HBRE3 HBR Realty

HBR Realty Empreendimentos S.A. is a real estate company focused on urban income-generating assets, with common shares traded on B3 under the ticker HBRE3. Founded in December 2011 as the urban income arm of the Borenstein family, the company is grounded in the experience of the Hélio Borenstein S.A. group, which has been active in the Brazilian real estate market since 1961. Initially based in Mogi das Cruzes (SP), HBR Realty structured its growth around the development and acquisition of properties for lease, building a portfolio of urban assets that includes convenience centers, shopping malls, corporate developments and complementary assets. The entry of Dynamo in 2014 as a partner, through a contribution of assets and capital, strengthened the company’s corporate governance and its ability to accelerate its expansion plan. In 2021, HBR Realty joined the Brazilian capital markets with its listing on B3, in an offering that enabled the raising of significant funds to support the growth of its business platforms.

HBR Realty’s business model is centered on generating recurring real estate income through the development, acquisition, management and eventual recycling of assets. The company operates across the entire real estate cycle, from land prospecting and financial and legal feasibility analysis, through architectural design, licensing, construction, marketing of leasable areas and operational management of the properties. An internal new business unit coordinates the identification of opportunities and project structuring, which are evaluated by a specific committee considering expected returns, capital structure and value creation potential. The strategy also includes the selective sale of assets that reach an advanced stage of maturity and appreciation, freeing up capital for new investments and adding dynamism to the portfolio’s composition.

HBR Realty’s operations are organized into four asset platforms that summarize its operating segments: ComVem, HBR 3A, HBR Malls and HBR Opportunities. ComVem is the convenience center platform, made up of projects focused on essential services and convenience, usually in densely populated, high-income neighborhoods, particularly in the city of São Paulo. These assets can be developed as stand-alone projects or in partnerships with developers, positioning stores on the ground floor of residential projects with active frontages. The HBR 3A platform concentrates AAA-standard corporate floors in prime areas of São Paulo’s capital, such as Faria Lima, Pinheiros, Itaim Bibi and Chucri Zaidan, prioritizing the development of high-standard office buildings over the simple acquisition of ready-made assets. HBR Malls groups together shopping malls acquired or developed by the company, focusing on dominant projects in their regions, such as Shopping Mogi, Suzano Shopping and Shopping Patteo Olinda, where the strategy is to capture value through management improvements and commercial repositioning. Finally, HBR Opportunities concentrates complementary and opportunistic assets, including hotels, self-storage operations under the +Box brand, built-to-suit projects, sale-leaseback operations and parking lots.

HBR Realty’s revenue breakdown shows a relatively diversified portfolio across platforms. In 2024, consolidated net revenue was composed mainly of the shopping mall segment (HBR Malls), opportunistic assets (HBR Opportunities), corporate floors (HBR 3A) and convenience centers (ComVem). The shopping mall segment accounted for a relevant share of revenue, followed by opportunistic assets, which include hotels and self-storage. Corporate floors also made an important contribution to revenue, with emphasis on the presence of a single corporate tenant responsible for more than 10% of net revenue in 2024. The ComVem convenience centers have been gradually increasing their share in line with the expansion in the number of projects, but they still represent a smaller slice compared to the other main segments.

HBR Realty’s geographic footprint is concentrated in Brazil, with a strong presence in the state of São Paulo and selective expansion into other relevant urban markets. The company’s origins are in Mogi das Cruzes, where it consolidated assets such as Shopping Mogi and Shopping Patteo Urupema, and the strategy was progressively expanded to the city of São Paulo, the metropolitan area and other states. The ComVem platform concentrates a large part of its projects in the city of São Paulo, leveraging a regulatory environment that encourages active frontages and mixed-use developments, but it also includes assets in cities such as Guarulhos and in other states, such as ComVem Ecoville in Curitiba (PR) and ComVem Olinda (PE). In the Northeast, the company developed Shopping Patteo Olinda in Pernambuco, and along the prime urban axis of São Paulo’s capital it added assets such as the HBR 3A Faria Lima office tower, corporate projects in Pinheiros and Itaim Bibi, as well as the Hotel W São Paulo in Vila Olímpia. In 2024, HBR Realty reached 48 operating projects, with a total gross leasable area of 240,674 m², with no revenue from customers abroad.

HBR Realty’s competitive positioning combines specialized focus on urban income with an emphasis on strategic locations and active asset management. In the ComVem convenience centers, the company seeks to leverage urban density and omnichannel retail demands, offering spaces that support physical and digital operations, last-mile delivery and formats such as pick-up-in-store, with a tenant mix that includes pharmacies, fast-food chains, neighborhood supermarkets and various services. In corporate floors, the strategy is based on the perception of a relative scarcity of AAA properties in São Paulo’s prime areas and on the ability to develop more complex projects, from land acquisition through to leasing, exploiting value arbitrage and returns on development costs. In shopping malls, the company focuses on assets with a dominant position in their catchment areas, pursuing gains in operating efficiency, tenant mix review and growth in ancillary revenues, all subject to the seasonality of retail on holiday dates.

From a regulatory standpoint, HBR Realty’s activities are subject to a broad set of federal, state and municipal rules related to real estate development, zoning, urban land use, the environment, historical heritage, leasing and condominium properties. The company must obtain and maintain operating licenses issued by municipalities, fire department inspection permits (AVCB), occupancy permits (Habite-se), environmental licenses and authorizations for the use of water resources, among others. In the shopping mall segment, the legal structuring of projects can take place through a condominium property regime or a civil condominium, which influences how the company relates to tenants and co-owners. The company is also subject to personal data protection legislation, especially the General Data Protection Law (LGPD), and to the supervision of the National Data Protection Authority (ANPD) with regard to the processing of data from customers, visitors and users of its properties.

With respect to environmental, social and governance (ESG) practices, HBR Realty has structured an approach based on identifying the impacts of its activities and on transparency with stakeholders. The company publishes an Annual Sustainability Report, prepared in accordance with the Core option of the GRI standard, in which it reports performance indicators related to material topics defined in its materiality matrix. This report considers UN Sustainable Development Goals (SDGs) deemed relevant to the business, such as good health and quality education, decent work and economic growth, innovation and infrastructure, reduction of inequalities, sustainable cities and communities, climate action, protection of life on land, peace, justice and partnerships. The company is in the process of structuring its greenhouse gas emissions inventory, with the intention of starting to measure emissions in different scopes, reinforcing the integration of climate aspects into the management of its real estate assets, even though the report does not yet follow TCFD recommendations or a specific external assurance framework for the ESG information disclosed.

Over the course of its history, HBR Realty has built a portfolio of urban income-generating properties that includes convenience centers, shopping malls, corporate projects, hotels, self-storage and other specialized assets, anchored in a combination of in-house real estate development, selective acquisitions and active management. HBRE3 shares reflect exposure to this set of income-generating real estate assets concentrated in major urban centers, particularly in the city and state of São Paulo, with diversification across retail, services, lodging and high-end office segments. Operating on multiple platforms allows the company to reallocate capital according to market conditions in each asset class, while maintaining its focus on generating recurring rental income and appreciation of its properties over time.