Good morning. Welcome everyone to Multiplan's third quarter 2019 earnings conference call. Today with us, we have Mr. José Isaac Peres, CEO. Mr. Armando d'Almeida Neto, CFO and IRO. Mr. Marcello Barnes, CIO. Mr. Hans Melchers, IR and Planning Director. And Mr. Franco Carrion, IR Manager. Today's live webcast and presentation may be accessed through Multiplan's website at ir.multiplan.com.br. We would like to inform you that this event is recorded, and all participants will be in listen-only mode during the company's presentation. After Multiplan's remarks, there will be a question-and-answer session. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero two to reach the operator. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Multiplan management and on information currently available to the company.
They involve risks and uncertainties because they relate to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that conditions related to the macroeconomic scenario, industry, and other factors could also cause results to differ materially from those expressed in such forward-looking statements. This conference call will last 60 minutes. After this time, the investor relations team will be available for any questions which have not been answered. Now I turn the conference over to Mr. José Isaac Peres, CEO, who will begin the presentation. Mr. Peres, good morning. Thank you for the opportunity. You can begin the conference.
Good morning, all. All of you who are listening to us, thank you for your patience, for being with us. I'll try to be to-the-point, very straightforward today. Mentioning just a couple of facts from the past that allow us to work on projections about the future and then focus more strongly on the future, what we have ahead. For the last 10 years, we've been through a difficult phase in the country. I revisited a note I had that 10 years ago, BRL 534 million was the company's revenue. Today, we estimate revenues of BRL 1.450 billion. So in the past, for the last 10 years, which were tough really, we increased on average 17% in terms of the company's revenues. We have many projects at the company level.
We have 1 million square meters of projects in fully paid property owned by the company, but I'll be very objective now. What do we foresee for the next three years? I'm not going to work on long-term projections, though. Being more conservative, considering that the economy is improving. We are feeling this already. In October, for instance, we project between 8% and 9% growth according to the first data we got, allowing us to project sales forecast around this order. We had been growing about 5%, along those lines, but we already begin to see some signs of an upturn, an acceleration of the company. I can see tenants more optimistic, and I think that that depression scenario is finally coming to an end. We haven't reached euphoria, but at least we can start smiling now.
Barigui, for instance, we're expected to work on an expansion, another 15,000 meters, and also Jundiaí. Barigui will turn out to be maybe the greatest shopping center in Paraná State. Sales are really high, close to BRL 1 billion sales approximately. I'm speaking some data here, but Armando and our colleagues that are here with us, they can correct me if I'm wrong. JundiaíShopping, we also have an expansion pretty much targeted to nature. It is our model design that we have included right now. It's the tripod: nature, entertainment and sales, pretty much supported by something that is millennial and naturally never ends. We increasingly coming back to thousands of years ago, in which mankind always needed to include pleasure in its life. Entertainment is also another source of joy. We don't have a circus podium in the mall, but we're getting close to it. MorumbiShopping is another one.
We also have an expansion for the next three years. It's in our pipeline. São Caetano, São Paulo is another one, another 10,000 sq m. Jacarepaguá, we expect to close next year. So, 83,000 sq m in total. This does not include an icon project we have in Rio, which is the integration of BarraShopping with VillageMall. They're very close to one another, and therefore, we managed to design a project with a lot of playful impact. Maybe it will turn out to be an icon in Brazil, and a monorail connecting both. A total distance of approximately 1 kilometer in three minutes , taking 80 passengers in a car with air conditioning. It's something unique. We know these playful things are really helpful, and they also help because they are synergistic. Whenever we put two attraction hubs together, the summation is always greater than two separate parts.
In BarraShopping, another example, when we connected New York City Center to BarraShopping, it's amazing to see how much they grew after the integration. Also, because they add to one another. One shopping center is more focused on leisure, the other more on sales. Now we have a high-end shopping mall. We really have an increase in people flow. Sales are also improving a lot. Once we put them all together, there will be more convenience to consumers. Just 3 minutes to cover a long distance without having to get into a car to move from one to another. Maybe 400 meters, that's the distance, but if you consider all the streets, it's almost 1,000 meters. We're going to work on this project of the monorail. It's an icon. I'm very confident that there will be a huge impact for both ventures, for both projects.
Another one, if you consider the company's organic growth. If we go back to it has been growing for the last 10 years on average 17%. That's our projection. For the last 10 years, they were the toughest of all years. We still have a project in São Paulo, which has been developed for a while now. It's about to be concluded. It's Parque Global. It's a shopping center. I mean, it's a park in São Paulo, close to the Marginal Pinheiros, 50,000 sq m, also integrating an urban planning project. It's one of the most significant designs in São Paulo. Parque Global will have 50,000 meters GLA, and our stake is 60%. I would also like to talk about real estate now. When we raised that question about the termination, which was something so different, once again, we had justice involved, and many companies lost a lot of money.
Others went bankrupt. The real estate sector was extremely weak. When faced to that scenario, we limited our action in real estate. Even though we had pretty good areas and projects and designs. But now we will go back to that segment. So much so there is a decisive factor to the real estate business, which is interest rate. Interest rates, by the way, are very competitive, and they're allowing people to buy a property, perhaps paying installments equivalent to the rent fee, the rent rate. I have over 50 year experience in that area, and it's very attractive to consumers and buyers, giving them the feeling of being assured. They feel assured. It's reassuring. So we have 1 million square meters, and we selected, for instance, for the next five years. Those projects in design with a higher potential and higher liquidity as well.
From 1 million, we estimate to have 300,000 square meters. So I have an extremely low price, BRL 9,000 per square meter. It expected to be more. But I don't want to have too optimistic projections. So you always see the company as a company that delivers over the promise. So that's how we manage the company. We want to surprise everyone. So we believe that under these conditions, we're going to have BRL 2.7 billion sales, which might generate, well, an estimated margin of 20%. And now let me make a remark here, because our real estate projects, our previous ones at the company will have a margin over 30%. As you can see, I'm being pessimistic here because I don't want you to tell me tomorrow that I failed to deliver my promise. So it's expected to be more, and if it comes, it will come from heaven.
But if we add it all together, we have a company which today is at BRL 7 billion assessed or valuated by the stock exchange. And if you do the math, the total revenue of the company or part of our asset is still in the hands of investors, particularly pension funds, minority holders. But this accounts-- well, we have BRL 1.4 billion and the total is BRL 1.8 billion. That's the total of the income of our shopping mall. That's an estimate, pretty close to that number. And I did the math, net of 6% rate, just to give an idea of the value of our assets. Today, in order to generate this income, nominally speaking, we would have BRL 30 billion. We would need capital of BRL 30 million if there was an income, for instance, of 6%.
So, we would need BRL 30 billion to deliver the same income we already deliver today. And our company is assessed at BRL 17 billion. I think it's also important to take into account, what do I mean by income? I'm speaking of real, actual income because our assets are adjusted. So 6% as real income is something amazing. There is no other investment today delivering the same. So I believe the company is doing a good job. Possibly this year, we're going to deliver good results. And I'm also confident that this year, well, or in previous years, I guess for the last five years, we invested BRL 2.5 billion. Am I right, Armando? Right, BRL 2.5 billion, including shopping mall maintenance, turning shopping malls more attractive with further expansions, et cetera. So it's also important to let you know that we are investing very heavily in IT.
My strategy is to provide tenants both a brick-and-mortar store and an online store. So if they rent a store, they get the other one for free, absolutely for free, because we're not going to charge anything. We're not going to charge any percentage for the online store. We are investing in order to turn service to our customers and consumers more convenient, and to give more strength and power to our tenants. We are not an e-commerce company. We are a shopping center company, which is a different product, with the best and prime locations in the main cities in Brazil. Therefore, when we say that BarraShopping, for instance, gets 30 million people per year, it's just amazing. People who come and go in our mall, approximately 180 million people, nearly the whole Brazil getting to our shopping malls.
What's the idea? Possibly next year, we'll begin to deploy the system. The pilot system is BarraShopping, is one of our designs, allowing us for one hour to deliver consumers in a radius of one hour, more than 2 million people. People know who is sponsoring e-commerce, which is Multiplan. It gives some credibility. There is no risk. Anything that happens, they can come to Multiplan will be in charge. On the other hand, we're going to provide consumers with an option or the right to go for different prices of apparel, footwear, sandwiches, with several alternatives, several different retailers that are selling these products with their corresponding prices, with a faster purchasing process for consumers. Consumers may buy, and the product may be delivered within one hour, or they can buy and go to the mall. I believe this thing about going to the shopping mall versus e-commerce.
I think I said that before, but I think it's always worth highlighting it again. We live in the real world. We don't live in the digital world. People live with people. People live with things. IT is quite a key tool in order to provide convenience and make people's lives easier, but that's something that it's not convenient at. Steve Jobs was a genius when he designed the iPhone. The strongest of all fears of mankind is loneliness. With a mobile phone, we have the feeling that we have 150 friends. Some people say they have 300 friends, but you know that good friends are just in the palm of one hand. That's the fad today, right? This feeling of people of not being alone because they can see an image, they can listen.
You can be in the middle of the Amazon region, but you don't feel lonely because you can talk to someone via mobile, which is good. Providing information is good. But naturally, at the same time, mobile technology made people more lonely. I know it sounds like a paradox. At first, there was the feeling that people were not alone, but now people are more alone at home at their computers, their iPhone. Shopping malls are growing. The flow is growing. Armando can show you the figures. Firstly, because we're also an island in a chaotic urban system. If it weren't for shopping centers, retail would have stopped growing a long time ago. Secondly, people like to count on people. Think about it. The greatest organ of the human body is the skin. You need contact, and mobile phone is not going to give you that contact.
Our sales have been growing. We are working on this. We're working on IT. I don't expect it to increase sales once it's deployed over 10% or 15%, but if that happens, it will be great. So we are constantly being adapted to different times, conditions, anticipating consumers' demands for the future, consumers' desires. We are bringing a new project model pretty close to Canoas, which is a shopping center that has been growing on a monthly basis, on a year basis, around 23%. This year, sales increased by 21%. Jacarepaguá is an important area, an important consumer area with about 600,000 people. They did not have this kind of equipment. Next year, I believe we are going to give a gift to Jacarepaguá area. This project will give you a new perception of what our model is all about, our business model, our current business model.
I thank you all, and I really thank you for your trust, and rest assured that we have a very skilled team. If one day I am not here, rest assured the company will survive well. Thank you.
Thank you, Dr. Peres, and good morning, all. You will stick to us for a long time. I hope so. Just some brief comments. First, with regards to operations, in addition to the highlights already mentioned by Dr. Peres, I draw your attention to Canoas' sales performance. Like he said, this quarter increased by 22.9% this quarter and 21.2% in the first nine months of the year. JundiaíShopping and VillageMall of a younger generation in 2012, they faced tough years of consolidation owing to the economic scenario, but posted sales growth this quarter and full year above 10%. Sales growth stems not only from the gradual economic upturn, but also from the proactive change in stores, which totaled 44,000 sq m of turnover in the last 12 months. More than 300 stores changed in the quarter that ended September.
In addition to rent in Jacarepaguá and expansions over the quarter. Rental revenue increased very strongly by 8.9%. There were several factors involved. Firstly, the acquisition of a 20% stake of BH Shopping in the second quarter of this year. In addition to the onlending of inflation and also two highlights, which is growth of 10.3% MorumbiShopping and BarraShopping, 8.8%. I would attribute this strong performance to the change in the mix. We already discussed in several calls the change in mix and opportunities of stores which left, and the improved mix given good results in our rental revenue, which is our main revenue. Several of our properties. We had 10 properties posting above 2% revenue growth, two-digit revenue growth. More specifically, once again, I would draw your attention to ParkShopping Canoas, which will complete the second year of operation on November 23rd.
Rental revenue increased 14% this quarter and 19.9%, or nearly 20%, in the first nine months of the year. Still about rent. This time, same-store rent a robust increase of 10.8% and real growth of 3.1%, which is the highest growth rates on a nominal and a real base of the last five years. When we speak of results, and now changing gears, I would like to highlight the effect of mark-to-market of our shares owing to the rise in the appreciation of stores, which had an impact on the third quarter, an impact on the result. Despite of that, did not prevent both EBITDA and FFO and NOI to grow again. I am not going to repeat the numbers. They are all on the slides. Lastly, the capital structure.
This quarter, we had a new financing, precisely with Jacarepaguá, 350 million BRL, 15 years of amortization after the grace period. A rate not tagged to TR, but rather to CDI at 105.85% CDI. Net debt is 2.4 times EBITDA of the last 12 months, a small drop vis-à-vis the previous quarter, at a cost of 6.59% per year. The debt index to CDI amounts to 71% of the gross debt and is expected to be growing owing to TR financing, which are amortized on a monthly basis and further benefiting possible new cut down on the base interest rates. I will end up here. Thank you very much for your attention, and let us begin the Q&A session. Thank you very much.
Good day. Right now, we are going to open a Q&A session. If you want to ask questions, please press star nine on your touchtone phone. We already have some questions coming in, so let us begin with Mr. Victor Tapia with Bradesco. Victor, good morning.
Good morning, everyone. My first question, could you give us more color about Parque Global? What about the CapEx? Considering the CapEx that were allocated in new projects this quarter, approximately 35 million BRL, how much was earmarked to Parque Global? Maybe more color about the timeline of the project. My second question, we noticed that revenue is gaining momentum, increasing more compared to previous quarters. However, when you focus more specifically on parking lot revenue, there was a drop. Flow is still increasing around 4% year-on-year. That's about it. However, what about the future? Do you think there is room to further increase and have more price adjustments? Or do you believe this revenue of parking lot will depend on higher flow and average time in the parking lot? Thank you.
Victor, José Isaac Peres speaking. Let me answer your question. Parque Global is a project which naturally includes an integrator urban design, maybe one of the most significant projects and designs ever worked in São Paulo. It will be something similar to a new business hub. It's a long-term project. The project that we approved was submitted to changes because there were problems, legal problems related to the property, and they were just overcome. So now we revisited the design to be more in concert with the current times and within our philosophy of heavily investing in entertainment, nature, and sales. So this design is just about to be concluded. So we do not have a thorough budget yet.
But certainly, it will be in progress next year. That's our forecast. I cannot give you further information right now. The total area is 50,000 sq m. I think there is still room for growth, which is also significant. But as you know, we go step by step. As demand comes, we expand, et cetera. As for parking lot revenue, it is growing. Growing little, but it's still growing. What happens today, naturally, is that municipalities and towns are beginning to understand that with a more efficient transportation system, particularly Uber and other types of vehicles, certainly the shopping mall will possibly have more areas to activate new business and new business areas. Not only commercial areas, but medical centers. That's what we expect to see in Curitiba. It is the largest medical center.
By the way, the last ICSC congress concluded that medical centers are important in shopping centers. I am happy about it because we were pioneers about 25 years ago or slightly more than that, and it proved to be an amazing success. We also did it in Ribeirão Preto, it is doing well, and naturally in Curitiba. Why is that? People who go to the shopping center on a daily basis, they understand it is so convenient to see a doctor in the same site. I do not have to think about much. On the other hand, it is easier to see a physician or a doctor in a shopping center compared to going to a hospital or a clinic. It is more pleasant at a shopping center.
Our philosophy, once we proposed this 25 years ago to physicians, our philosophy was that pain and pleasure are two sides of the same coin, and it hurts to go to the doctor, but it is pleasant to go to a mall. A doctor's physician is going down over the years. So, you feel more excited. If the clinic is crowded, you can be there in the shopping center, and you are contacted via mobile when your appointment is ready. We have 42 medical centers, two big diagnosis centers, one-day hospital, getting approximately between exams and appointments on a monthly basis, 200,000 operations. So it is truly something important. People are getting older, and they really need to take better care of their health. Coming back to parking lots.
If they are left empty, there will be an additional gain to shopping center companies because they already appreciate it, and we can have a more efficient multi-use approach. I do not know if I answered your question.
Just adding to the comment, Dr. Peres, and answering your comment. In your earlier remarks, car flow increased 3.7% this quarter year-on-year. The revenue increased 7.9%, so there was significant growth. This higher growth, I would say, stems from three components. Firstly, more parking spaces. We have additional more than 500 new parking spaces in our network, particularly in Canoas. Halfway through the quarter, we do not even have the full effect. Secondly, because we see people spending more time at the shopping center. Because now we have more leisure, more entertainment. So, over the years, you can clearly see people staying longer.
Not to mention there are more services, right, and also the change in the mix. Well, it is not a change, actually. Naturally, we are being adapted to times. If you do not adapt yourself, you die, right? Thirdly is the change in the rate for the parking fees. We have to be adapted when we have strong commercial centers. So naturally, we have to be selective, otherwise, the parking lot would be crowded, and consumers would never get there. So, we are more optimistic about it, even though we know there is this trend, like we said before, of using this area for different things, like urban planning with alternative transportation. As for Parque Global CapEx, this quarter's was nearly zero. Only expenses with the design. Well, it is not zero, but it is very low related to design of projects.
Okay. Thank you. Good morning.
The next question is from Luis Stacchini with Credit Suisse. Good morning, Luis.
Good morning. Thank you, Peres and Armando, for the presentation. I have two questions. The first question has to do with strategies and capital structure. Could you give us more color on the company's appetite for leverage? Dr. Peres was right to say or to mention a leverage that is more conservative vis-a-vis the market average. I would like to understand if this lower interest rate scenario, maybe on a longer basis, does it make sense to have a higher leverage Multiplan? Along the same lines, do you envisage the use of net debt over EBITDA ratio as a means to have more feasible projects and acquisitions and the CapEx may be slightly more squeezed? Could you tell us more about the leverage strategy and the potential for acquisition? The second question has to do with tenants' appetite. How do you see this dynamic moving forward?
We can see that commercialization level is pretty strong, but you have significant brands coming out, and maybe it has an impact on vacancy. Do you think this will continue to have stronger rental services, bring in pricing power to the company, spreads that are stronger? Just to have a better reading of the rent and also your strategy to announce projects with better rent conditions to you. Thank you,
Luis. Good questions. Peres asked me to answer this question. I am going to share my perception as the man in charge for the finance department. Well, maybe I can add something later on. He doesn't like debt, but he loves great projects. Whenever he sees a good use of capital, he knows it takes leverage. For a while, you thought our debt would be zero, and we said it wouldn't. We started to distribute more money, thinking about shareholders, less to CapEx, owing to the economic space, and distributing more money. Then lower than two in recovery. But the company always had more projects than capital. It remains as such. With our IPO, we could have faster project and leverage the company more often to run these projects.
From the moment the interest rate is more adequate to our activity. By the way, it's no use saying I have very low interest, high volume, then the financing term is always short-term. It doesn't make sense to our business. But what we see is the opposite. Capital markets in Brazil developing, offering financing, loans, capital markets operations from all sides, including long-term, which is very good.
Prices at world levels, very attractive and appealing. We can see the economy improving, and we have good projects. We may leverage, not because interest rates are cheap, but rather because we have good projects.
In my life, I am an entrepreneur for many years now, but I recall that in 1984, that was a remarkable year in my life. Multiplan at that time was still in the development phase. I was fast and managed to build a shopping center. By the way, three shopping centers, being the latest in Brasília. Brasília, by the way, was opened by President Figueiredo at that time. On that occasion, just to give an idea, when we don't have money, but we have this momentum to do things when you're younger, for instance. I had my soul in debt. I had 10% capital and 90% debt.
I am just not saying 6%, 7% interest rates, but 200%. So an addition in debt of 200% per year, if you consider restatement. In 1984, I remember there was a drop of 3% in GDP, and the country faced a problem of foreign debt. It was a severe problem. Brazil had no currency. It was the worst scenario at that time. I guess it was one of the latest years of the military regime. The military regime, many people say what they lived with, and I can say that I lived the 10 first years of my life as a businessman during the military regime, and I never grew so much in my life, so much so that I was 22, in college, and I established this real estate company.
Eight years later, the company grew so much that I was going public in the stock exchange in Rio at that time. It was so good. Brazil was growing by 10% or 11%. It was just amazing. Argentina had a flow, and foreign exchanges favorable to Brazil would flood Argentina with Brazilians. Delfim was a genius, the economic genius at that time, according to the Argentinians. However, naturally, we got into a foreign exchange crisis, and inflation can impair you, but foreign exchange may kill you. The government neglected this at the time. But just one caveat, at that time, the oil crisis, if we consider Brazil's export income, the oil sector would take 70% of the currency. Brazil didn't deliver oil. Today, we are in a different scenario.
We are exporting, and the prognosis is that Petrobras, for the last 10 years, will be delivering 3 million barrels per day. This is really good. Pre-salt is going to deliver great results. Now, coming back to the debt today. Those who went through those turbulent times in the past and sold their soul know how much the suffering is, with physical and psychological consequences. Debt kills you, not only physically, it also kills your soul. But luckily, we designed an investment model for pension funds at that time, and it was one of the main investors. Pension funds were one of our main investors, and that allowed us to sell part of the stake of the shopping center to pay the debt. Belo Horizonte, BH Shopping, which turned 40 recently. There was a time we only had 35% stake, and today we own 100%. We're back.
We're buying our assets, which are high-performing assets.
Just to give you some information, you may not know this, but this shopping mall cost $12 million at that time. There was no credit, and I had to plead Citibank to fund me. Citibank had never financed a shopping center, nowhere in the world. What about Minas Gerais state? In a freeway, 8 kilometers from the city. They thought I was a lunatic. The shopping mall that cost $12 million at that time is turning 40 today, and we acquired the last stake from Usiminas. How much was that? BRL 469 million. We acquired 20%, right? Right. So the income is 100%, doubling in 40 years, the investment of Usiminas doubling nearly every year. What I'm trying to say is that investment is good. However, myself, our company, turned out to be a more conservative company.
We've been through Sarney administration. We've been through the revolution. Collor administration, which is also tough, seizing everybody's money. We've been through tough times, but we survived. We also invested abroad. What I'm trying to say is that Brazil is a country that is a rich country, but unfortunately, the people is poor. So out of a structural thing, naturally, the flooded state caused a ludicrous cost to the nation, and therefore, domestic companies become less competitive. But despite of that, there are plenty of opportunities in Brazil. My current debt motto is the following. My current net debt today is approximately BRL 2 billion. I have this project. They knock on my door offering BRL 1.82, and I say, "Well, if I'm bored, I can sell that project, and I can zero the company's debt." But it's not worth killing the hen or the chicken of the golden eggs.
The debt is low. Think about the business, because our business is far more profitable than 6% or 7%. So we have a good structure for loans. But I'm just explaining what it means to be affected, believing that you're not going to have money enough to pay your children's education. I've been there before, but luckily, today things are different.
You could even buy the school now, right?
Yeah, right. We can pay other people's tuition.
What about the threshold?
We don't see any reason to change yet. We still believe we can have results with these projects, even at lower interest rates. By the way, it's the opposite. The value generated to shareholders increase even more. When you have NOI of 10% or 11% in the third year, the nominal interest rates at 14.5 is one thing. When it's 5% and 5.5% or even lower than that, and you keep on adding 10%, 11% So it's much higher. Lastly, about tenants appetite.
Let me share something with you. For five years, what was the change in stores? In five years. Not even five years, actually, because we don't have a full year. We have nine months of 2019 only. 1,776 stores, 130,000 sq m, 4.5 big shopping centers. Shopping centers like Jacarepaguá, for instance. So if we say there is no tenant appetite, what are these numbers then? So it's the opposite. We have tenant appetite for good shopping centers, for icons. What about Jacarepaguá rent? Nearly 60% of the area is already leased, already rented in Jacarepaguá. Well, it's not easy, but what is the challenge? The challenge is not to have 100% rent. What we need is the good quality of stores, the right mix, with the return expected. So that's the challenge. Not really renting 100%. So the appetite is gradually improving. We are changing tenants.
Sales are growing and remaining at a higher level. And certainly, this will bring more room for better negotiations. We have 97.6% of occupancy rate. Considering everything all the time, technically, it is very hard. So, there is room. That's what I mean.
Thank you, Peres and Armando. Thank you for the explanation. Good morning.
The next question is from André Mançur with Citibank. André, good morning.
Good morning, Dr. Peres and Armando and team. Thank you. My first question is about Canoas. You added 570 vacancies, an increase of 22% in the number of vacancies in the shopping center. On the one hand, they have the Uber event, but that shopping mall needs more parking spaces. Jacarepaguá, what about GLA 30,000, 9,000, 10,000 parking spaces? It is lower compared to ParkShopping Canoas before the increase. Do you believe you are going to increase the number of parking spaces in Jacarepaguá? Or it is only about ParkShopping Canoas, where people do not take Uber so much? It goes against what many people believe in terms of a reduction in parking spaces in ParkShopping Canoas. My second question is about the monorail, a potential monorail from BarraShopping to VillageMall.
If you follow the company for a while, we know that BarraShopping, we had a monorail from 1996 to the year 2000. It was paid, and it lasted four years. Now with the new monorail, would it also be paid? What is the difference compared to the old monorail that was deactivated in the past?
Thank you. André, good questions. Jacarepaguá is located inside a densely occupied neighborhood with 600,000 people at a very good location. Many people will walk to the mall. Many will drive to the shopping center. What I am trying to say is that unlike ParkShopping Canoas, we went to the middle of the forest and we opened avenues, we opened access, we built kilometers of paved roads for people to get there, and it was a risky bet. ParkShopping Canoas is significantly smaller than Jacarepaguá. The purchasing potential is also smaller. What happens? In Vale do Sinos over the weekend, for instance, people come from remote areas, from Novo Hamburgo, Porto Alegre. Porto Alegre is not so far away, 15 minutes. I never thought people from Porto Alegre would come to the shopping center.
In 15, 20 minutes, you can get out of the north zone of Porto Alegre, and you reach ParkShopping Canoas region. It was a peripheral shopping center, unlike Jacarepaguá. Public transportation in ParkShopping Canoas is harder, so car is the main transportation option. As for Jacarepaguá, they have better transportation conditions, bus, Uber. That is not a high demand in Jacarepaguá. If tomorrow we need more parking spaces, we have the area to do it. It would be very good if we feel the demand is so huge that we have to build them. That is all I want to have in the world. I do not know if I answered your question. Okay, about the monorail. BarraShopping monorail has this following purpose in mind. When I thought about the monorail, we nearly doubled the extension of the mall end-to-end, BarraShopping nearly 1 kilometer.
I wondered, I wonder if people will go to the expansion. I imagine that from the entertainment viewpoint, for children, for instance, and even the elderly people, having a monorail would be good. The monorail that we had at that time was for marketing purposes, something playful, so to speak. It was not so effective because the equipment was not so good. The one we are designing right now, the equipment will cost around BRL 200 million. Just to give an idea. This is just for the access and the operation. It is pretty close to what you see in VillageMall, and there is a clear purpose. It has a clear function of adding convenience to life and have a synergistic effect between both shopping centers.
Sometimes you go to Barra, you want to go to VillageMall, but you want to take your car from the parking lot because the traffic is heavy, and other way around. But this time, rather than having about 500 stores, you're going to have 700 stores with an extremely comfortable system. Also pleasant to see the landscape of the lagoon in Barra. In this monorail, we don't expect to fail. But the important thing, there will be a synergistic effect that will be very good, great equipment, and it would also be an icon. This is unprecedented in the world. Are you inventing something? Yes, I invented a medical center in the shopping center. People said I was crazy. And now ICSC admits every shopping mall should have a medical center because people are getting older, and they'll need it.
Envisaging the future and going beyond the current reality brings some discomfort at first, because it takes a while for the dream to come true. When I came to this area, BarraShopping, well, in the past, there were 40,000 people. Now 500,000 people. We didn't even have public lighting in Avenida das Américas. Quite an adventure. And BH Shopping as well. The five first shopping malls were all adventures, and the five shopping malls account for nearly 50% of our income. Just imagine. Things that apparently are something or a higher risk, in the end, they deliver. And in the surrounding areas, we have big cities. Not Brasília. Naturally, we have this complex urban planning. But it works, because if people don't drive, they won't get anywhere. But other cities don't have the same case. Ribeirão Preto, Rio, São Paulo, and Belo Horizonte.
In BH today, around the mall, you have 150,000 people living in the area. In the past, there was nothing. When I bought the land, BNG, Dr. Flavio Arague, told me the following. He didn't believe I was going to build a shopping center there, and he told me, "Peres, what are you going to do there?" That was when we were going to sign the trust deed. I said, "I'm going to build a shopping mall." And he asked me, "Why are you going to build it there? All you have are goats and donkeys." It's true, there was no public lighting. There was just some basic structure. But we sowed the seed of a new city. The shopping center has the multiplying effect because in the surrounding area, it regenerates a neighborhood. Jacarepaguá, for instance, was already positively affected.
Properties that were sold for a specific amount, and they paid twice as much. So, we still have this mission to improve services provided in big cities. André. Well, the monorail will not be paid. That's the answer.
Okay, thank you. Crystal clear.
And it will connect not only to VillageMall, but also a VillageMall expansion, which expands retail in the mall and also corporate or office towers. So it's a greater area. It's not only connecting BarraShopping to VillageMall. It's a greater scope.
Perfect. Thank you.
The next question is from Alex Ferraz with Itaú BBA. Alex, good morning.
Good morning, Peres. Good morning, Armando. Thank you for the presentation. I have just one question. It has to do with the real growth of same-store rent. For some quarters now, the company has been reporting healthy growth, and in this quarter is based on a strong inflation rate. I would like to better understand if in this current quarter, we begin to see a drop, a stronger discount drop to explain the 3% real growth, or if it's tenant anniversary or a specific event. Why did we have faster growth of real growth on top of the same-store rent of the company?
Alex, that's an easy answer. It all boils down to efficiency. I could explain this in a thousand different forms. It's very complex. What we've been doing is to be efficient. Changing stores that were underperforming and having stores that have better sales or are more adapted to the current reality. The shopping body is a living body. Now in Belo Horizonte, we saw the shopping center that was born with 124 stores, and now the total is 400. And for 40 years, what we have are 10 tenants from the original one. So this mutation is only natural. Companies that open the business, others go out of business, and some persist. That's natural. Just adding to the comment, Alex. We have step-ups more than discounts. There was a reduction in discounts. Discounts are gradually going down.
We never believed discounts would come down fast, quite the opposite, and they keep on going down. Now, curiously enough, if we think about the third quarter 2018 conference call, one of the questions raised at that time, if I recall it well, was if in the following year, considering we would have higher onlending of inflation, if we could do this onlending on a full scale. Now we have three months of the year, not only transfer inflation, but also posting this quarter a higher growth, one of the highest of recent years. And in all quarters this year, we posted real growth on top of the inflation adjustment effect.
Thank you. Perfect, Peres and Armando.
Thank you, Alex.
The next question is from Jorel with Morgan Stanley. Good morning, Jorel.
Good morning, everyone. I have just one question. Historically, your portfolio has a sequential drop in rent expenses in the second and third quarter. For instance, for the last 12 years, the average drop was 3%. I would like to understand how the dynamics changed this year. There was a sequential growth in rent revenues. Do you think we should consider this on a permanent basis?
Jorel, we don't follow these standards or patterns believing that every third quarter there will be a drop in rents compared to the second quarter. It might happen. It might be a coincidence, but there is a number of factors that justify the use of this term, coincidence. For instance, every five years, you have many contracts being renewed and they might have an impact. Another important factor is inflation. We transfer inflation of the last 12 months. Considering contracts that are terminating every 12 months, things change, and accumulated inflation rates. And the third and last point, which I believe is the most important of all, is that we keep on going. The economy is going on. Shopping centers are with high flow rates, more car flow, and rents are going up. Things are doing well. So I use this analogy with a train.
The first time the wheel turns, it is more challenging, but once the train gets momentum, you have the inertia effect, things get easier. The train keeps on moving. I do not think there is a logic explanation or a pattern of the third quarter with a lower rent, but just a coincidence. I hope I have managed to explain the reason to you.
Yes, it is very clear. Thank you.
The next question, Elvis Credendio with BTG Pactual. Elvis, good morning.
Good morning, Peres. Good morning, Armando. Just a question. At the beginning of the presentation, you mentioned there was 8%-9% sales growth in October vis-a-vis 5% in the third quarter. What is the reason behind this? In the fourth quarter, we do not expect to have a month with a week-based effect as we had in July. Is there a positive impact of FGTS accounts release? Anything along those lines that will support tenants' sales?
Elvis, firstly, I would like to say that Bolsonaro's administration, many people may not like it, but it is working. The economy is beginning to wake up over the last two months, and there is more excitement on behalf of tenants to expand their activities, unlike what happened in the first half of the year. It was something almost cyclostemic. That is the first point. I do not know if you expected something else, another explanation. There is something else we also do, which is change in mix. Big stores like Fnac, which naturally occupied an area, and the income was relatively small compared to it, but it opened room to have another 10 or 12 activities which pay a much higher rent.
Big stores, which naturally open their space, their area, are being used now to renew activities that up to then we did not have enough room to do it, and these activities start paying a higher rental rate. In addition, we always try to improve the environment, investing in quality, improving services. If you put it all together, at the end of the day, we can reap the fruit as of now.
Perfect, Peres. Thank you.
The next question is from Ygor Altero with Santander. Ygor, good morning.
Good morning, everyone. Thank you for the conference call. I would like to better understand your digital strategy in the sense of designing a marketplace. Is it only for tenants? That is the first question. The second question is about residential projects. The company already did something in the past, and the market is improving. What is your appetite vis-a-vis this type of project? Thank you.
Ygor, Armando speaking. Answering your first question about marketplace. It is not marketplace per se. What we are doing is to create a super app, which contains, which includes marketplace. The utmost goal is to improve convenience and add convenience to consumers. It already includes marketplace, which can also be used for shops and for shopping, and also to improve convenience and to extend store hours. If you want to buy a pair of shoes, the black top, you can browse via computer, and then you go to the mall. Marketplace is just one of the tools that is inside our super app, which contains many other facilities. Over time, we expect to include new facilities as well.
As for the incorporation of residential projects, the market is a lot stronger, more active, not only in São Paulo, but also in other cities. We are excited working in some launch in Porto Alegre. We have a priority design in real estate development. We already have 250,000 sq m of potential sales area. In the first phase, we will have 34,000 sq m. We are working on this with a final detail, and we hope that pretty soon we will be starting a sales process and a launch for sales in this phase. Like Dr. Peres said before, we have nearly 1 million sq m. There is a breakdown in the release for potential real estate projects for sale beyond our area to work on expansions in new shopping centers. There is something important here. I am sorry to interrupt you.
The accounting value is very low, so the sale of property will generate a lot of income. In the past, our margin was above 30%. I am projecting additional gains of 20% because I am very conservative. It could always be higher. Naturally, we project that for the next five years, we may have launched approximately 300,000 sq m of saleable area. That is very comfortable for us to know that if we want, we do not even need financing to do that because we have an uptake at a much lower interest rate, and sometimes we transfer to consumer at a lower rate, and oftentimes it may sell credits. The company's financial position is very healthy. I am a banker, and I like to work on loans. It makes me very happy. I have to say that we do not rely on financing, nor land. Everything is here.
All we were waiting is to bring the termination business to an end. Unfortunately, it was totally crazy because the last law was a federal one, and judges starting amending things and creating a monster that broke the market of construction companies in the country. That is the problem. We are very excited with this increase. We see Bolsonaro's administration as a government that is doing a lot of things that I never imagined I would see an administration doing after all this time that I lived. They do everything to prevent him to rule the country. Despite of that, Bolsonaro is doing quite a lot. Let us close our presentation, and I thank you all for your support, your constant support. Our joy is to make you be more profitable.
Thank you very much.
This concludes the question-and-answer session. Multiplan's conference call is completed now. Thank you all for joining us and have an excellent afternoon.