LAVV3 Lavvi

Lavvi Empreendimentos Imobiliários S.A. is a real estate developer and construction company founded in 2016, originally as Lavvi Empreendimentos Imobiliários Ltda., through an association between Cyrela Brazil Realty S.A. Empreendimentos e Participações, RH Empreendimentos Imobiliários Ltda. and entrepreneur Moshe Horn. In 2020, the company was converted into a corporation (sociedade anônima) and became a publicly held company in category A, with common shares traded on B3 under the ticker LAVV3. Following its IPO in September 2020, Lavvi consolidated its presence in the Brazilian capital markets and began reporting results and operating indicators with greater granularity, while maintaining a strong equity and operational link with Cyrela.

Lavvi’s core activity is real estate development, focusing on the design, development, construction and sale of residential and non-residential projects. The company operates in a vertically integrated manner throughout the real estate product cycle, from land prospecting and acquisition to delivery of units to the final buyer. Its business model involves structuring projects in different price bands, predominantly in the mid, upper-mid, high-end and luxury segments, seeking to combine economic return, sales velocity and construction cost control. In 2024, Lavvi’s net operating revenue came entirely from real estate development, underscoring the concentration of cash generation in this single operating segment.

Throughout its history, Lavvi has significantly expanded its scale of launches, PSV and results. Since 2016, the company has launched 28 projects, totaling 12,125 units and approximately 941 thousand m² of usable private area, with gross General Sales Value (VGV) of about R$ 11.8 billion on a 100% basis. In 2021, the first full year after going public, it recorded launched PSV of R$ 1.2 billion in projects such as Villa Versace, Wonder Ipiranga and Grand Vitrali, in addition to net sales of R$ 943 million. In 2022, even in an environment of high interest rates and contractionary monetary policy, it launched six projects totaling R$ 2.6 billion in PSV, with highlights including High Wonder and Verdant Parque Resort, which together accounted for R$ 520 million in launches. In 2023 and 2024, the company accelerated its development pace, including equity partnerships and the creation of the Novvo brand, focused on the lower-income segment, posting in 2024 a record 11 projects launched, R$ 2.8 billion in launches at its stake and net revenue of R$ 1.5 billion, with significant growth versus the previous year and net income of R$ 343 million.

Lavvi’s operations are concentrated in the city of São Paulo and its metropolitan area, both in residential projects and some non-residential developments. The company positions its products according to well-defined price ranges per square meter, from the economic segment up to luxury, although its historical focus falls on the mid, upper-mid, high-end and luxury segments. This segmentation is used in project design, in defining finish standards, in configuring common areas and in choosing land locations, often in neighborhoods with good urban infrastructure, proximity to subway stations, parks and shopping hubs. Lavvi’s landbank, with an estimated value of R$ 8 billion as of December 31, 2024, is almost entirely located in the city of São Paulo, spread across land already acquired for future projects, which provides visibility for the project launch pipeline for the coming years.

The company maintains a vertically integrated production process structured in interconnected stages: land acquisition, project development and permitting, construction and sales. The land acquisition phase is treated as a central strategic factor, with strong involvement from the Horn family and a dedicated new business team that conducts active prospecting, technical, financial and market analysis of each opportunity, as well as detailed legal due diligence. The project development stage involves hiring architecture, design and landscaping firms, closely monitored by the engineering area to ensure technical feasibility, compliance with regulatory requirements and cost control. In construction, Lavvi uses its own engineering team, with experience in millions of square meters planned and built, in addition to partnerships with specialized designers for structures, foundations and installations.

From a commercial standpoint, Lavvi has a sales department focused on strong performance at the time of each launch, seeking high sales velocity to reduce marketing expenses and funding costs. The commercial strategy includes building its own base of brokers working at sales stands, daily training on the products offered and multichannel lead generation efforts, including presence in key spots in target neighborhoods, targeted telemarketing initiatives and digital campaigns. The company also maintains a customization department, allowing buyers to adjust finishes in their units during the construction phase, as well as a customer service structure supported by relationship management systems and post-delivery satisfaction surveys. The customer base is highly diversified, with no significant revenue concentration in a single buyer, and no individual customer accounted for more than 10% of net revenue in 2024.

Lavvi’s operations are entirely domestic, with all net revenue coming from customers located in Brazil. The company operates within a regulatory environment specific to the real estate sector, subject to federal, state and municipal regulations. The development of its projects requires obtaining approvals from city governments and environmental agencies, including construction permits, licenses, approval of architectural designs and issuance of occupancy permits (habite-se). The real estate development activity is governed mainly by Law 4,591/64, the Civil Code and municipal urban planning laws, including master plans and zoning and land-use regulations. Lavvi may adopt the segregated-asset regime (patrimônio de afetação) for certain projects, which separates the land and improvements from the company’s general assets and allows it to opt for the Special Taxation Regime (RET), with unified rates applied to development revenues.

In its relationship with the capital markets, Lavvi complements the funding of its projects with structured debt instruments linked to the real estate sector. In 2024, it carried out two issuances of book-entry commercial notes for private placement, in multiple series, totaling more than R$ 400 million, which served as backing for offerings of Real Estate Receivables Certificates (CRI) securitized by Opea Securitizadora S.A. These transactions are combined with shareholders’ equity and project cash generation in the company’s capital structure, which ended 2024 with a net cash position, reflecting a low level of gross indebtedness. The combination of geographic focus, operations in mid- and high-income segments, vertical integration of processes and use of real estate financing instruments defines Lavvi’s economic and financial profile and guides the risk-return perception associated with LAVV3 shares on B3.