SCAR3 São Carlos Empreendimentos e Participações

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 created as a subsidiary of Lojas Americanas S.A., it began operations at the end of 1989, focused on the development and management of shopping malls to support the expansion of the retail chain into the country’s interior. In 1998, it received Lojas Americanas’ real estate asset portfolio through a capital increase, in a “dropdown” transaction that transferred street-front 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 central focus to investment in and management of commercial properties. The company’s shares, traded on B3 under the ticker SCAR3, are part of the universe of publicly traded real estate companies in Brazil.

Over the 2000s, São Carlos consolidated a business model centered on the acquisition, active management, and sale of commercial properties, with an emphasis on high-standard office buildings. In 2006, the company joined B3’s Novo Mercado and carried out an equity offering that strengthened its investment capacity. The portfolio was expanded mainly via acquisitions of high-grade 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 the entry into convenience centers through its subsidiary Best Center, diversifying its revenue base into convenience retail, still with corporate buildings accounting for the majority of portfolio value. In the following decade, the company continued to recycle its portfolio, making relevant acquisitions such as the EZ Towers Building – Tower A in São Paulo, and selling mature assets to finance new opportunities.

São Carlos Empreendimentos e Participações’ business model 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 rates, in regions with strong corporate demand. After acquisition, active management actions are implemented—retrofit, technological and aesthetic upgrades, tenant mix review, 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 appreciation potential has been achieved, the property may be sold, enabling realization of capital gains and recycling of capital into new investments. In the Best Center segment, focused on convenience centers and street-front stores, the company operates along the entire chain: land acquisition, project development, leasing of units, 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, street-front stores, and centers. Total gross leasable area amounted to 364,600 m², distributed into 248,100 m² of offices and 116,400 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-rental segment through its subsidiary SC Living, but in 2024 it decided to discontinue this front with the sale of the GO850 project, reinforcing its focus on corporate and convenience segments.

São Carlos’ revenue generation stems mainly from property rentals and the provision of services related to project management. In 2024, net revenue totaled R$ 178.6 million, with about 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 its 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, leasing of real estate, operation of paid parking facilities, real estate consulting, and management of real estate investment funds, as well as holding equity interests in other companies. This scope allows the company to combine recurring rental income with occasional gains from asset sales, maintaining flexibility to adjust capital allocation according to market conditions in the office and convenience retail segments.

São Carlos’ geographic footprint is concentrated mainly in the states of São Paulo and Rio de Janeiro, focusing on areas with higher economic density and demand for corporate and commercial spaces. In the office market, the company directs investments to Class A standard buildings and large corporate floor plates in established business districts, such as the Avenida Paulista region, the Faria Lima and Chucri Zaidan corridors in São Paulo, and central and South Zone areas in Rio de Janeiro. The company also invests in convenience centers and street-front stores in urban regions with high consumption potential, serving primarily large national retail chains. The company’s revenue is generated entirely in Brazil, with no significant 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, environmental, and land-use regulations of the municipalities in which it operates, as well as federal and state legislation related to construction, real estate development, and commercial leases. The purchase and development of properties require approvals from city halls and environmental agencies, including project reviews, permits to start construction, regularization of improvements, and issuance of occupancy permits (habite-se), as well as interactions with utility providers for electricity, water, and telecommunications. The company adopts documentary and environmental due diligence procedures before acquiring or developing assets, in order to mitigate risks linked to regulatory liabilities and authorizations from public authorities. There is no dependence on patents, trademarks, special licenses, concessions, or royalty contracts for the development of 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 topics, 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 to fully comply with applicable environmental legislation and verifies property compliance prior to acquisition, including any liabilities inherited from previous owners. On the environmental front, it maintains projects with international sustainability certifications, such as LEED O+M Platinum for the City Tower and EZ Towers – Tower 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 occupants’ health and well-being. It has also implemented the use of International Renewable Energy Certificates (I-REC) at a project in Campinas, signaling the consumption 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 environmental and social indicators as part of an ongoing process of improvement in governance and transparency.

In social and labor matters, 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 trading of SCAR3 shares entail additional commitments to transparency, protection of minority shareholders, and good 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.