Good morning. Welcome, everyone, to Multiplan's first Q2 2022 earnings conference call. Today we have Mr. José Isaac Peres, CEO. Mr. Armando d'Almeida Neto, CFO and Investor Relations Officer. We also have Mr. Marcello Barnes, CIO. Mr. Hans Melchers, Planning and Investor Relations Director, and Mr. Richard Svartman, Digital Strategy Director.
Now, we inform you that today's live webcast and presentation will be accessed through Multiplan website at ir.multiplan.com.br. We also would like to inform you that this event is being recorded, and all participants will be in a listen-only mode during the company's presentation. Thereafter, we are going to start with a Q&A session, and at the time we will receive further instructions. Should any participant need any assistance during the call, please press asterisk or star zero to reach the operator.
Before proceeding, we would like to let you know that any forward-looking statements that are based on the beliefs and assumptions of Multiplan's management and based on operational goals. It is based on information that is currently available for the company. These forward-looking statements are not guarantees of performance, and they involve risks and uncertainties. We are talking about events of the future. Therefore, they depend on circumstances that may or may not occur.
The investors should understand that conditions related to the macroeconomic scenario, industry, and other factors could also cause the results to differ materially from the expressed in such forward-looking statements. This earnings call will last for approximately 60 minutes. After this period, the investor relations team will be available for the Q&A session. Now, I would like to give the floor to Mr. José Isaac Peres, President, that will start with the presentation. Please, Mr. Peres.
Good morning, ladies and gentlemen. It is a great pleasure to be here in this earnings call. Now we start the first presentation for the year 2022. We have some great news for you, and I will be as brief and objective as possible to talk about this performance.
We are joyful about the performance that we have had so far this year, and I would like to explain to you what is the base that we use to demonstrate this. The sales for this quarter are almost BRL 4 billion. If you compare it to 2019, the first quarter, which was a year of growth, a great year, 2019, then we had 13.5% more growth comparing the first quarter of 2019 with the first quarter of 2022.
26.4%, if you compare it to the first quarter of 2020, and 74.8%, if you compare it to the first quarter of 2021. Our sales have increased month-by-month. Here, it is an observation, a digression. In Rio de Janeiro, we are comparing with 2019. In January, we grew 4.9%. In February, we grew 15.3%. In March, 20.8%.
In April, if you consider the first 25 days of April, we grew 32.3% in regards month-by-month if you compare it to 2019. In April, the sales are estimated to be around BRL 1.6 billion. The acceleration is an increase of 140.2% if you compare to April 2021. Here is a fantastic number, 2,125% if you compare it to April 2020. These are kind of scary numbers, but nonetheless, very good numbers. You see that the pandemic affected our sector severely.
Still talking about April 2022 and comparing it to April 2019, if we estimate, we did an estimation. Looking at the present, we believe that our sales can get to BRL 20 billion even. Our last estimate would be a growth of 20% if you compare it to 2019. If you compare it to the other years, it is not even fair because we were closed, we had a pandemic.
We all know how it affected, and a concern of the municipal state authorities, regardless of us doing a fantastic work of investigating the level of contamination at the shopping mall, and we hired an international company with several countries. After the evaluation, we got a result that was shocking. We let the municipalities know the results of our report. There was no virus in our shopping malls.
That idea that the virus lasts on wood, on clothing, that did not happen. In the air conditioning, we had nothing in the air, we had nothing in the restrooms. What I would like to say is that regardless of our efforts to show the authorities that we are taking all the hygiene precautions, all the sanitary precautions, with social distancing and all the protocols that were established by the Brazilian Association of Shopping Malls, we suffered with this.
This is a moment for recovery, and I believe that this is very similar to other sectors of the economy. In this first quarter, the malls of Rio de Janeiro were really a highlight. It was the first one to release the people from having to use the mask in closed quarters.
It was a decision of the authorities that we do not have to use the masks, so it had a very significant effect, and it was recognized at the shopping mall level. In this first quarter of 2022, the shopping malls of Rio de Janeiro grew 30%. VillageMall, for example, the growth is 57% in comparison to 2019. This happened because during the pandemic, the population of that southern zone went more to the VillageMall. It is a very international mall.
It has a lot of different clothing companies, so that really helped. Regardless of not having a mask mandate, we are still doing very well. A very expressive piece of data, and I believe MorumbiShopping, it has an increase in vehicle transit 36% above 2019.
That has to do also with the event that we are sponsoring, the Van Gogh exposition, that really brought over 50,000 people, and that is how we celebrate MorumbiShopping, which will be 40 years old in May. We have a few 40-year-olds in our portfolio. In this quarter, the gross revenue is BRL 453 million, a grew of 33% if you compare it to 2019.
If we compare it to 2020, 59%, so on and so forth. The numbers speak for themselves. The fact that I would like to remind everyone is that our DNA, the Multiplan company, was born out of the real estate sector. At this moment, we have 825,000 sq m for future projects, future real estate developments. The shopping malls, we still have a project for expansion for over 200,000 sq m.
The best thing that we can have in terms of profitability is to grow where the malls are already profitable, where there is a high demand. The expansion has to adapt the mall to the new needs of the society. Our concern all throughout these 50 years was taking into consideration the social demands. Before the shopping malls, they were focused on clothing, fast food, and some other activities.
Today, the shopping malls concentrate big areas for leisures, restaurants, and therefore, this is demanded from society. It is an area of entertainment, joy, joyfulness, where people can meet with safety. The shopping mall is a product of the urban chaos. If there wasn't any malls, the cities would not work.
If you remember years ago, we had an exponential growth in automobiles and it's evident that there was no way that we could simply park the car in the street to do our shopping. The shopping mall is a creative urban solution, and today, evidently, we realize that people go to the mall, at least in Rio de Janeiro, and then you park, for example, in Rio de Janeiro, at the shopping mall, and then you go to the beach.
People actually use our parking lots to go to the beach. We hope that today, the shopping mall in the cities are the big point for meeting up. That's where the families go, and we are gathering the fruits of our labor, regardless of the moment of the pandemic, and we see growth in our sales. I estimate that things are going to continue to grow.
We can see that the companies that were, the tenants, we were at the peak of the pandemic, 10% was our vacancy. Now it's 5% vacancy, and usually, the usual number was 2% - 3%. We somehow are gathering the fruits of our labor. When we talked to our tenants, when we basically did not charge those condominium charges from our tenants over billions and billions of BRL.
The tenants are our partners, therefore, we had to give them good facilities, and we have to work with them. That's why the company had a recovery. We understand that the public, the shopping mall, everybody is our public. This partnership, a long-term partnership, today bears the positive fruits, and I think that we have one of the lowest vacancy rates in Brazil. We also would like to talk about we're building in Porto Alegre, a great project.
It's a neighborhood. In the southern region of Porto Alegre that is growing after we invested in BarraShoppingSul, we have Orla do Guaíba, which is always a highlight. Now we are building Golden Lake, a BRL 4 billion project. We started the first core. The area is practically already urban. It's a closed neighborhood. It's a fantastic neighborhood.
You can imagine that everybody has everything that they need to live in a community, and it is integrated to BarraShoppingSul. The neighborhood, Guaíba, is part. We sold the first core. We sold 40%, and we started with the building and six works of real estate. The project is estimated in BRL 4 billion, and it will be done throughout these years, and we are going to get a great return on investment. This project, its approval is 10 years. It is a very long story.
We are happy that we are changing the house on our Sul looks at itself, and it goes to counterpoint the northern zone of Porto Alegre. A data that I would like to highlight is the issue of using technology, facing our traffic of about 200 million people that go to our malls. 20% of these people go there almost every day. This is a potential that is used by our MIND, M-I-N-D, our digital innovation and marketing program, and we are investing in technology.
This is very useful for the company, and we have good results. The MIND department, so our marketing and digital innovation department, we gather great results. Over 200,000 clients, customers, downloaded Multi, and this year is a total of downloads of 2.2 million since the launch. 2.2 million since launch. Correct. Yes.
What I want to understand is when we talked about technologies, they are disruptive. I would like to say that this did not happen and a great deal of what we saw are based on technology. Every mall has an app. The mall is where people go, they examine, they see the merchandise. It is a little bit romanticized, in my opinion, but the clothing in the shopping mall, the buying on-site is much better than just simply buying at the digital level. Digital is a need.
Sometimes you need to order some pizza. Sometimes you need to order a book. It is almost like a purchase of a commodity. When you talk about restaurants, people complain that if it is not a pizza, the food is not so great when it is delivery.
That search for technology and integration, and the fact that all of our tenants also have their own apps, it has a greater potential because today we have two fronts of communication. Millions of people that go to the mall, and we receive over 2 million people per month, and we can see the products. It is very different. At the same time, today, all the tenants have their app. I would like to say that the building of the mall, the integration of the mall and technology is very streamlined.
We have MultiVocê, which has a program with our clients, and it is present in all the malls. It is a program that is integrated with our app. It has benefits for purchasing and the exchange of points. For example, the shopping mall ads, for example, one night, watching the Escolas de Samba in Rio.
These are some of the benefits. I would say that we are reaching these goals by creating this digital channel that will take us closer to the consumers, and this is much more comfortable for everyone. I would say that nowadays technology is an ally, not a competitor because of the reality that we are observing right now.
E-commerce is also a complement to the usual traditional commerce. Of course, we live in this real world of things and people, and human nature is usually searching for that experience, that interaction. We actually notice that there is this huge demand of people willing to be around other people and in shopping malls, for instance. It is human nature, as I was saying. We do not live completely alone or isolated.
I usually say that it is very nice to see that Carnival feeling of people walking around in the mall and feeling happy and satisfied. Now that we are past that crisis, I also wanted to mention a great innovation. There is this huge medical center at BarraShopping. It is one of the main ones in the world. We have 300,000 appointments per month, and it is very comfortable for people to simply go to the mall and be able to go to the medical center. Now we have created MultiSer.
That would be a center within a mall as well. This was done in partnership with a famous physician, Dr. Augusto Cury, a great physician, and he also has published many self-help books. It is really a mental health center. This has subsidies.
It is within a mall, as I was saying, and it is for psychological help for people. One of our concerns is to offer that kind of possibility to people. We are trying to focus on human minds as well. We noticed that after the pandemic, people have felt a great impact due to the pandemic. We are trying to offer these services at a very affordable price at RibeirãoShopping. It is a pioneering project. It was launched last year in October, and it has been great. We see that there are many insurance plans, healthcare plans that are also taking that into consideration and offering that service to their clients.
We have been recognized by psychiatrists, by psychologists, by other professionals because we are trying to demystify mental health services. In the past, people would think that, oh, if you are going to a psychiatrist, you are crazy or something like that, and it is not the case, we know. It is very important for people to find that kind of professional help.
Mental health is key nowadays, and we hope that is going to be replicated in other malls as well. We have always been innovative, actually. We have created many different types of centers. I remember at MorumbiShopping, around 30 years ago, we created the Gourmet Shopping. That was still a place that was basically in the outskirts of the City of São Paulo. We came up with that idea, and we brought many restaurants to that center, and it brought great results.
We were the first ones to do a multiplex within ParkShopping Brasília as well. It was the first. They only had one cinema, I remember. At the time, our competitors thought that we were going to simply close our doors after one year, but we received over 1 million people in the first year. It is still ongoing. Our company is always trying to look ahead and think about the future, and we are sensitive to the new demands of society.
We know that ParkJacarepaguá, for instance, that we opened, is a mall that generates a great cost reduction in terms of condominium charges. We were able to reduce 20% of the electricity charges. We have our own water and sewage treatment station, so that also reduces the amount of water that is used.
We are reusing rainwater, so that reinforces a great positive impact that we want to have in terms of environment, in terms of nature resources. We also created a few open places. It is more of an open mall. It is one of the most beautiful shopping malls in Brazil, and we integrated all that. We were still building during the pandemic.
The company did not stop, continued to invest, and we opened in November last year, and it has been great. It is a mall that is going to help that whole region of the city that had been forgotten. Now we also created a few bridges, a few road improvements around the mall and in the neighborhood as a whole, so that it is going to be easier for people to access the shopping mall.
I just wanted to highlight that the mall has that ability to really bring more life, refresh a place, a city, a neighborhood. In that region right now in Rio de Janeiro, people can tell, people who live in Jacarepaguá, they can feel safer now in that place, and they are happier. There is this great news that they have to refresh the neighborhood a little bit.
All of our shopping malls also have that role, play that role. I wanted to thank you all. Keep in mind that ParkJacarepaguá has generated a lot of employment, many jobs, both direct and indirect. That is very important, especially right now in Brazil, given the context. We truly believe in Brazil, and we will continue to invest here. Thank you very much.
Thank you very much. Now we will start the Q&A session for investors and analysts. Should you have any question, please type asterisk one. If your question has been answered, you can exit by typing star or asterisk two. We will answer the questions in the order that they appear. Please speak over the phone when you are asking a question. Please wait while we are gathering the questions. First question is from Pedro Hajnal, Credit Suisse.
Hello, good morning, everyone. Thank you for the presentation. Congratulations for the results. On my side, I wanted to understand a little bit more in terms of innovation. I think that it is going to rise a little bit, but I wanted to know if that threshold that we saw for the first quarter is something that should normalize. There is still a little bit more space for occupancy costs that was going to increase. We apologize. Also, if you can give us more details with the portfolio where you see more results per region, per asset maybe, of increasing rent and looking at the portfolio as a whole.
Le t me answer the question. The first quarter is the most difficult quarter, but now we are going to get into the most favorable, a more favorable quarter. You have May, June, you have Mother's Day, you have Valentine's. We have that trend that will continue. Our curve of sales always had this quarter, a quarter that is very productive for wholesale. Now, the issue of occupancy cost. Remember that there were changes, reductions that will be in force for a long time.
Improvements, common costs, infrastructure, that will be a benefit here allied to the most important point, which is that expectation of growth of sales, 32% of growth, 13% in the first quarter. This trend will continue. You can see that we're growing. We're growing five, 10, 15, April 2. If we continue this way, I believe that the result will be very good.
Another point is the issue of several of our condominiums, our shopping malls, they didn't have an increase, a real nominal increase for years and years on these condominium charges. This inflation that is ravishing the world, it's impossible to keep the same condominium cost because you have malls that four or five years we didn't do any readjustment, so it's natural that you have changes.
Another point is that we still have an open area that is larger than the past and with a higher turnover than what you've seen. You have people, tenants that are preparing their stores. You don't pay for rent during that preparation period. We have 24,000 sq m of area, and there's still the potential for growth increase besides the increase of the natural productivity of the mall. Is that okay?
Thank you, Dr. Peres.
Thank you. Next question. Pedro Lobato, Bradesco BBI.
Hello, everyone. Thank you for the presentation and for the opportunity to ask a question. I have two. First, the indebtedness that had a drop that is very expressive. I wanted to understand if you come up from a threshold of 2.4 and the EBITDA healthier, that indicator should be reduced all throughout the year. Second one, Golden Lake, you said that we had 40% sale in the private area. I wanted to know how the next phases are doing. Is the sale of the phase I will be a trigger for the next ones? That's it.
Pedro, Armando here, hello. Thank you for your question. In regards to indebtedness, we did a management of liabilities last year, that is, especially the fourth quarter, and we have an economy that is higher than the financial expenses this year.
Preparing ourselves for an interest rate that is higher, we expected that, and therefore, we could reduce the spread that we paid on the Selic rate and this is the lowest spread that we've had since 2018, maybe comparing even 2017, 2016 over the inflation rate, Selic, and the strong operational result allowed for this quicker leverage. You can see the EBITDA numbers, 2.43 in this quarter.
The expectation as a company is that we will continue down this trend over these next quarters, and this is great because we lived a higher leveraging due to the discounts that was already mentioned during the pandemic, closing during this period. That led to an indebtedness that was higher than planned, and now we're going back to normal, and we have a capital structure that is stronger, that in a lot of space to execute our strategy for growth and returning the money to the investors or even buying the shares again.
We had millions of shares bought once again this quarter. Now, Dr. Peres is preparing the six phases. What we are creating is the culture. I'm going to explain. These, how many years? Over 50 years in the real estate business. The DNA of the company is real estate.
At a certain moment, we did investments and projects of shopping malls, and there was a new important activity, not only for Brazil, but the world. Commerce started to develop, and today, if it was not the shopping mall, if we just had the street commerce, people would not be able to buy. We have our urbanism project, it is not simply to be a parking lot.
The urban chaos, this led people to go to the mall. What do we want? It is almost a private neighborhood. It is a neighborhood that is bringing safety, comfort. I am not going to talk about all the benefits, but we started here through the most difficult project, which is the high-end apartments. We have over 40% sale in this crisis, and this is great. We have the demands that the real estate agents say for the 180, 200 sq m apartment.
We sell them even at 500 sq m in Porto Alegre. But for a more average intermediate range, it is an incredible demand. We will briefly launch another product. The sales are more accelerated, and it has more depth. In the end, this is replicating simply Golden Green. All the apartments facing the ocean, it is always difficult sales.
But after that, with the smaller apartments, it is a great demand. The number of people that need this type of things is higher, and they are not so much affected by economic and political crisis. These are people that need to change their lives for the better. It is a fantastic environment. In Rio de Janeiro, we have Golden Lake. Porto Alegre has 1.7 million inhabitants.
We need to understand that our strategy of always striving for the best is to establish a quality program for all enterprises. But the company is doing it with care. We sell and we build. We sell and we build. This is a two, three-year project. This is actually a 10-year project. But it will be done as we done the things here in Rio de Janeiro. It is a new project in Brazil. Is it answered?
Clearly.
Thank you. Our next question is Andre Mazini, Citi.
Hello, Dr. Peres, Armando. The first question is, the follow-ups, we have managed to get a few permanent economies, and I think you adopted the Scrum agile. If you can comment a little bit of what is going to be permanent in a post-COVID, what really changed in terms of processes in the shared services center? This is lower.
This is higher. The occupancy is higher with the rent, as we can see in the numbers. The second question is in May, we see that we are going to have an M&A in the industry, very big, and if you can talk about the M&A strategy. Yes, last year, you did an M&A in assets. You bought a few assets. Do you have any representative M&A? There is the northeastern portfolio. We have it in the south, in Santa Catarina. Is the company considering the M&A at the company level, and a portfolio not only at the level of the asset, since M&A will come back to Brazil, and we are going to have a big one here.
Andre. The company examined these possibilities. They are always with us. But our decision, the company has, at the moment, 20 shopping malls. Critical company shopping mall that we have, RibeirãoShopping. A few critical, but the other ones are very good. We really work with quality, essentially quality. Sometimes, certain M&As that involve the shopping malls that have a great weight, we avoid because when you have to take care of problems, you forget about quality.
Our idea is to be conservative, and this is very good that there is a higher competition. But the company will continue to develop its projects, doing its malls, and the important thing is to have quality. We do not lose when there is quality, but quantity not always represents a gain. The company has a lot of problems still to solve. Our condition is to do projects and to be associated with companies that have a similar profile to ours.
We suffer less in the crisis because these are shopping malls that sell well, good quality malls. We continue to invest, improving, so the company did not stop in that period. Our concern is quality before everything. Quantity is good, but quality is king. That's our strategy.
Andre, answering the first question, just to complement the M&A, a very important point for us is capital allocation. It's not growth. Growth, yeah, we have more shopping malls or sales that are higher. Here we're talking about value generation. Growing commercially, being stronger commercially, we have better points, as Dr. Peres has said, improving quality is not having more points of sales, but quality. Capital allocation today is very easy to buy, but it will give a low return on investment. We have to pay attention.
You've seen the company in certain years being more active in buying participation and minority small businesses. But there were a few businesses that do not work, and it's not the desired capital allocation that is best for the company and the shareholders. These are the two complementary points that I would like to mention.
There is another point. We are a company that has a command. We have our Board of Directors, but it has a command. If you lose control of a company, you many times have difficulty managing it, which is when people think different. Since we are a pioneer in shopping malls, the first shopping mall was in São Paulo, Shopping Ibirapuera. We've been in this for over 50 years. We know that the location and quality are key.
We are very strong in the southeastern region, which represents over 60% of the GDP of the country of Brazil. We have one shopping mall in the northeast, which is a partnership with Aliansce, and in the southern region, center west region. But we try to focus on regions where we can extract better results. That has been our strategy.
In regards to the occupancy costs in numbers, I will try to highlight and organize this somehow. All the issue of digital innovation, and this comes from Multiplan, a lot of this stems from the projects with IT, and others are developed through the mall. The use of technology, agile methodologies, but they bring results. For example, payment of parking lot. This not only brings data, but it has economies for us.
The issue of having artificial intelligence, answering questions, and having less people in the structure of the shopping mall. What is the time of opening, closing? Today, all of our malls, through our website, we have the apps access to what we call One Point. We have one shopping mall. One of our shopping malls that represents the invoicing that is higher than half of the shopping malls in Brazil. The companies do not have an invoicing, but we have one shopping mall that covers all this. BarraShopping that invoices almost BRL 2 billion as a revenue of almost BRL 300 million and receives 25 million people per year.
What I want to show you is that the strength of the company is focused on these five first malls that were the first five that we did that are 40-year-olds, and that grew, and that expanded, that were fixed, and they created cities all around it. In Belo Horizonte, we did a shopping mall, BR-040, that didn't have anything. Today, the most important neighborhood is there. You're talking about a point that is very important, but I want to point to a data, BarraShopping.
The revenue for allocation, it grew 47%, and BH Shopping grew 69%. We did a participation in BH Shopping showing the strength in these enterprises. Our shopping malls, they represent a great deal of our influencing. But to finish what said, there is another point that is very relevant. We talked about ESG, the social, governmental, and environmental themes.
We have a common theme, which is the investment that you do that has a very positive impact on the environment, but also has a strong reduction. For example, ParkJacarepaguá, it's a more modern shopping mall, but it has the condominium costs that are very high. Several of our enterprises, we have investments that are very positive for ESG and more than that. It has the economic sustainability of reducing the condominium costs. I'm going to stop since there are more questions. Should you have any more questions, you can talk to us.
Thank you. Very clear.
The next question comes from Ygor Altero, XP.
Hello. Congratulations on the results. Two questions. First, the Golden Lake that you already mentioned that has a very favorable dynamic. Now, I wanted to understand on the side of profitability, how do you see the gross margin projected given this high inflation challenging scenario? That would be the first question, then we come back and answer the other one.
Ygor. You're going to wait for the answer of the first to do the second one?
Okay.
Ygor, the margin is 27.8%. Remember that as Dr. Peres said, we are creating a new brand, a new neighborhood. Obviously this first infrastructure, urbanization. This is a project that Marcello has talked about, that we decided to use the capacity of the company as a building company. We're doing with our own team as we've done in other malls. What we understand is a new concept here in Porto Alegre, a new area, and you're doing the whole infrastructure necessary.
We are already anticipating, obviously this has a big impact, and we have a gross margin of 27.8%. We see that you had a rhythm of sales that is very strong in April. To understand if this performance, it should be translated into higher rent in the second quarter. Does that make sense? Ygor, I said 27.8% margin, 27.7% to be precise.
In regards to sales, if you look at the previous quarters, we talked about the sustainability occupancy costs. It was a big concern of the analyst. These higher sales, and Dr. Peres already talked about the growth of January, February, still very high and with sustainability. It's important to have a balance in the long term.
Another factor that we have to consider is that these sales, they occur with a growth of 32% over the 25 days of April, with a higher vacancy, 200 stores below what we had. This shows productivity. It's a display of the macroeconomy, but also shows the quality of our enterprises. The new stores, the new mix that is being implemented in our portfolio, a day-to-day work that the shopping mall needs, and this is a change that is continuous.
The priority changes every quarter. I confess that these numbers are important, and it shows what the options are. This is very different from a couple of years ago. So it allows us to refine and bring this productivity not only in this quarter but in the previous quarter. In 10 years, the company is listed since 2017. It's been 15 years.
You have 15 years of data detailed, available, and you have that productivity that is continuous, that the company is presenting quarter by quarter, with the exception when we were closed because of the pandemic. Regardless of that, we had a growth in the semester.
Thank you, Armando. Now remember, rent is a consequence. If you have higher sales, you are going to be able to charge for rent. Rent is sustainable. So there are places that say the rent is zero. Rent is a consequence of all this work. Quality management, placement, management is fundamental. We are not just owners of the shopping mall. We manage the shopping mall, and it brings a lot of value. We can see that the events are here in our mall. As our head of manager, it really brings a lot of difference because of productivity. That's why we like to work with the shopping mall in the hands-on, so we can improve value.
Thank you.
Our next question is from Elvis Credendio, BTG Pactual.
Good morning, Peres, Armando. I have two questions. First direct is about the occupancy rate. I wanted to see how you see the pipeline of negotiation for, well, if you can tell us a little bit of the expectation of the occupancy rate, and the second point is regarding the expansions. If you can comment on the appetite of the company for new appetites.
The company is developing the expansions, Golden Lake, but I wanted to understand if this is the moment that is ideal to celebrate the growth, given that the portfolio is performing very well, but we see that there is a more fragile economy due to the economic policies of the next candidates for the presidency. I wanted to see how you see the scenario for growth.
Elvis, we have 200,000 sq m for expansion. We have projects that are ready for MorumbiShopping, projects that are ready for ParkShoppingBarigüi, São Caetano, JundiaíShopping, BarraShoppingSul. We are waiting for opportunities. Now it is evident that this is a difficult year. The big concern of the company is not to have a high debt rate at the moment that the interest rates are growing much higher.
We are careful at this moment. We have to analyze the following. If we had to work with capital markets, the company is being sold for half of what we are really worth. It is not worth capturing those resources for us. It is not a great deal because it is half of what the company is worth.
If I get five of our malls, I will tell you that we will reach the fair value of these malls, which is the total value of the companies. We have 20 total malls and other values. We are being undervalued. Also the thing that e-commerce, they forgot that not everything in life is digital. People like to meet each other. Look at Carnival, for example.
Our life is not in four walls. You mean self-confinement for two years. I had COVID, and I continued to work, but what I am trying to say is the following. We see a great opportunity when the company retracts, when the market retracts, we always grow in crisis. I have been through so many crises. Every single kind of crisis. The first enterprise that I did in my life, 1963, still a student. There was a great social and political mobilization.
Everybody was saying, "This guy is nuts. Nobody is going to buy anything." Food, provisions, everybody was scared. It is a scenario that is similar with the polarization of the current elections. I launched, and I sold the whole thing. I had to pay 36 installments. This is just to pay for the terrain that I bought. To sell it in the six months, if I did not sell it, I would be broke by the age of 20.
It worked. We are here today with the joyfulness of working and doing innovation projects, creating solutions that the world looks at us. For example, a medical center that we have in BarraShopping. We have a high number of clinics and physicians, and nobody wants to leave BarraShopping. The consumer is used to going to the physician at the shopping mall. It is something that is easy.
Also, we are thinking about pain and pleasure in a way. Medicine has to do with pain. Nobody likes going to a physician. Nobody really likes going for an X-ray or anything. It is about pain in a way. People are just postponing all that. We make it easier for them. Whenever it is easier and more comfortable, people go to a clinic, go to a hospital, go to a center happily. That is what it is about.
Ladies and gentlemen, please wait. We are trying to reconnect. We are back. Can you hear us? Just double-checking.
Okay. I am sorry about that. We had an issue here. We are using a backup line, so hopefully this is going to work well. Anyway, as we were saying, it is important to have that connection, and we are now looking at the demand that we are going to have in terms of tenants and also in terms of productivity and return that that is going to have. Of course, that is going to have a higher cost, financial expenses, but we are thinking long-term.
As for occupancy rate, we are not going to give you a prognosis right now because we do not have a goal of 96% or 97% or anything like that. What we do have is this concern that we want to have the best opportunities. We are trying to bring the best opportunities, maybe not with the highest rent, but we are trying to find this balance between the right rent and the operations that the mall is going to have, how that is going to contribute with the mix.
We are not just looking at simply doing anything just to get that rent. We also want to make sure that it is not just about the occupancy rate. Oh, we want to get to 98%, for instance. No, we want to have the right mix. We want to have the right operations for the company. Okay?
Excellent, Armando. Thank you very much.
Thank you.
Okay. Our next question is from Jorel Guilloty, Goldman Sachs.
Hello, everyone. Thank you for the opportunity to ask you a few questions. First of all, I wanted to know more about the tenants. You were talking about the number, and I think that has increased lately. I know you are also focused on quality, you are focused on improving the mix, of course, and I wanted to understand a little bit more about the mix, per se. Do you want to look at maybe more appliances or clothing? Also I wanted to know what you think about the ideal mix in the medium term for Multiplan. Also, there is this other question here about the Multi app.
We understand that there is a lot of engagement about it, a lot of people using the app. Do you think that would be kind of a condominium service as well for tenants, or do you see that mostly as a service that you may be able to monetize in the future? I do not know, maybe using that kind of information, that kind of data that you are going to collect. How do you see that in the future? Basically, that is it.
Thank you for that question. Well, in terms of tenants, I think that we may look at the different quarters. For this quarter, for instance, we are thinking about office supply, and we know that that was reduced a little bit, and apparel or clothing gained a little bit of momentum. But that happened the other way around in the previous quarter. So really, it is something that takes a while. It is really a negotiation.
It takes a few times, a whole year, to discuss a contract with a tenant and change that mix. That picture that we have, that snapshot that we have in a certain quarter, is not to be used as a trend for the long term. It is really just a snapshot of that time, that moment. We should be looking at around 10 years to see the trends. I don't think there is this ideal mix, because we're always trying to improve and see how to evolve and how to offer people better services.
We're always trying to change the mix. We're always looking at what's new, and many times, just like the medical center, and Dr. Peres mentioned that a few times, or MultiSer, for instance, the mental health facility, this is looking into the future, I think. It's about innovating. It's about thinking about the real demands of society. We're always going to be implementing that kind of change. I think the ideal mix doesn't really exist. We're always looking to improve even further.
Yes. I think the ideal mix, if you allow me to add to that, is something that is going to bring more satisfaction to people. They will feel safer or more comfortable with that. That's the idea. What we try to offer people is a place where they're going to have the most satisfaction, pleasure, really. That also has to do with health. Healthcare is very important. It's as important as buying clothing. I don't know. Or a shirt. Let's say that you're going to buy a BRL 40 shirt, and that's going to be the same price as the appointment, for instance, because of the subsidies. Let's say it's around BRL 130.
There's going to be this possibility to go for an appointment at the mall. That's much better. That's much easier for people. Everyone needs help, mental health help. I think that the human mind is really a mystery, and we need to think about those needs. There are many people suffering the impacts of mental health. The rate of suicide has increased.
Maybe if the person can go to the mall and seek mental health professionals' help, we might be able to reduce that risk. We have to think about the right evolution of shopping malls depending on what human beings need, and that's something that's in constant change. It's constantly evolving.
You have to imagine that you have a device in your hand. You talk to somebody in Japan in real time. This really changed the behavior of people. It created a dependency, psychological dependency, depending on the psychiatrist. They say that the cellphone has such a hold on people that if somebody loses their cellphone, in six hours, it seems like they're a drug addict. If you lost your cellphone and you didn't find it, can you imagine? Some people think that they lost their lives.
It is a total madness, and we are working. The pandemic has brought a lot of problems, psychological problems, severe problems. People were traumatized, and I think it was a bit exaggerated. People were very scared. Today, we understand that this is pioneer. If you want to treat people, we have to treat people for emotional problems. Everybody has problems.
Everybody does. We have to understand, our work is to anticipate what is a trend, everything that is in demand, and what the shopping mall can offer. We do not just offer products and merchandise. The great deal with our shopping malls is services, and we are going to have a broadening of these services. Our work is to understand what people want, what people feel, and to place ourselves into what would be good for them.
What is good for me is good for people. Multiplan has the-- we want to deliver more than what people expect. Jorel, in regards to Multi, I am just going to anticipate here. Our choice in the digital strategy path was not to sell products that you might have a monetization, immediate monetization, and a take rate. Our strategy was always of a reinforcement over the last months.
It is more for a value generation for our main clients, the consumer and the tenant. We see the richness of data that are great for improving our management to bring more subsidies for our managers in terms of a mix, which is what you asked before, of placement of the stores and helping in the management of selling more stores. For example, we have the week of the consumer and 10% of the tenants took part on on-site activities.
This is part of our strategy, which is not demanding the tenant or charging the tenant for that, but just generating a different experience, additional value from this experience. We have the creation of the data lake that we have for the consumer to be convenient. They get into the app, they do the demand. They can schedule going to the cinema.
They can schedule buying something at the drugstore. It can be monetized, yes. There are many ways that we can monetize, but this is not the time. The time is to invest and generate value. This is what we think.
Very good.
Next question is from Fanny Oreng, Santander.
Thank you for the question. Good morning. Congratulations on the results. Actually, all my questions were already answered, but I just wanted to go back to the issue of M&A in regards to the bargaining power with the wholesale. Along with brMalls, we are going to have a moment where you are going to be very big in regards to wholesale, and there might be an overlap. Is this a factor for concern for you to lose the bargaining power with the wholesales, which is very different because of the productivity of the assets? I just wanted to understand if this is a concern for you or not, or business as usual for you.
Let me try and answer. It is not a cause for concern. Our concern is clearly to make the company more profitable. The amount of shopping malls does not attract the good stores that they want transit. You want people to buy a lot. It is clear that all of this is a set of factors. We offer a lot of services, and the wholesale companies, they know that they have to talk to us. The brands have to talk to us, to Iguatemi, and we have good quality. What I can tell you is the following. We will continue to grow vertically, which means that our shopping malls will expand and will bring a lot of a return of investment.
But since we are a full service company, we have engineering, we have architecture, we have the lawyers, we have an infrastructure that is real estate, that stems from real estate. For enterprises, we created the shopping malls. So every single time that there is a possibility, and the terrains that we bought years and years ago, they are very low.
So now we have for many, many years, we have even bought some farms, and we bought the terrain years and years later. The terrain was worth 3,000 x more. So the valuation that is around the shopping mall is exponential, and this is an asset that is not demonstrated here. But we know that there is a potential, but it depends on our will, on depending on what.
The real estate market in the situation that we are living, it always welcomes investments all throughout the year. Sometimes people purchase real estate, afraid of inflation. They do not buy because tomorrow will be more expensive. So a little bit of inflation is normal. It creates market all around it. Today, we have another problem. We have a demand where people were staying at home for two years. They have money, and they have not used it, and life goes on.
When you get something, you want to buy a car, we do not have it. So nowadays, you have an inflation generated because the offering of services and goods dropped significantly. We produce less. On the other hand, people want to buy and they do not have a product, and there is still an inflation that creates the bottleneck.
If today I do not buy, tomorrow will be worse. If I do not buy it now, tomorrow I will not have the product. So you have two factors that really work with inflation. It is where the offering does not correspond to the demand. If you want to buy a car, I just build a building there, it was very successful. The director said, "But we have to buy used cars." United States, they do not have new cars for sale.
The used car is more expensive than the new. So we are living this consequence of the pandemic. There was a pandemonium in the world, and now we are paying the price. The world is paying a price. But our company has gone through so many situations and crisis, and we managed to adapt. I think we are still going to grow here. There is a school.
People work in the company that get in and never leave. You have people here working for long years. It is good because we do not treat people as a machine. We treat them as a human being. Feeling is our main. Heart is our main weapon here. I do not know if I answered your question.
Thank you, Mr. Peres.
Thank you. Since we do not have any more questions, I would like to give the floor to Mr. José Isaac Peres to close our session.
I would like to thank you all for having the patience to hear us. I would like to apologize for going over the time. I hope that we answered correctly, and we thank you for your time, and we hope to see you in the next quarter with better results. Thank you.