TEND3 Construtora Tenda

Construtora Tenda S.A. is a Brazilian homebuilder focused on low-income housing, with common shares traded on B3 under the ticker TEND3. Founded in 1993 in Belo Horizonte, it began operations in 1994 and, over the following decade, gradually expanded to other regions of the country. In 1999 it started operating in São Paulo and, in 2006, began operations in Rio de Janeiro. The expansion gained momentum in 2007, when the company entered new metropolitan regions, including Salvador, Porto Alegre, Goiânia, Brasília and Vitória, and carried out its initial public offering, listing on Bovespa with an offering of 67 million shares. The company’s corporate history includes a period as a wholly owned subsidiary of Gafisa between 2009 and 2017, when its shares ceased to trade on B3, followed by its return to the market as an independent company listed on the Novo Mercado.

Construtora Tenda’s business model is focused on the development and sale of residential units for the low-income segment, with the majority framed under the Minha Casa Minha Vida housing program. The company operates mainly in the development and sale of individual units under the Tenda and Alea brands, offering products aimed at families with monthly household income of up to approximately R$ 8,600.00. Operations are organized into a single operating segment, with substantially all revenue coming from residential real estate development activities. In 2024, the company recorded net operating revenue of more than R$ 3.2 billion, with positive net income, reflecting the maturation of its model based on construction standardization, commercial discipline and integration with subsidized mortgage financing.

Starting in 2012, the company carried out a significant restructuring, temporarily suspending new launches to address remaining projects and develop a new business model. This model, consolidated and later refined in 2021 and 2022, is based on operational pillars focused on efficiency and risk mitigation. The “contracted launch” concept stipulates that new projects are only brought to market after formal approval by financial institutions qualified under Minha Casa Minha Vida and registration of the condominium incorporation, reducing financing, licensing and approval risks. The “assigned sale” model ties the start of sales to the buyer’s prior credit analysis by the financing bank, which shortens the operating cycle, reduces cancellations and lowers working capital exposure. This is combined with a sales strategy centered on own stores and regional partners, and an industrialized construction method based on concrete walls with aluminum forms, which enables greater standardization, productivity and cost control.

Construtora Tenda’s products consist predominantly of two-bedroom apartments, with private floor area around 40 square meters, in developments targeted at bands 1, 2 and 3 of the Minha Casa Minha Vida program. The company works with standardized typologies, operating basically with two product SKUs: buildings up to four floors without elevators and buildings with more than four floors equipped with one or more elevators. This standardization supports economies of scale, repetition of project designs in different locations and simplification of the production process, while still allowing specific adaptations such as balconies and garden units, depending on the positioning of each project. Construction is carried out using concrete walls cast in aluminum forms, a model which, together with a structured procurement and planning system, aims to maintain strict cost control even in scenarios of inflationary pressure on materials and services, and also allows works to begin only when the project already shows a high level of sales and mortgage transfers.

The company’s commercial activities combine proprietary and third-party channels, with a strong physical presence at points of sale and integration with digital channels. Tenda maintains its own stores and sales points funded for partner teams, which concentrate the marketing of all products in a given region, seeking to leverage brand recognition and the internal teams’ detailed knowledge of the portfolio. Marketing campaigns are planned in advance and launched after registration of the condominium incorporation, in compliance with legislation, using traditional media such as newspapers, television, direct mail and flyers, in addition to telemarketing structures and an online presence. Buyer financing is largely granted through the Minha Casa Minha Vida program, mainly via Caixa Econômica Federal and Banco do Brasil, with the buyer paying part of the price to the developer until delivery of the unit and the balance being financed by the financial institutions under conditions compatible with the target income bracket.

Geographically, Construtora Tenda concentrates its operations in large metropolitan regions, operating in ten urban areas: São Paulo and Campinas in the state of São Paulo, Salvador, Rio de Janeiro, Porto Alegre, Fortaleza, Goiânia, Recife, Curitiba and Belo Horizonte. The company reports nationwide operations, but with an emphasis on urban centers where it sees recurring demand for low-income housing and the ability to operate with a continuous schedule of launches and construction. The Northeast region is highlighted by the company itself as its main market, where it believes it maintains a leading competitive position in the low-income segment. All reported revenue is generated in Brazil, with no material operations abroad, and no single customer accounts for more than 10% of net revenue, indicating a highly fragmented buyer base.

The process of developing new projects involves structured stages of land scouting and acquisition, product development, economic feasibility analysis, and obtaining permits and approvals. Tenda seeks to acquire land in cities considered strategic and with sufficient demand to support continuous operations, using, when possible, physical or financial swap arrangements with landowners to reduce cash outlays and improve return on invested capital. Internal studies of demand, competition, sales velocity and pricing support development decisions, which are submitted to internal governance bodies such as the Executive Committee and, when applicable, the Board of Directors. The company holds quality certifications for its construction processes, such as ISO 9001 and PBQP-H level A, evidencing the adoption of formal systems for managing and controlling construction quality.

Construtora Tenda operates in a complex regulatory environment specific to the Brazilian real estate sector, which involves federal, state and municipal legislation. The company is subject to the Real Estate Development Law (Law 4,591/64), the Civil Code, the Consumer Defense Code, as well as municipal master plans, zoning and land-use laws, building codes and environmental regulations. Project approvals, registration of developments, sales of units and formalization of financing guarantees follow the regulatory framework of the Real Estate Finance System and the Housing Finance System. In terms of governance, Tenda is listed on B3’s Novo Mercado, a segment with more stringent corporate governance requirements, and in 2024 it approved a clawback policy for executive variable compensation, aligning itself with international corporate governance standards. As for its environmental, social and governance (ESG) agenda, the company does not yet consolidate information in a dedicated report, but its inclusion in the IDIVERSA B3 index, which considers diversity aspects, indicates some market recognition in social and governance matters related to the company’s composition and policies.

In addition to traditional development of vertical projects, Tenda has been building a second business line in offsite construction through its subsidiary Alea, focused on mid-sized cities with populations between 100,000 and 500,000 inhabitants. This operation uses wood frame technology, based on structural wood panels for the construction of houses and buildings up to five floors, produced on an assembly line located in Jaguariúna, in the interior of São Paulo state. Alea’s plant was announced as one of the largest wood frame panel production lines in Latin America in terms of planned capacity, and has been receiving investments for expansion and governance enhancement, including a minority investment from specialized funds. This business line reinforces the company’s industrial profile and broadens its range of solutions for low-income housing, while maintaining its focus on products framed under federal housing programs and targeted at lower-income populations.

Over its recent history, Construtora Tenda has combined scale growth with process improvement and financial adjustments. The company has reached operational milestones such as the delivery of more than 150,000 apartments in aggregate and inclusion in broad B3 equity indexes such as IBRX 100 and IDIVERSA B3. In 2023, it carried out a follow-on offering to strengthen its capital base, in addition to selling portfolios of real estate receivables, in line with the logic of the Real Estate Finance System and the use of securitization as a cash management tool. The company maintains a growth vision supported by a strategic land bank, construction standardization, integration with subsidized housing credit, and the consolidation of its presence in metropolitan regions with structurally high demand for low-income housing, while keeping its focus on social housing and on the income ranges served by Minha Casa Minha Vida.

In summary, Construtora Tenda, through its TEND3 ticker on B3, positions itself as a developer specialized in low-income housing, with an industrialized business model, its own sales structure and strong integration with Brazil’s low-income mortgage financing framework. The combination of scale, standardized product, discipline in land origination and participation in public housing programs defines its role in a specific niche of the residential market, distinct from development geared toward mid- and high-end segments and influenced by public policy, credit availability and the macroeconomic dynamics of the construction sector.