Iguatemi (Iguatemi Empresa de Shopping Centers S.A.) [Bovespa: IGTA3], one of the largest fullservice companies in the Brazilian shopping mall sector, announces an agreement for construction of a shopping mall in the city of Ribeirão Preto, in the interior of the state of São Paulo.
The region:
Ribeirão Preto has GDP of R$ 10.1 billion – the 26th largest of all Brazilian cities, and the 10th largest in São Paulo state ; population of 551,120*, and per capita income, at R$ 18,300, higher than the average for São Paulo state. Approximately 32% of its population is from the upper income groups. Ribeirão Preto is the main city of Brazil’s most important sugar-growing and alcohol-refining region, and has become a cente r of attraction for investments, especially in real estate. Today it is one of the main commercial and industrial centers of the interior of São Paulo state. Some of the most important cities in the interior of São Paulo and neighboring Minas Gerais are within 200km – including Bauru, Araraquara, São Carlos, São José do Rio Preto, Barretos, Franca, Limeira, Americana, Santa Bárbara d’Oeste, Piracicaba, Campinas, Poços de Caldas, Uberaba, and Uberlândia – and easy access is provided by the principal state highways. The city is in a strong phase of development, with a growing number of residential condominiums, and is one of Brazil’s main centers of tourism and business. Quality of life is high – the Human Development Index, calculated by Brazil’s government statistics agency, IBGE, is 0.855, and the maximun is 1.0.

The project:
Iguatemi has signed a contract with Condomínio Residencial Vila do Golfe, the group developing the complex, a planned new city district in the South Zone of the city. The agreement provides for construction of a shopping mall adjcent to the condominium, in a separate area of 100,000 square meters (10 hectares) – in a region of high potential growth and population density, made up principally of the A and B income groups.
As well as the shopping mall, the center contains luxury vertical residential condominiums; an 18-hole golf course – at the Ipê Golf Club; office space; the Albert Sabin Lycée school, and more than 100 hectares of green and preserved areas. The shopping mall is linked to the complex by a system of perimeter avenues that also link it to other districts of the South Zone of the city. The mall will have Gross Leasable Area of approximately 32,500m2, and approximately 200 stores. The initial estimate of the total investment in the project is R$ 123 million. Iguatemi will have an 88%
interest in the enterprise, and will be responsible for development and administration of the mall. Iguatemi expects the mall’s net operational income in the first year of operation to be R$ 14.8 million, representing a real deleveraged internal rate of return of 15.8%.
Details
Total GLA : 32,500 m²
Number of stores : 200
Iguatemi interest : 88 %
Total investment : R$ 123.0 million
Estimated NOI in first year : R$ 14.8 million
IRR (real, deleveraged) : 15.8 %