SCAR3

São Carlos Empreendimentos e Participações S.A. is a Brazilian publicly traded company founded on October 10, 1985, focused on investing in, managing, and economically exploiting commercial real estate. Originally conceived as a subsidiary of Lojas Americanas S.A., it began operations at the end of 1989, focused on the development and management of shopping centers to support the expansion of the retail chain into the country’s interior. In 1998, through a capital increase, it received Lojas Americanas’ real estate asset base in a “dropdown” transaction that transferred high street stores, distribution centers, office buildings, vacant properties, and land to what was then the real estate subsidiary. The following year, a capital reduction at Lojas Americanas structurally separated the businesses, turning São Carlos into an independent company with shares listed on what was then Bovespa and its own portfolio of real estate and financial assets, shifting its core focus to the investment in and management of commercial properties. The company’s shares, traded on B3 under the ticker SCAR3, are part of the universe of listed real estate companies in Brazil.

Over the 2000s, São Carlos consolidated a business model centered on acquiring, actively managing, and selling commercial properties, with an emphasis on high-grade office buildings. In 2006, the company joined B3’s Novo Mercado and carried out a public equity offering that strengthened its investment capacity. The portfolio was expanded mainly through acquisitions of high-standard office buildings in strategic locations in the São Paulo and Rio de Janeiro markets, reaching, in 2008, 48 properties valued at around R$ 1.8 billion, with a predominance of corporate assets. In 2011, the strategy was broadened with entry into convenience centers through its subsidiary Best Center, diversifying the revenue base toward convenience retail, while corporate buildings still accounted for the majority of portfolio value. In the following decade, the company continued to recycle its portfolio, executing major acquisitions such as the EZ Towers – Torre A building in São Paulo, and selling assets considered mature to finance new opportunities.

The business model of São Carlos Empreendimentos e Participações is structured in successive cycles of acquisition, development/management, and eventual sale of properties. In the Office segment, the company seeks to acquire commercial buildings with operational or physical inefficiencies, such as the need for retrofit, modernization, or improvement in occupancy levels, in regions with strong corporate demand. After acquisition, active management measures are implemented—retrofit, technological and aesthetic upgrades, review of the tenant mix, vacancy reduction, optimization of condominium costs, and capture of ancillary revenues—with the goal of increasing rental income per square meter and enhancing the asset’s value. Once the asset’s appreciation potential has been realized, the property may be sold, allowing for the realization of capital gains and the recycling of capital into new investments. In the Best Center segment, focused on convenience centers and high street stores, the company operates across the entire chain: land acquisition, project development, unit leasing, and ongoing operational management of the centers.

São Carlos’ current portfolio is essentially segmented into two real estate platforms: Office and Best Center. As of December 31, 2024, the company held 75 properties, comprising 18 corporate buildings and 57 convenience retail assets, including land, high street stores, and centers. Total gross leasable area amounted to 364.6 thousand m², distributed across 248.1 thousand m² of offices and 116.4 thousand m² of retail. In value terms, the portfolio totaled approximately R$ 3.5 billion, of which the Office segment accounted for around R$ 2.7 billion and Best Center assets totaled approximately R$ 829.8 million. In recent years, the company also tested the residential-for-rent segment through its subsidiary SC Living, but in 2024 decided to discontinue this front with the sale of the GO850 project, reinforcing its focus on the corporate and convenience segments.

São Carlos’ revenue generation comes mainly from property leasing and the provision of services related to project management. In 2024, net revenue totaled R$ 178.6 million, with around 65% coming from the Office segment, 33% from the Best Center platform, and 2% from SC Living, then in the process of discontinuation. The activities described in the corporate purpose include the management of real estate projects owned by the company or third parties, the purchase and sale of residential and commercial properties, real estate leasing, operation of rotating parking lots, real estate consulting, and management of real estate investment funds, as well as equity stakes in other companies. This scope allows the company to combine recurring rental income with occasional results from asset sales, maintaining flexibility to adjust capital allocation according to market conditions in the office and convenience retail segments.

Geographically, São Carlos’ operations are concentrated mainly in the states of São Paulo and Rio de Janeiro, focusing on regions with higher economic density and demand for corporate and commercial space. In the office market, the company directs investments to Class A buildings and large corporate floor plates in established business districts, such as the Avenida Paulista region, the Faria Lima and Chucri Zaidan axes in São Paulo, and central and South Zone areas in Rio de Janeiro. The company also invests in convenience centers and high street stores in urban regions with high consumption potential, primarily serving large national retail chains. The company’s revenue is generated entirely in Brazil, with no material operational exposure to foreign markets, and there is no concentration of individual clients accounting for more than 10% of net rental revenue.

From a regulatory standpoint, São Carlos is subject to zoning, land use, and environmental regulations in the municipalities where it operates, as well as federal and state laws related to construction, real estate development, and commercial leases. Property acquisition and development require approvals from city halls and environmental departments, including project review, building permits, regularization of improvements, and issuance of occupancy permits (habite-se), as well as interactions with electricity, water, and telecommunications utilities. The company adopts documentary and environmental due diligence procedures before acquiring or developing assets, in order to mitigate risks related to regulatory liabilities and public authority permits. It is not dependent on patents, brands, special licenses, concessions, or royalty contracts to conduct its real estate activities, and the company states that it does not make financial contributions to political parties, candidates, or lobbying activities in public policy.

On environmental, social, and governance matters, São Carlos Empreendimentos e Participações stands out for incorporating sustainability practices into the management of its portfolio, especially through retrofits of existing buildings. The company seeks full compliance with applicable environmental legislation and verifies the properties’ compliance prior to acquisition, including any liabilities inherited from previous owners. Environmentally, it operates projects with international sustainability certifications such as LEED O+M Platinum for the City Tower and EZ Towers – Torre A buildings, and LEED Silver for a specific set within the same asset, in addition to Guiaderodas Gold and Fitwell certifications related to accessibility, and to occupants’ health and well-being. It has also implemented the use of International Renewable Energy Certificates (I-REC) in a project in Campinas, signaling the use of energy from renewable sources. Although it does not yet publish a dedicated sustainability report or a greenhouse gas emissions inventory, it discloses ESG information in quarterly releases and has been gradually expanding the monitoring of social and environmental indicators, as part of an evolving process in governance and transparency.

On social and labor issues, the company states that it complies with Brazilian labor legislation and requires the same from its suppliers, in addition to carrying out occasional social initiatives, such as food, clothing, and school supply drives for donation to vulnerable populations. In governance, its presence on B3’s Novo Mercado and the trading of SCAR3 shares entail additional commitments to transparency, protection of minority shareholders, and sound corporate governance practices, which align with its long-term strategy based on active management of real estate assets and disciplined recycling of its office and convenience center portfolio.