because of all the work we had during the pandemic, I remind you that in 2020, in June, we carried out a layoff of 10%, and the company, due to the effects of the pandemic, when we resumed once again, we had to hire more personnel, and we had a growth in costs. What we did was to bring down the cost of our payroll to BRL 219 based on IPCA. The cost of our payroll today is the same as BRL 219.
We have not had a real growth therefore, if you observe costs and expenses through the quarters, you see that there will be negative results, thanks to the work that we did when compared to 2022. We're not selling any fractions, and that would be both in other revenues. We cannot speak about this because we're hiring, but we will have announcements in the third, fourth quarters. We have reassessed our performance in the hinterlands because of the success of Shopping Galleria. There's a waiting line for high-quality companies in the region, of course, we will have work to do there.
In the first semester, we were below in terms of sales, sales of point, and we do have announcements that will represent a relevant change in the second half of the year, with an impact on EBITDA margin for the shopping mall. Speaking about the cost of occupancy, even with a growth of revenues about sales, we maintain a better occupancy than at in the first half of 2022. Besides having positive work, we have been working a great deal on the condominium costs. We're maintaining them with a real negative growth. If you look at these costs, you will observe that they are negative. 2017 and 2022, we carried out work in the company.
For 5 years, we were at a cost practically zero. This year, we are working on this again to keep the cost below inflation so that we can have a positive spread in the coming quarters. We have been working with the commercial area. Now, the adjustment is based on IGPM, we have quite a bit of room to work with this positive spread that will impact our revenues. The revenues with an increase of 16% vis-a-vis 2019. Very good. Could you give me a breakdown of the contract that is about to mature or what will undergo review in the next 12 months? Until December, 16%, and in the coming 12 months, approximately 30%-33%. Thank you. Thank you very much. Our next question is from Andre Tipi from Itaú BBA. You may proceed. Good morning, Chris and Guido.
Thank you for the presentation and for taking our questions. The question is about occupation. You mentioned that record figure in terms of signing new contracts, that you had a very strong quarter, and incredible July. Can you give us more color of how this will be distributed among the assets? Which are the assets that have contributed more in terms of new contracts, and which are the assets where you have more space to improve the part of occupation, and which has been the demand for these assets and expansions? If you could share your plans for expansion. You had mentioned Iguatemi São Paulo and Brasília, that would be part of your pipeline. If you could give us more color of this, and what else is in your radar? Thank you very much. Hello, André.
Now, let's speak a bit about the occupation rate and what is happening with the contracts. We have quite a few things happening in the areas outside of São Paulo capital. São Paulo capital has a very high occupation rate. We have a great deal of things happening. It's like a crossword in Iguatemi, JK, and Pátio Higienópolis shopping malls. It's like the dance of the chairs, one comes out, something else comes in. We basically change six for half a dozen, and we're making changes, changing people from places to accommodate new people. We had a more relevant change in Pátio Higienópolis 'cause we had the entry of Zara, which, by the way, will be opening next week, and that takes the back part of the entrance of the Higienópolis floor.
This was quite relevant, and it uses the part that was for corridors previously, increasing the GLA somewhat. Now, the change of those 95 that we have referred to for the end of the year, has a great deal to do with the hinterlands in São Paulo, quite a bit of things in the south and Brasília, which is also part of this group. There is no more space in Brasília to accommodate new spaces. We have had a very strong demand in the hinterlands, many new things getting to the interior, and large areas that were breaking down and working with contracts for smaller spaces in areas that were much greater. To increase our efficiency per square meter, we're quite confident. Well, there's a bit of everything. We have restaurants, we have stores, many different things that are about to come.
To speak about the expansions, and this refers to what we are discussing. We did speak about Brasília. We're finishing our designs for the expansion, and the coming months, we should begin the changes to approve the expansion in Iguatemi, São Paulo. In truth, we already have the approval for expansion. Every square meter in São Paulo is worth a great deal. It's not an expansion that is similar to what will happen in the hinterlands with 20,000 square meters, but this has already been approved. We're finalizing the design, and we will allocate some CapEx the coming year to prepare the area for the expansion in São Paulo next year. When we speak about guidance for 2024, all of this will become more clear.
When we speak about CapEx at the beginning of 2024, as we did when we had more greenfield operations in our portfolio, we're going to use the same scheme. These are two shopping malls with quite a bit of demand in Brasília. It should be significant. I don't know if you recall, we had several pop-up stores in Brasília for international brands. They all achieved incredible results, and now there is no room. It's the best possible scenario to begin our expansion work because everybody is giving something to improve stores, to open stores, but we have no room to accommodate them. We're quite confident in the future expansion in Brasília. It will be an important plus for the region. Well, thank you. Thank you very much. Our next question is from Fanny Oreng , from Santander Bank. You may proceed, Fani. Good morning, Chris and Guido.
I have a single question. When you look at the company portfolio today, have you thought about possible disinvestment of some assets, assets that are somewhat displaced in the scope of your portfolio, for example, Iguatemi São Paulo? I'm thinking of the return that you have in your real estate developments. Perhaps this could open a new window for investment. Thank you, and congratulations for your results. Hello, Fanny. Well-
The question, the answer is yes. We always think about recycling our portfolio. We were more active in the past when we sold in Rio de Janeiro, through Florianopolis, Caxias. We're always looking at this, but to look at things doesn't mean that the opportunities are on the table. We know what we can do. It's all about having the right market and price to be able to proceed with this. Perhaps going forward, we will have some novelties in this area, but for the time being, what I can say is that we do carry out this exercise every day. Let me share something with you. One of our American counterparts came to Brazil. He was a CEO at the time.
Carlos and myself were at the meeting. He said that every year in strategic planning, they had dozens of malls in their portfolio. The question was: Would we buy this asset today? If the answer was no, they would put it up for sale without further chance. There was no possibility of recovering the asset. This really marked us. That was more than 10 years ago. We try to follow the same discipline, but of course, we depend on the market. Yes, we are looking funny. Thank you, Chris. That was very clear. Thank you very much. Our next question is from André Balsanelli from BTG Pactual. You may proceed. Good morning, Chris and Guido. Thank you for the call. If you could speak about the change of leadership in Iguatemi 365 with Gabriel Raposo in this trade-off, you're always thinking about growth, selection, sustainability.
I believe that change is due to the new focus on profitability. If you could also... Well, 365 is looking at several international brands. Now, when it comes to these international brands, do you have management over these brands in iRetail as well? Thank you very much. Good morning. In truth, yes. When we began 365, we imagined that it would be, well, something completely independent. We thought about it as a separate shopping. I think that in reality, it continues to be so. Now, the reality of the operation, we needed to step back before we could proceed.
If we look at this new focus, brands that are more profitable or so, we have put our foot on the brake in terms of growth, and what happened is that it became too big for the new operations of Iguatemi 365. Fantastic! It was very good for us, the size of Iguatemi 365, well, only Mario is not sufficient for this, and he himself thought that it's not only for us in terms of cost, for him, it was an enormous challenge. We reached an agreement, and we had a very soft transition between ourselves and Mario. We continue to be friends. Initially, you yourself said in your second question, we should focus mainly on the brands that we are operating in iRetail and some partner brands that we have within iRetail, but they do not have brick-and-mortar stores.
Of course, we're going to work with brand, I'll call it one marketplace, brands that focus on higher profitability so that we can shrink the business a bit, focus once again on profitability, eliminate the company cash burn, and what is more important is to have time to think about the connection of 365 with everything else we're doing in the company. It has to work with Iguatemi Daily, with Iguatemi One. It has to have a broader focus in terms of benefiting the brick-and-mortar part, and it will give us time to work with this union of all the moving parts, which presently is not very clear for the consumer. We do have an idea of the roadmap, and this will give us time to return to a more gradual growth, always thinking about maintaining the profitability of the business.
Well, thank you, Chris, and have a good day. Our next question is from Pedro, from Credit Suisse. You may proceed, sir. Good morning, Chris and Guido. Thank you for the presentation and for taking my questions. First of all, I would like to know if you can give us some color in terms of what is happening, happening commercially nowadays. While lease is something that will increase, how much GLA are you negotiating, and which will be the distribution of the signature contracts in the coming 2 contracts, if we should focus on that one specifically, or if it would be something granular? The second question refers to your potential in São Paulo. We have seen record sales, we see other players in the sector.
If you're thinking of working with the green field in 2024, which would be the company mindset in terms of that, if you're thinking of the cost of construction, BRL 20,000-25,000 per square meter, which is what we had discussed in the past. Well, let's speak a bit about the occupation rate, what the distribution of. We have those contracts, typically, when we sign a contract, we have two periods of inaugurations. One, to get the fourth quarter with Black Friday and Christmas, in the first half of the year, where we have a lot of inaugurations, you know, in March, which is after the vacation, 1 week Mother's Day. It's very difficult to see. These stores are not here in July, possible, but this is 1 year coming up. It's not very probable.
We do have the window, and we see leads, and then observation in those specific periods. We will see an important change in occupation going from the third quarter to the fourth quarter, and further ahead, when we go from the first quarter to the second quarter. These are the periods where we tend to have some inaugurations because you have a full price connection and a stronger retail period. Perhaps we won't fully see what happens and increase in occupation in the third quarter, because we will be undergoing that change. In the fourth quarter, you will see many effects coming into effect, inauguration, operating already in December. We don't have a super appetite for green, green fields yet. We speak about the project in São Paulo frequently with the business. We still have some steps for the approval of the project.
You will recall that we had a discussion with the general attorney on the lot. This discussion is on a good path. Despite this, we still don't have a significant appetite. We're thinking of M&A and expansion possibilities, as we have mentioned, more than we have for the green field. Expansion, of course, makes much more sense for us than the construction. It's fun that we're having an increase in sales, but do remember, for any shopping mall like ours, we're speaking of 300, 400 tenants that will have to be on the new project. In the time, we would make quite a bit of CapEx and key money. I think that we have more probability of making our capital increase through towers on an M&A possibility. Allow me to complement something on the commercial part.
When we said that we signed 151 contracts and in July, an additional 40 contracts, we got to 190 contracts signed in the 1st half of the year. Now, inaugurating the 2nd half, almost all of it will be inaugurating. 10 contracts will come into effect only in 2024. This represents an improvement of 4,000-5,000 lease meters for the 2nd half of the year. Simply to give you some color, distributed among all the shopping malls. In malls with greater vacancy, we have a better occupation, we keep 97%-98%. Shopping is close to 100%. Outlets like we have 100% occupation. This can be shopping, enter some buildings, then the shopping mall. In fact, we are not pleased with the inauguration.
An area we have to localize, but this occupation represents almost 200 stores. Thank you, Guido. Thank you, Chris. Have a good day. I, Goldman, you may proceed, Gisele. Thank you for taking our questions. Good morning. We also have two questions. You spoke about a spread of 5% in the last quarter. I believe the spread was 3-some %. I would like to know if you can give a comment, how you imagine what is amazing spread will move forward? Will we have an acceleration or we will, or will we remain at that level of spread? Then would like to go back to the EBITDA margin topic. Earlier on, you said that this should expand. I thought we tried the main drivers for this EBITDA margin expansion. Is it a leasing spread? Is it an increase in occupation cost, retail?
If you could give us an idea, if it is what represent 30% of leasing, to have an idea of the growth. Thank you. We're speaking a bit about leasing spread, and we have been highly disciplined in terms of this occupation. It's very easy to occupy spaces. We have a demand, a lot of demand. The question is if we have a qualified demand at the right price. Well, the thing is to have discipline and not become despair or wanting to close the occupancy rate faster in detriment of the lease we're seeking for that area. We want to have all of this together. We do want to close vacancies with the right price and with the right tenant. We don't want to have tenants that won't add anything to our mix and won't add anything to the shopping mall.
I oftentimes say no to tenants we have, but do not have the right price, or we also say no because of the mix. Although this will have an immediate impact on our P&L in the long term, in the medium or long term, the impact will be positive. When you bring in a tenant with a negative leasing spread through time, this will either way be a positive base. You will say, I have those through the 3% of the vacant area, and if you compare leasing spread, the tenant will ask for lower lease, and through time, we will come out losing. It's very important that positive leasing spread. This shows the quality not only of those who are closing the vacancy, but shows that we're closing with the right price, and through time, they will realize the quality it brings in.
The answer I can give you it is, this discipline will continue on. It's part of our DNA, it's part of our strategy, it's part of the way in which we operate. We're not going to promise anything. You can be absolutely sure of that. How positive this will be will also depend on the economy and other influences. We're only going to think about zero upwards, never anything negative. To answer the second question, we have already spoken about the spread. Yes, the leasing spread is one of the levers to maintaining the growth of our net revenue and the improvement of EBITDA margin. We have been improving the this past quarter after quarter, keeping in mind the cost, and we have zero default levels. In July, it's 3.9.
A default rate that is better than in the years before the pandemic, compared to 14 to 13 before the recession. The bad debt closing low 1%, and this shows that all of these changes that we have made in terms of our tenants over the years have been a healthier base that enables us to have positive leasing spreads quarter after quarter, without working with discount, without impacting the occupancy rate. Another thing that we have already mentioned refers to the retail part. When we speak about our retail in 2025, we had a negative EBITDA in the first half of the year. Compared to 2023 and compared with the first half of 2023. We spoke about costs and expenses. We have worked with efficiency improvements that until July 3rd, there was no reflection in the first half of the year.
This will only appear beginning in August, there will be a drop in costs and expenses in the third and fourth quarter. This, besides, we have been doing very well and we like basic spot. Now, in the first half of the year, below what we had estimated in terms of spending point. We have a project that will be accounted for, of course, that will increase this value. This will help us with other new and lower than what we had estimated. It's not better than 2022, where we have that recovery of events of the years 2020, 2021. Even with the pandemic, where we had a full year of IP. We have recovered almost, I think it's better than we estimate, and we think that this will improve our margin, and we haven't solved any practical dimension.
Of we have 2 projects. We will district through all of these. In March, the malls, the demand of guidance, and we'll give out net private move, where we've also been pushed the ceiling. Thank you. Thank you very much. Thank you, Chris. Thank you, Guido. Our next question from Marcelo Motta from JP Morgan. You may proceed, sir. To early, pretty, doing really stay on, but that is. What is your growth, or are you thinking of something very large? Tell this for you or next. Are you looking at guidance, way out than you did last year? Thank you. Thank you very much. Welcome. When it comes to the. We, but they're always around the same topic. We go around it, perhaps something will come up.
I think it's obviously competition, the real to interact with it, generate a need of the some opportunity for us to help. We have more opportunity to observe, and so we get cycle together with my name and good. I know this is just in the scenario, it's perhaps complimentary to our strategy and might help us. Remind you that the pandemic payout of 60. It's what we are doing. Doing 2021, we, while we come up with a minimum last year. What kind of... The icon and this, the arts, because of the we... And we have next year, we will go, we will go day to wait. And now that, I mean, and we, yeah, 4th, 5, and 6th. We're all aboard. We have going to extend yet. We're going in 2024, and we're beginning to represents 20...
Once again, to pay out dividends for our shareholders.
Thank you. That was very clear. Thank you. Well, thank you. Thank you. As we will end the call, Ms. Cristina, for her closing remarks, you may proceed.
Well, thank you very much for your attendance on our call. We're very happy with the results that we're reporting, with the success, of course, questions or comments you may have. Please stay, needs to contact and continue this conversation. Otherwise, we will see you in the next one. Thank you very much. We got any call, thank you for your attendance. You may disconnect now.