LOGG3 Log Commercial Properties

Log Commercial Properties e Participações S.A. is a Brazilian real estate company specialized in the development, leasing and management of class A logistics condominiums. Incorporated in 2007, initially as MRV Logística e Participações S.A. within the MRV Engenharia group, the company was created with a focus on projects aimed at logistics operations. In 2009, it delivered its first asset, the LOG I condominium in Contagem (MG), marking the effective start of its activities as a developer of logistics warehouses. Over the following years, it received significant capital contributions from institutional investors such as Starwood Capital Group and 2bCapital, which drove the expansion of its portfolio. In 2012, it adopted the name Log Commercial Properties and, in 2018, after the spin-off from its then controlling shareholder MRV Engenharia, it became an independent public company, with common shares traded on B3 under the ticker LOGG3, listed on the Novo Mercado corporate governance segment.

Since then, Log Commercial Properties has consolidated an integrated business model, operating across the entire real estate cycle focused on logistics assets: land development, standardized warehouse construction, leasing of modules, condominium management and administration and, eventually, asset recycling through the sale of properties or fractional interests. The growth strategy was organized in successive cycles, such as the “TODOS POR 1,” “TODOS POR 1.4” and “TODOS POR 1.5” plans, which envisioned cumulative delivery of up to 1.5 million m² of gross leasable area (GLA) by 2024. In October 2023, the company presented a new cycle, the “LOG 2 MILHÕES” plan, aimed at adding another 2 million m² of GLA between 2025 and 2028, maintaining expansion over a largely already consolidated geographic base. In parallel, the company implemented successive programs for the repurchase and cancellation of common shares, adjusting the capital structure and the number of shares outstanding, always within the usual practices of listed companies.

Log Commercial Properties’ main activities are organized into three operational fronts: asset leasing, real estate development, and management and administration of logistics condominiums. Leasing is the main source of recurring revenue, based on long-term contracts for the occupation of modules in logistics and industrial warehouses, with monthly rental income. Real estate development covers everything from prospecting and acquiring land to project approval, obtaining licenses and constructing class A logistics condominiums in metropolitan regions and near major consumer centers. Condominium management and administration, internalized as of 2019 through the Log Adm unit, is responsible for the day-to-day operation of the projects, including operational control services, commercial management, insurance, administrative support and digital condominium solutions. In 2024, the company’s net operating revenue was mostly derived from leasing, complemented by revenues from condominium management and other smaller revenues.

From a portfolio standpoint, Log Commercial Properties stands out as one of the largest lessors and developers of class A logistics warehouses in Brazil. At the end of the first quarter of 2024, the company reported approximately 1 million m² of delivered GLA, distributed across 31 cities in 18 states, plus the Federal District, with a strong presence in key logistics regions in the Southeast, South, Northeast and Center-West. On December 31, 2024, the total portfolio – adding delivered, under construction and under development GLA – reached around 1.9 million m², with 951,926 m² already delivered and the remainder at different stages of construction and planning. The company adopts a modular warehouse model, which allows condominiums to be divided into multiple modules to serve operations of different sizes and sectors, facilitating area absorption, reducing vacancy risk and enabling flexible asset recycling strategies.

Log Commercial Properties’ client base is diversified by sector and number of contracts, focusing on companies that require logistics infrastructure for storage, distribution and support for industrial and retail operations, including those linked to e-commerce. In 2024, the company had 157 clients and 204 active lease contracts, with average GLA of approximately 5,600 m² per contract. Revenue concentration in a single tenant is relatively low: the largest client accounted for 8.9% of gross revenue in the year ended December 31, 2024. The contract base generally consists of leases governed by Law No. 8,245/1991, with usual terms between three and five years, which may reach up to ten years in certain cases, and with contractual guarantees such as bank letters of guarantee, surety insurance or cash deposits. This contractual structure, combined with the diversification of sectors served, reduces dependence on specific clients and mitigates default and vacancy risks.

Geographic presence is one of Log Commercial Properties’ strategic pillars, based on regional diversification and operations in markets considered strategic for logistics activities in Brazil. Land selection takes into account studies of demographic, economic and infrastructure trends, as well as the local dynamics of prices and warehouse absorption. The company does not acquire ready-built assets; its entire portfolio is developed from the acquisition of land or equity interests in companies that own land. Its operations are entirely concentrated in the Brazilian market, such that 100% of net revenue is attributed to clients located in the country, with no revenue generated in foreign currency or in other markets. This geographic concentration entails direct exposure to the domestic economic cycle and the development of internal logistics, with relevance for segments such as retail, industry and, in particular, e-commerce.

On the regulatory front, Log Commercial Properties’ activities are heavily conditioned by land use and occupancy rules, urban zoning, environmental legislation and construction regulations. Each project requires obtaining a set of licenses and authorizations at different levels of government, including construction and operating permits, neighborhood impact studies, preliminary, installation and operating environmental licenses, as well as notarial documents and technical certifications issued by municipalities, environmental agencies and the Fire Department. The legalization process for a typical project involves, on average, more than one year until full approval, plus additional time for issuance of the occupancy certificate (“Habite-se”) after completion of the works. The company reports that obtaining these licenses occurs in the normal course of its activities, without highlighting material delays or recurring conflicts with the public administration, although it acknowledges that regulatory changes may increase costs and limit development in certain areas.

In environmental, social and governance (ESG) matters, Log Commercial Properties maintains a structured disclosure policy through annual Sustainability Reports. Since 2020, the company has adopted the GRI Standards methodology, in the Core option, aligned with the principles of the UN Global Compact and the Sustainable Development Goals. Starting with the reports for 2022 and 2023, the content also began to consider the Integrated Reporting framework and SASB indicators specific to the infrastructure sector, with external verification performed by an independent auditor. The company developed a materiality matrix with participation from a broad group of stakeholders, including investors, clients, employees, suppliers, the media and senior management, in order to prioritize topics relevant to the business and to society. In corporate governance, listing on B3’s Novo Mercado, the active participation of independent board members and the structure of investment and project analysis committees are presented as central elements of the company’s decision-making and risk management model.

Log Commercial Properties’ integrated activities, combining real estate development, in-house construction, leasing, condominium administration and asset recycling, differentiate the company within the logistics warehouse segment in the Brazilian capital markets. Asset recycling – the sale of projects or fractional interests to real estate funds and other investors – has been used as a relevant source of funds for new growth cycles, with transactions totaling billions of reais in recent years. The presence of dedicated business units, such as Log Adm, and the standardization of construction and operational processes are intended to keep costs under control and improve capital efficiency, characteristics that directly influence the economic performance of LOGG3 shares traded on B3 and the company’s long-term real estate cash generation profile.