8/4/2019 2Q08_OneYearofShoppingPtioSavassi
2/3
Case Study
MULT3
One year of Shopping Ptio Savassi
In June 2007 Multiplan acquired a 83.8% share of the Shopping
Ptio Savassi in BeloHorizonte, in order to control competition with
Diamond Mall, and consolidate Multiplansposition in the third
largest city of Brazil. One year later sales per square meter have
increased
35.5% in Ptio Savassi, 32.3% in DiamondMall and 16.2% in BH
Shopping, due to thesynergies achieved from Multiplan management of
the three shopping centers. Highlighting thatPtio Savassi had an
initial yield above expectations (actual of 7.6% vs. 6.9%
expected).
To achieve the results Multiplan used its expertise to upgrade
new assets in a number of areas:
Clear regional segmentation strategy since the acquisition
strategy, Multiplan has createdclear strategies for all 3 of the
owned malls in Belo Horizonte, such that each targets adistinct
consumer segment in the region. BH Shopping is the largest mall of
the region witha broad tenant base, therefore they have been geared
towards targeting consumers in theA,B and C classes demographic;
DiamondMall with its sophisticated design and triple AAAstores,
offers a differentiated service to attend a premium class shoppers;
Shopping PtioSavassi aims its services towards a younger, urban
class, which is also a subsection of A
class regional consumers.
The tenant mix balance Multiplan decided to change the tenant
mix according to themalls position in the market. The company seeks
to balance the numbers and types ofstores in the shopping center in
order to attract customers and boost sales, pleasing bothtenants
and consumers.
Optimizing space every inch is seen as an opportunity to add
extra value, thereforebringing the best store to the perfect
location is a priority to maximize this value, and makeaccess easy
and clear for the consumer. Ptio Savassi adapted new areas to make
spacefor stores that come to aggregate synergy and to demand the
attention of customers, suchas one of the most famous American
steakhouse chain to open first in Belo Horizonte.
Opportunity for higher rents when Ptio Savassi was acquired the
rent prices of some of
the contracts were bellow the companys standard, thus that was
an immense upside thatalso contributed to make the acquisition
feasible. Ptio Savassi is close to its 5 yearanniversary and also
the end of most of its contracts, for this reason Multiplan was
able torenegotiate the 5 contracts that expired in 2008 with an
average of approximately 36.9%above their former rent
High quality standards in order to keep the high quality
standard of the portfolio, thecompanies providing services to
Multiplans shopping centers started operating in ShoppingPtio
Savassi as well. By improving quality in security, cleaning service
and maintenance,Multiplan guarantees the brand awareness strengths,
the best position in the share of mindand the trust of the
customers
Since the acquisition, the Shopping Ptio Savassis NOI has
increased 20.6%, which shouldrepresent a gain of R$33.1 million
considering that R$160.7 million was invested to acquire this
asset. Despite this growth, Multiplan believes that Shopping
Patio Savassi still has room to growand Diamond Mall will be
benefited following the same path.
