International Capital Markets: REITs - Multiplan, Brazil

International Capital Markets: REITs Multiplan - Brazil ​(B3: MULT3.SA)

Nick Kunz

David Kruth, CFA International Capital Markets: REITs Columbia GSAPP MSRED

Mar 12, 2019

B3:MULT3.SA​ ​/BZL​ ​BOVESPA​ ​/ US S&P 500 - Market Performance Comparison

The analysis conducted here examines one company; Multiplan (B3: MULT3.SA). This analysis is made in an effort to provide additional insight into the decision making process for International REIT investing. All amounts denominated in local currency (R$, Brazilian Real).

Multiplan (B3: MULT3.SA)

Multiplan (B3: MULT3.SA) is a publicly traded Brazilian REIT on the Brazil Stock Exchange and Over-the-Counter Market. The company is an owner, operator, and developer of retail shopping malls in major urban population centers in Brazil. Multiplan was founded in 1974 and IPO’d in 2007. It owns roughly $5B USD of total assets and operates 21.5M sqft. of property, containing 5,400 stores, serving 180M customers annually. Multiplan’s portfolio is geographically concentrated in Rio de Janeiro, São Paulo, Minas Gerais, Rio Grande do Sul, Paraná, the Federal District, and Alagoas. The company has a strong tenant base in high demand cities. Multiplan has an experienced management team and is headquartered in Rio de Janeiro.

Advantages: ● Serves largest demographic market in Latin America ● Continued sales growth, major new developments, expansions, acquisitions in major markets ● Retail shopping malls are generally considered secure places sheltered from violent crime

Disadvantages: ● Retail sector only REIT with other strong retail segment competitors ● Possible social and political instability, higher cap rates than some other international markets ● Trades at premium to anticipated NAV

Additional Comments: ● Strong secondary parking revenues ● Holds most valuable land bank among competitors ● Retail sector in emerging markets threatened by ecommerce?

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B3: MULT3.SA - Earnings Analysis - 19E / 20E

Exhibited here is the anticipated NOI and FFO/S for Multiplan in 2019 at years end based on Q4 2018 reports.

All amounts denominated in local currency (R$, Brazilian Real).

B3: MULT3.SA - Valuation Analysis 19E

Exhibited here is the anticipated current valuation of Multiplan based on Q4 2018 reports. All amounts denominated in local currency (R$, Brazilian Real).

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B3: MULT3.SA - Debt Analysis - 19E / 20E

Exhibited here is the anticipated debt for Multiplan in 2019 at years end based on Q4 2018 reports. All amounts denominated in local currency (R$, Brazilian Real).

B3: MULT3.SA - Implied Cap Rate Analysis - 19E

Exhibited here is the implied cap rate and enterprise valuation for Multiplan in 2019 based on Q4 2018 reports.

All amounts denominated in local currency (R$, Brazilian Real).

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