Investor Presentation - FEBRUARY 2017 1 - Parque Arauco
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1
Investor Presentation
FEBRUARY 2017
CONTACTS
SARAH INMON (HEAD OF INVESTOR RELATIONS) | EDUARDO PEREZ MARCHANT (CORPORATE FINANCE MANAGER)
- 1| EMAIL:
TEL: (562) 22990510 - IR@PARAUCO.COM
2
disclaimer
This document has been prepared by Parque Arauco for the purpose of providing general infor-
mation about the Company. The Company assumes no responsibility for, or makes any represen-
tation or warranty, express or implied, with respect to, the accuracy, adequacy or completeness
of the information contained herein. The Company expressly disclaims any liability based on such
information, errors therein or omissions therefrom.
This presentation includes certain statements, estimates and forecasts provided by the Company
with respect to it’s anticipated future performance and involves significant elements or subjec-
tive judgment and analysis that may or may not prove to be accurate or correct. There can be no
assurance that these statements, estimates and forecasts will be attained and actual outcomes
and results may differ materially from what is estimated or forecast herein.
The information contained herein has been prepared to assist interested parties in making their
own evaluation of the company and does not purport to be all - inclusive or to contain all the infor-
mation that a potential counterparty may desire. In all cases, interested parties should conduct
their own independent investigation and analysis of the Company. Interested parties can only
rely on the result of their own investigation and the representations and warranties made in any
definitive agreement that may be executed.
- 2 -
3
INTRODUCTION
OUR OPERATIONS
INVESTMENT HIGHLIGHTS
FUTURE DEVELOPMENTS
- 3 -
INTRODUCTION
Parque Arauco at a glance
parque arauco OPERATIONAL METRICS BY COUNTRY
Parque Arauco is the third largest shopping center operator in Chile , the Peru
second largest Peru, and the fourth largest in Colombia. 38.9%
Peru
30.9%
Indicator/ Country CHILE PERU COLOMBIA TOTAL
Colombia
Total GLA (m2)1 454,000 380,000 143,000 977,000
14.6%
TOTAL GLA1 TOTAL
Owned GLA 383,108 270,000 124,775 777,883 977,000 m2 REVENUES2
US$MM 237
Revenues 2016 (US$MM)2 147 73 17 237
Colombia
46.5% 62.1%
# of Operations 26 18 3 46 Chile Chile
7.0%
Shareholder structure (December 2016)
5%
2% Others
Local Mutual
Funds
26%
Controlling Group
OPERATIONAL METRICS BY FORMAT
24% Neighborhood Neighborhood
9.9% Outlet
Foreign MARKET CAP3 Outlet 5.3%
5.2%
investment
Funds US$MM 2,020 5%
6.2% Strip center
Said Yarur Family 4.0%
Strip center
4.0%
3%
Abumohor Family TOTAL GLA 1 TOTAL
22% 13% 977,000 m2 REVENUES2
Local brokers
Local pension
Funds US$MM 237
79.9% 85.5%
Daily Traded Volume 2016: US$MM 1.8 Regional Regional
Source: Parque Arauco
(1) Does not include Marina Arauco nor Mall Center Curicó
(2) Revenues from January 2016- December 2016. Exchange rate: US$= CLP 676.74
(3) Source: Bloomberg
5
INTRODUCTION
In the last five years Parque Arauco has doubled GLA, revenues
and EBITDA
GLA(1) m2 1982 Parque Arauco Kennedy opens as first shopping center in Chile
1993 Arauco Maipu inaugurates in Santiago
+2.0 X 1995 Parque Arauco S.A. IPO
1997 Inauguration of Marina Arauco in Viña del Mar, Chile
947,000 2006 Parque Arauco expands into Peru with the purchase of a 45% stake in
818,500 MegaPlaza Norte in Lima
728,500
2008 Parque Arauco acquires Arauco Estación in Santiago, Chile
693,100 2010 Parque Arauco opens first mall in Colombia, Parque Arboleda in
559,700 Pereira
479,200
2011 Capital increase for US$145 MM
2012 Parque Arauco enters outlet format in Chile by acquiring Arauco
Premium Outlet Buenaventura
2014 Capital increase for US$182 MM
2011 2012 2013
2015 Purchase of minority shareholders in Colombia and Peru
2014 2015 2016
2016 Capital increase for US$100 MM
Revenues(1) US$ MM EBITDA(1) US$ MM
+1.9 X +1.8 X
237 163
215 126 148
185
158 109
137 96
127 91
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
Source: Parque Arauco. Exchange Rate: US$= 676,74
(1) Does not include Marina Arauco nor Mall Center Curicó nor Mall Costa Pacífico in Coronel. - 5 -
6
INTRODUCTION
The spread over the cost of capital of our last projects is
approximately 3%
9% 6%
3%
Real WACC (2) Spread Over Real WACC
Real Cap Rate(1)
Source: Parque Arauco
(1) Real caprate is the yield on cost rate averaged by amount invested and considers the following properties: Arauco Express Calama, Arauco Express Ciudad Empresarial I, Arauco
Express Colón, Arauco Express Huechuraba, Arauco Express Irarrázaval, Arauco Express Las Brujas, Arauco Express Luis Pasteur, Arauco Express Manuel Montt, Arauco Express Palmares,
Arauco Premium Outlet Buenaventura, Arauco Premium Outlet Curauma, Arauco Premium Outlet San Pedro, Arauco Premium Outlet Coqumbo, Arauco Quilicura, MegaPlaza Chimbote,
MegaPlaza Express Villa El Salvador, MegaPlaza Express Chincha, InOutlet Faucett, Viamix Chorrillos, Viamix Las Malvinas, InOutlet Premium Lurín, MegaPlaza Cañete, MegaPlaza Express
Barranca, MegaPlaza Pisco, El Quinde Cajamarca, El Quinde Ica, Plaza Jesús María, Parque Caracolí.
(2) Weighted Average Cost of Capital
7
INTRODUCTION
Total Return
Parque Arauco’s value creation is proven by the fact that it has had one of the highest “Total
Return” of the real estate sector in the last years
Total Return1, last 5 years Total Return1, last 15 years
Annualized, local currency Annualized, local currency
17%
16% 16% Falabella 18%
15%
14% 14% 13% 18%
Parque Arauco
12%
11%
10% 10% Simon 18%
8%
7% Taubman 16%
4% 3% Macerich 13%
1% Keplierre 13%
-2% -7%
General Growth 10%
Keplierre
S&P 500
Unibail
Parque Arauco
General Growth
Hammerson
Macerich
Multiplan
Simon
Iguatemi
Fibra Uno
Taubman
Falabella
Intu
Aliansce
IPSA
IPSA 9%
Hammerson 8%
S&P 500 7%
BR Malls
Cencosud
Intu 3%
Source: Bloomberg
(1) Total return includes dividends as of December 31,2016.
- 7 -
INTRODUCTION
Revenue type and contract duration
FIXED VS VARIABLE RENTAL REVENUES CONTRACT LENGTH
as of December 30, 2016 (BASED ON º/º OF revenues)
Other Revenues
15%
85%
Rental Revenues 39% 100%
10%
Variable Revenues 10%
15% 41%
‹2 YEARS 2-3 YEARS 3-4 YEARS ›4 YEARS TOTAL
85%
Fixed Revenues
OUR RENTAL REVENUES ARE DERIVED PRIMARILY 39º/ OF OUR CONTRACTS HAVE A DURATION OF MORE
º
FROM FIXED CONTRACTS AND ARE PROTECTED AGAINST INFLATION THAN 4 YEARS AND THE AVERAGE LENGTH IS 6.5 YEARS
9
INTRODUCTION
OUR OPERATIONS
INVESTMENT HIGHLIGHTS
FUTURE DEVELOPMENTS
- 9 -10
OUR OPERATIONS
Portfolio
Parque Arauco has iconic and dominant shopping centers in Chile, Peru and Colombia
PARQUE ARAUCO KENNEDY - CHILE ARAUCO MAIPÚ - CHILE LARCOMAR - PERÚ
LA COLINA- COLOMBIA MEGAPLAZA NORTE - PERÚ ARAUCO ESTACIÓN - CHILE
- 10 -11
OUR OPERATIONS
Portfolio
Parque arauco is concentrated in Santiago and Lima, which makes the company a
“market specialist” in these cities
Antofagasta
Coquimbo Cajamarca
Santiago
Lima
San Antonio
Chillán
Cañete
Pisco
Quilicura
Buenaventura Arequipa
Concepción Outlet
MegaPlaza Norte
Kennedy Plaza Jesús María
Maipú InOutlet Faucett
Estación Central
Larcomar
Villa Chorrillos
Villa El Salvador
InOutlet Premium
Lurín
SANTIAGO1: 58% DEL NOI DE PARQUE ARAUCO LIMA1: 19% DEL NOI DE PARQUE ARAUCO
Source: Parque Arauco
(1) Santiago represents 90% of the NOI of Chile and Lima represents 65% of the NOI of Peru.
NOI: Net Operating Income: Ingresos ordinarios + Costo de ventas + Gastos de Administración - Depreciación y-Amortización
11 - + NOI Empresas relacionadas12
OUR OPERATIONS
Chile
Portfolio
Parque Arauco has 6 regional shopping centers, 4 outlets and 14 strip centers in
Chile. the average age of the portfolio is 17 years.
Owned GLA Year of
GLA (m2) % Ownership Occupancy
(m2) incorporation Antofagasta
Parque Arauco Kennedy 113,500 100% 113,500 98.6% 1982 Coquimbo
Arauco Maipú 73,500 100% 73,500 99.0% 1993 Santiago
Arauco Chillán 32,000 100% 32,000 100.0% 2007
San Antonio
Arauco Estación 66,500 83% 55,195 97.4% 2008
Chillán
Arauco San Antonio 28,500 51% 14,535 94.2% 2009
Quilicura
Buenaventura
Arauco Express 33,000 53% 17,378 84.9% 2012 Concepción Outlet
Kennedy
Arauco Premium Outlets(1) 45,000 100% 45,000 92.4% 2012
Maipú
Arauco Quilicura 32,000 100% 32,000 99.8% 2013 Estación Central
Mall Costa Pacífico 30,000 100% 30,000 N/A 2017
Total Chile 454,000 84% 413,108 96.7%
Source: Parque Arauco
(1) Arauco Premium Outlet has four outlets located in Santiago, Concepción, Coquimbo and Curauma.
(2) Arauco Express has 14 Stripcenters in Chile: 11 strip centers in Santiago, 1 in Viña del Mar, 1 in Calama, and 1 in Antofagasta.
- 12 -13
OUR OPERATIONS
perú
Portfolio
In Peru in the company has 6 regional shopping centers and 8 neighborhood shopping
centers, 2 outlets and 2 strip centers. The average age of the portfolio is 5 years.
Owned GLA Year of
GLA (m2) % Ownership1 Occupancy
(m2) incorporation
MegaPlaza Norte 110,000 50% 55,000 98.9% 2006
Cajamarca
MegaPlaza Express Villa Chorrillos 8,000 50% 4,000 96.6% 2009
Larcomar 26,500 100% 26,500 92.7% 2010
Lima
Parque Lambramani 29,500 100% 29,500 88.0% 2010
MegaPlaza Chimbote 28,000 50% 14,000 95.5% 2012 Ica
Cañete
MegaPlaza Express Villa El Salvador 9,500 50% 4,750 98.3% 2012 Pisco
MegaPlaza Express Chincha 9,000 50% 4,500 76.1% 2013 Arequipa
MegaPlaza Norte
InOutlet and Viamix(2) 22,500 100% 22,500 68.7% 2013 Plaza Jesús María
InOutlet Faucett
MegaPlaza Cañete 16,500 50% 8,250 98.0% 2013
Larcomar
MegaPlaza Express Barranca 10,000 50% 5,000 98.8% 2013 Villa Chorrillos
Villa El Salvador
MegaPlaza Pisco 14,500 50% 7,250 95.3% 2015
InOutlet Premium
Lurín
El Quinde Cajamarca 30,500 100% 30,500 92.8% 2015
El Quinde Ica 36,500 100% 36,500 96.5% 2015
Plaza Jesús María 14,500 100% 14,500 75.6% 2016
MegaPlaza Jaén 14,500 50% 7,250 82.7% 2016
Total Perú 380,000 71% 270,000 92.6%
Source: Parque Arauco
(1)Only parnter in Peru is Grupo Wiese, which includes MegaPlaza formats (50%).
(2) InOutlet and Viamix includes two premium outlet malls in Lima and two strip centers in Lima. - 13 -14
OUR OPERATIONS
COLOMBIA
Portfolio
Parque Arauco has 3 regional shopping centers in Colombia
and the average age of the portfolio is 3 years
Owned GLA Year of Bucamaranga
GLA (m2) % Ownership Occupancy
(m2) incorporation
Pereira
Parque Arboleda 40,500 55% 22,275 95.7% 2010
Bogotá
Parque Caracoli 38,500 100% 38,500 88.4% 2013
Parque La Colina 64,000 100% 64,000 N/A 2016
Total Colombia 143,000 87% 124,775 91.6%
Source: Parque Arauco
- 14 -15
INTRODUCTION
OUR OPERATIONS
INVESTMENT HIGHLIGHTS
FUTURE DEVELOPMENTS
- 15 -16
6. 1.
Important growth Strong results in a challenging
opportunities. macroeconomic environment.
5. 2.
Conservative debt investment Stable and diversified revenues
structure and outstanding
financial performance.
highlights
4. 3.
Solid corporate governance Strong commercial relationships with local
and increased concern with and global businesses.
sustainability
- 16 -17
STRONG RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT
Positive but weaker macroeconomic outlook and attractive
industry dynamics
Parque Arauco is positioned in countries with strong macroeconomic
prospects
GDP Growth Retail Sales Growth
8.2%
7.4% 7.6% 7.1% 7.2%
6.0% 5.9%
4.5% 4.9% 4.9%
3.9%
3.3% 3.3% 2.8%
2.5%
2.3% 2.2%
1.6%
2015 2016 2017f 2015 2016 2017f 2015 2016 2017f 2014 2015 2016 2014 2015 2016 2014 2015 2016
Chile Peru Colombia Chile Peru Colombia
Population (Millions) GDP Per Capita, PPP
48.2 48.7
47.7
23,507 23,969
Av. Latam: 23,025
41.7
30.8 31.1 31.5
13,430 13,836 14,161 Av. Latam:
12,124 12,518 13,019 15,078
17.8 18.0 18.2
2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 2016
Chile Peru Colombia Chile Peru Colombia
Source: GDP Growth, Population and GDP Per Capita: International Monetary Fund, Consumption: Euromonitor.
- 17 -18
STRONG RESULTS IN A CHALLENGING MACROECONOMIC ENVIRONMENT
Results have been positive in all three countries
GLA1 Tenant sales2 Revenues2 NOI2
+3.5% +9.0% +8.7% +10.0%
424,000 1,024,996
409,500 940,488 99,417 88,850
91,479 80,802
Chile
2015 2016 2015 2016 2015 2016 2015 2016
1Q1
+6.7% +12.1% +16.4%
+12.6%
2,749,836 244,318 189,124
380,000
337,500 2,577,202
PERU 217,877 163,124
2015 2016 2015 2016 2015 2016
2015 2016
+100.0% +7.6% +9.4% +14.7%
143,000 376,439 44,446 29,080 33,346
349,727 40,614
COLOMBIA 71,500
2015 2016 2015 2016 2015 2016 2015 2016
(1) GLA in Chile does not include Mall Costa Pacífico. - 18 -
(2) Chile in MMCLP, Peru in MSoles and Colombia in MMCOP. (2) Not including overhead expenses (Corporate headquarters, regional Services Center, Chile Division, Peru Division and Colombia Division)19
STABLE AND DIVERSIFIED REVENUES
Strong Same Store Growth and a Healthy Occupancy Cost
CHILE SAME STORE SALES / CH % CHILE SAME STORE RENT / CH % CHILE OCCUPANCY COST
7.7
7.2 6.8 10.1% 10.0%
5.8 6.2 54%
5.5 Others
4.3
4.1
2.6 2.7
46%
Anchor
Stores
4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 4Q16
PERU SAME STORE SALES 1 / CH % PERU SAME STORE RENT 1 / CH % PERU OCCUPANCY COST
9.3
6.8
5.8
4.6 36%
3.8 7.2% Others
3.0 6.7%
2.2 2.0 64%
1.6 Anchor
0.4 Stores
4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 4Q16
COLOMBIA SAME STORE SALES / CH % COLOMBIA SAME STORE RENT / CH % COLOMBIA OCCUPANCY COST
12.5
11.5 11.2
9.2 9.6%
8.6 8.3 8.4 9.2%
5.7 69%
5.3 5.5 Others
31%
Anchor
Stores
4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 4Q16
1) Peru’s Same Store Sales and Same Store Rent in 4Q16 do not include Larcomar due to contingencies. - 19 -20
STABLE AND DIVERSIFIED REVENUES
Parque Arauco diversifies its market risks at a
country, format, and socio-economic level
Country level diversification (º/º revenues) Format level Diversification (º/º revenues)
Neighborhood
Outlet
7.0% 5.3%
Colombia 5.2%
Strip center
30.9% 4.0%
Peru
85.5%
Regional
62.1%
Chile
socio-economic level diversification (º/º revenues)
48 10 100
42
Medium to High Medium Income: Medium to Low
Income: Includes Includes C3 and D in Income: Includes
ABC1 and C2 in Chile, Chile, C and D E in Chile and Peru
A and B in Peru and 6, in Peru and 3 in and 2 and 1 in
5 and 4 in Colombia Colombia Colombia
Source: Parque Arauco. Based on socio-economic composition of community in which malls are located. - 20 -21
STABLE AND DIVERSIFIED REVENUES
With a 39% market share in Chile, Parque Arauco
is the market leader in the outlet format in the Andean region
Outlets currently in our portfolio
Arauco Premium Outlet Buenaventura, Chile Arauco Premium Outlet Concepción, Chile
Keys to the Premium Outlet Format
(1) Location
Arauco Premium Outlet Curauma, Chile InOutlet Faucett, Perú Located near main cities
(2) Brands
Premium name-brands
(3) Discounts
More than 30% discount
InOutlet Premium Outlet Lurin, Perú Arauco Premium Outlet Coquimbo, Chile
- 21 -22
STRONG COMMERCIAL RELATIONSHIPS WITH LOCAL AND GLOBAL BRANDS
Consolidated commercial relationships
with well-known tenants
Total GLA Years as a
Tenant Malls Country
(m2) client
CHILE
11 PERU 96.554 35
Ancho r COLOMBIA
CHILE
Stores 10 PERU
74.548 35
CHILE
5 PERU
48.050 12
CHILE
4 PERU
33.011 16
CHILE
4 PERU 8.934 18
COLOMBIA
CHILE
18 PERU 7.316 11
Non Ancho r COLOMBIA
Stores 12
CHILE
PERU
Colombia
6.058 9
CHILE
14 PERU 2.307 14
COLOMBIA
Source: Parque Arauco
- 22 -23
STRONG COMMERCIAL RELATIONSHIPS WITH LOCAL AND GLOBAL BRANDS
Parque Arauco is supporting the globalization
of several brands entering the Andean region
NEW TENANTS PARQUE ARAUCO KENNEDY IN THE LAST 5 YEARS:
NOMBRE GLA NOMBRE GLA
80% of new GLA leased in Parque
FOREVER 21 1,639 ETIQUETA NEGRA 209
Arauco Kennedy over the last
TOP SHOP 464 MICHAEL KORS 208
UNDER ARMOUR RALPH LAUREN
5 years has been leased to
445 207
LOUIS VUITTON 420 TORY BURCH 201 international brands.
GUCCI 406 ERMENEGILDO ZEGNA 197
BANANA REPUBLIC 363 ENTEL 190 Many brands have opened their
AMERICAN EAGLE 351 ARTE ISABEL ANINAT 161 first store in Chile in Parque Arauco
AEROPOSTALE 342 VICTORIA´S SECRET 129 Kennedy during the last five years
DOLCE & GABBANA 316 ETAM 123
including Tiffany & Co., Dolce &
BURBERRY 276 MILK 117
Gabbana, Forever 21, Bath & Body Works,
EMPORIO ARMANI 247 CANELA HOME & DECOR 105
Tory Burch, Victoria’s Secret,Omega,
SALVATORE FERRAGAMO 241 METRO CUADRADO 114
Versace Collection, Vince Camuto, and
TIFFANY & CO 219 JUSTICE 104
BCBG.
EL VOLCAN 218 BATH & BODY WORKS 103
BOLD 214 OCTOBER 102
OTHERS 3,020
TOTAL 14.956
International Local
- 23 -24
SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY
Parque Arauco has received important recognitions from local and
international organizations
workplace Recognition Management recognition
Parque Arauco was recognized by Best Capital Markets Strategy:
Great Place to Work in Chile and Andes in 2016.
Peru in 2016.
Investor Relations recognition Sustainability REcognition
Best Investor Relations In 2016, Parque Arauco is part of the Dow Jones
Department for Mid-Size Emerging Market Sustainability Index. We are
companies according to the first Latin American real estate company to
Santander and Revista Capital in be part of this prestigious index.
2016.
Source: Parque Arauco - 24 -25
SOLID CORPORATE GOVERNANCE AND INCREASED CONCERN WITH SUSTAINABILITY
In the last year we have continued advancing on our sustainability
strategy
ESG workstreams
• Baseline measurement:
Environmental assessment and definition of baseline carbon emissions in Chile, Peru and
Colombia
• Sustainable Construction:
E nvironme nt Sustainable building criteria applied in InOutlet Lurín in Peru and Parque La Colina in
Colombia
• Environmentally friendly operation:
Environmental experts visited assets in Chile, Peru and Colombia, providing a diagnostic
report and improvement recommendations
• Communication with neighboring communities:
Community relations strategy advancement
• Cultural activities:
Hosting cultural activities in our malls
social • Social spaces:
Providing spaces to social organizations
• Donations:
Definition of corporate donation policy
• Talent attraction:
Attract and retain talent through working conditions
Co rporate • Risk management:
Creation of a risk executive committee to identify, evaluate and manage risks
governa nce • Ethical behavior:
Important ethical behavior campaign, including virtual games with ethical dilemmas in Chile,
Peru and Colombia
Source: Parque Arauco - 25 -26
CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE
Parque Arauco’s policy is to finance projects with 50% debt
and 50% equity, and is comfortably within all its covenants
Liabilities / Equity Net Financial Debt / Equity
< 1.40x < 1.50x
1.15x 1.18x
0.87x 0.89x 0.76x 0.72x
0.81x
0.78x
0.59x
0.43x 0.47x
0.41x
2011 2012 2013 2014 2015 3Q16 2011 2012 2013 2014 2015 3Q16
ebitda/financial expenses net financial debt/EBITDA
5.87x 5.88x
3.84x 3.89x
5.00x
3.42x 3.31x 3.33x 4.25x
3.04x 3.85x
3.34x
> 2.50x
2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016
- 26 -27
CONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE
During the last 24 months, the Company has improved its
debt rating, eliminated debt in Dollars, and considerably
increased the duration of its liabilities
IMPROVEMENT IN LOCAL DEBT RATING
Liability amortization profile and duration2
Fitch: AA- Feller: AA- ICR:AA- DECEMBER 2014 (US$MM)
5.0 years 1
196
168
BBB- BBB BBB+ A- A A+ AA- AA AA+ 116
106
94
35
Summary of debt by currency 25
9
22
0
0-3 4-6 7-12 13-24 25-36 37-48 49-60 6-10 11-20 21-35
54% 7% CLP
UF 68% 5% CLP months months months months months months months years years years
UF
DEC. 16% PEN DEC.
2014 16% PEN DECEMBER 2016 (US$MM)
2016
6.7 years 1 300
14% USD
11% COP
186
9% COP 158
138 128
Summary of debt rates 74 88
95
93%
Fixed 23
6
7% 4%
DEC. Variable DEC. Variable 0-3 4-6 7-12 13-24 25-36 37-48 49-60 6-10 11-20 21-35
2014 2016 months months months months months months months years years years
96% Source: Parque Arauco
Fixed (1) Average age
(2) Does not include accrued interests and the exchange rate is at the close of December 31, 2016.
- 27 -28
ONSERVATIVE DEBT STRUCTURE AND OUTSTANDING FINANCIAL PERFORMANCE
The cost of debt has decreased importantly in the past 5 years
Date: 12-12-2014
Date: 04-17-2015
Base: 1.66%
Base: 1.62%
Spread: 1.74%
Spread: 1.68%
Duration: 14.3 Date: 10-12-2016
Duration: 14.77
Base: 1.46%
Spread: 1.02%
Duration: 12.71
Generic long-term bond issued by Parque Arauco in Chile
The cost of debt of Parque Arauco has decreased 160 points from 4.1% to 2.5%
The spread five years ago had collateral agreements, while the current spread is unsecured
with no collateral.
Source: Risk America
- 28 -29
IMPORTANT GROWTH OPPORTUNITIES
Parque Arauco has 0.9 million m2 and a 2% market participation
in Latin American and a 8% market participation in the Andean
Region.
LATIN AMERICA
GLA: 45.5 million m2
BRAZIL
MEXICO GLA: 14.7 million de m2
GLA: 17.4 million m2 32% of total
38% of total
ANDEAN REGION
GLA: 11.3 million m2
25% of total
Indicator CHILE PERU COLOMBIA
Total GLA (th) 3,600 2,100 5,600
GLA Parque Arauco (th) 424 380 143 ARGENTINA
Market Share 12% 18% 3%
Rank #3 #2 #4 GLA: 2.1 million m2
5% of total
Source: Prepared using information published by the International Council of Shopping Centers (ICSC)., and
Parque Arauco analysis - 29 -30
IMPORTANT GROWTH OPPORTUNITIES
Parque Arauco participates in markets with a growing retail market
GDP Per Person vs. GLA per 1,000 inhabitants1
2,500
USA
2,000
GLA per 1,000 habitants
1,500
Canada
AT Kearney GRDI1 window of opportunity
1,000
South Africa
500 Portugal Spain Opening Peaking Maturing Closing
Mexico Chile France
Colombia Brazil
Italy Brasil
Peru
-
5,000 Argentina 50,000
Colombia Mexico
GDP per person, PPP (log scale) Peru
Chile
500
GLA per 1,000 habitants
400
South Africa
Portugal
300 (1) Global Retail Development Index
200
Chile
Mexico
100 Colombia Brazil
Peru Argentina
-
10,000 20,000 30,000 40,000
GDP per person, PPP
(1) Source: International Council of Shopping Centers, World Bank - 30 -31
IMPORTANT GROWTH OPPORTUNITIES
Parque Arauco’s growth has come from greenfield projects and M&A
128,500 947,000
90,000
37,400
132,858
69% Greenfields
80,242
650,643 m2
27,676
91,625
24,595
83,708
55,651
194,745
31% M&A
296,357 m2
Total Total Total Total Total Total Total Total Total Total New Total
GLA GLA GLA GLA GLA GLA GLA GLA GLA GLA GLA GLA
in 2006 in 2007 in 2008 in 2009 in 2010 in 2011 in 2012 in 2013 in 2014 in 2015 in 2016 2016
Greenfield M&A
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INTRODUCTION
OUR OPERATIONS
INVESTMENT HIGHLIGHTS
FUTURE DEVELOPMENTS
- 32 -33
Future Developments 2016 and Onwards
Parque Arauco has announced projects that will add 228,000 m2 of GLA over the next few years
and will require an investment of US$ 819 million.
Estimated Total GLA Owned GLA Total Investment Total Investment
New Projects Type Country Format
Opening Date m2
% Ownership
m2 in local currency1 USDMM2
Parque Angamos Greenfield Chile Neighborhood 1H18 11,000 55% 6,050 886,000 35
MegaPlaza Villa El Salvador II Greenfield Peru Neighborhood 2H17 11,000 50% 5,500 36,000 11
MegaPlaza Express Huaral Greenfield Peru Neighborhood 1Q17 16,500 50% 8,250 38,000 11
Various Projects SCP Greenfield Peru Neighborhood 2H18 19,500 100% 19,500 180,000 54
Viamix Colonial Greenfield Peru Strip Center 1Q17 3,000 100% 3,000 25,000 7
Arauco Premium Outlet Bogotá Greenfield Colombia Outlet 1H17 13,000 100% 13,000 78,000 26
Subtotal 74,000 55,300 144
Estimated Total GLA Owned GLA Total Investment Total Investment
expansions Type Country Format
Opening Date m2
% Ownership
m2 in local currency1 USDMM2
Parque Arauco Kennedy Expansion2 Expansion Chile Regional / Hotel 2H21 11,000 100% 11,000 5,355,000 211
Renovación Parque Lambramani Renovation Peru Regional 2H17 N/A 100% N/A 39,500 12
Hotel Bucaramanga Expansion Colombia Hotel 2H17 N/A 100% N/A 17,500 6
Subtotal 11,000 11,000 229
Total GLA Owned GLA Total Investment Total Investment
projects incorporated in 2016 Type Country Format Oeening Date
m2
% Ownership
m2 in local currency1 USDMM1
Mall Costa Pacífico Acquisition Chile Regional 1Q17 30,000 100% 30,000 1,520,000 60
Parque La Colina Greenfield Colombia Regional 4Q16 64,000 100% 64,00 672,000 224
Arauco Express Antofagasta Greenfield Chile Strip Center 4Q16 6,000 53% 3,160 320,000 13
Viamix Chorrillos Expansion Expansion Peru Strip Center 4Q16 1,500 100% 1,500 9,500 3
MegaPlaza Norte Libertadores Expansion Expansion Peru Regional 4Q16 9,500 50% 4,750 53,000 16
Megaplaza Norte Cine Conquistadores Expansion Expansion Peru Regional 2Q16 7,500 50% 3,750 38,000 11
Arauco Express Ciudad Empresarial II Greenfield Chile Strip Center 2Q16 4,500 53% 2,370 319,000 13
MegaPlaza Express Jaen Greenfield Peru Neighborhood 2Q16 14,500 50% 7,250 47,000 14
MegaPlaza Chimbote Minority Interest Minority Interest Peru N/A 2Q16 N/A N/A 4,620 28,600 9
Inmobiliaria Viña del Mar Minority Interest Minority Interest Chile N/A 2Q16 N/A N/A N/A 2,137,500 84
Arauco Premium Outlet Coquimbo Greenfield Chile Outlet 1Q16 6,000 100% 6,000 309,000 12
Arauco Express Recoleta Greenfield Chile Strip Center 1Q16 3,500 53% 1,843 115,000 5
MegaPlaza Chimbote Expansion Expansion Peru Regional 1Q16 2,500 50% 1,250 9,000 3
InOutlet Premium Lurín Greenfield Peru Outlet 1Q16 8,500 100% 8,500 76,000 23
Plaza Jesús María Acquisition Peru Neighborhood 1Q16 14,000 100% 14,000 53,500 16
Subtotal 173,000 149.372 506
Total 258,000 215,672 879
Remaining investment as of December 31, 2016 311
1) Projects in Chile in UF, in Peru in ThPEN and in Colombia in MCOP 2) Exchange rate as of December 31, 2016: 226,347.1 CLP/UF, 669.5 CLP/USD, 3,00.3 COP/USD, 3.4 PEN/USD.
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2) In addition to the 11,000 m2, this expansion includes a 401 room Hilton by Hilton Hotel and largest hotel convention center in Santiago.34
Parque La Colina was inaugurated in December 2016
Committed brands:
- 34 -35
We announced a new expansion of Parque Arauco Kennedy
Hotel Operator:
Project Details:
Investment: 5,355,000 UF
5-star hotel: Hilton by Hilton
Rooms: 401
Convention center: 3,000 m2
Parking spots: 700
Additional GLA: 11,000 m2
- The project will have the first five star Hilton
hotel in Chile, a convention center, as well as the
incorporation of new stores and more parking.
- The five star Hilton hotel will have 401 rooms,
two restaurants, three bars, two pools, a gym
and an executive lounge. It will have the largest
hotel convention center in the country, with the
possibility of hosting over 2,800 people.
- The expansion will include a new flagship
Falabella store with almost 25,000 m2 of GLA.
This store will occupy the first four floors of the
expansion.
- 35 -36
Landbank
Total Cost Total Cost
name M2 % Ownership
(Local Currency) 1
(USD MM)
Quilicura 25,486 100% 78,000 3
Buenaventura 115,864 100% 455,000 18
Chicureo 47,614 100% 206,000 8
Los Andes 39,254 100% 117,000 5
Others in Chile 55,567 100% 445,000 17
Total Chile 293,785 100% 1,301,000 51
Parque El Golf - San Isidro 14,790 70% 109,000 32
Chimbote 42,657 100% 18,000 5
Talara 30,675 100% 9,400 3
Ica 12,643 100% 13,500 4
Chiclayo 6,608 100% 6,300 2
Others MegaPlaza 211,417 50% 115,000 34
Total Peru 318,790 65% 271,200 81
Neiva 49,537 100% 18,000 6
Valledupar 46,000 100% 30,000 10
Barranquilla 56,166 100% 76,000 25
Total Colombia 151,703 100% 124,000 41
Total 754,278 86% 171
1) Landbank in Chile in UF, in Peru in ThPEN and in Colombia in MCOP
The company also has a valuable landbank which will serve as the base for future development.
- 36 -37
Glossary
Adjusted FFO Margin - AFFO / revenues weighted by average occupancy for the period
AFFO -Adjusted Funds From Operations: Net Profit - Depreciation Monthly Sales/m2 -Monthly tenant sales divided by GLA weighted
& Amortization - Other Income/expenses - Share of Profit (Loss) by average occupancy for the period
of Associates Accounted - Foreign Exchange Differences - Income
Neighborhood Mall -A shopping mall with a GLA between 6,000
(Loss) for indexed assets and liabilities - Gains (losses) from the
and 20,000 m2
difference between the previous book value and the fair value of
financial assets - Deferred tax+ Associates accounted Adjusted Net income margin -Net profit / revenues
FFO NOI -Net Operating Income: Revenues + Cost of Sales +
Controlling Adjusted FFO -AFFO attributable to the shareholders Administration Expenses - Depreciation & Amortization
of the company + Associates accounted NOI
Controlling FFO -FFO attributable to the shareholders of the Occupancy -GLA paying rent divided by total GLA
company Occupancy cost -Minimum rent, plus variable rent, plus common
EBITDA - Earnings Before Income Tax Depreciation and expenses, plus a promotion fund that the tenants pay Parque
Amortization: Revenues + Cost of Sales + Administration Expenses Arauco divided by the sales of the tenant.
- Depreciation and Amortization Owned GLA -Total GLA weighted by Parque Arauco’s interest in the
EBITDA margin -EBITDA divided by revenues mall
EPS -Earnings Per Share: Net income attributable to the equity Pipeline -Greenfield and expansion projects under development
holders of the company/weighted average number of shares Premium Outlet - Shopping center located outside of the city
outstanding offering name brand clothing and goods for a reduced price
FFO -Funds From Operations: Net Profit - Depreciation & Regional Mall - A shopping mall with a GLA over 20,000 m2.
Amortization - Share of Profit (Loss) of Associates Accounted +
Associates Accounted FFO SSR -Same Store Rent: Percentage change in rent collected from
tenants that paid rent in both of the periods compared
GLA -Gross Leasable Area. Equivalent to the sum of all the areas
available for lease SSS -Same Store Sales: Percentage change in sales from tenants
that reported sales in both of the periods compared
Green Field Projects - Organic development of new shopping
centers Strip Center -A shopping center with a GLA less than 6,000 m2
Landbank -Land held by the company for future development Tenant Sales Tenant sales of the consolidated assets
LTM -Refers to information from the last twelve months UF -Unidad de Fomento: A chilean currency unit indexed according
to inflation daily
Monthly Revenues / m2 -Monthly revenues divided by GLA
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