HBR Realty Empreendimentos Imobiliários S.A. (HBRE3) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to HBR Realty's Conference Call to discuss results regarding the fourth quarter of 2025. This video conference is being recorded, and the replay can be accessed on the company's website, ri -- www.ri.hbrrealty.com.br. The presentation is also available for download. [Operator Instructions] This video conference will be presented in Portuguese with simultaneous translation into English. [Operator Instructions] Before proceeding, we would like to clarify that any forward-looking statements are based on the beliefs and assumptions of HBR's management and current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore, depend on circumstances that may or may not occur. Investors, analysts and journalists must understand that events related to the macroeconomic environment, industry and other factors could cause results to differ materially different from those expressed in the respective forward-looking statements. Present at this video conference are Mr. Alexandre Nakano, CEO of HBR Realty; Mr. Alexandre De Freitas, CFO and Investor Relations Officer; and Mr. Alexandre Bicudo, COO. I would now like to turn the call over to Mr. Alexandre Nakano, who will start the presentation. You may proceed, sir.

Good morning, everyone. Welcome to the call to discuss the results of HBR. On behalf of the company, I would like to thank you for your interest and your time. And the purpose of this call today is to show some of the performance of the company, the main achievements that we made, and we're also going to provide some color of what happened in 2025. and glance upon the prospects for the future for the company. As usual, at the end, we will open for questions. Beginning from the highlights on Slide 3. I'm not going to read all the numbers since they are already on your screen. But basically, I'm going to convey some messages that would reflect what happened in the fourth quarter and the full year of 2025. I think the major number that I would like to draw your attention to is the G&A ratio of G&A and net revenue reaching nearly 21%, the lowest on record. We advanced 8 bps in relation to the previous year and to the sale process that have already been completed, 3 sales have already been completed in 2025, amounting to BRL 449 million, Hilton -- Hotel Hilton in Rebouças, 2 units of +Box and our HBR Corporate Pinheiros, which was a sale that we completed yesterday. And we communicated to the market that this was settled yesterday, we sold this asset to Hospital Israelita Albert Einstein. So he had the right of preference, and he -- we closed the deal. In the vertical opportunities, the highlights in addition to the sales of 2 units of +Box that was completed last year, I would like to draw your attention to the performance of this vertical. W has been in its first year of operation, and there is an adjustment that is typical of the business. But considering the revenue that was raised in the fourth quarter, you can notice that it has a very good capacity to reach its objective in terms of operation. So along 2026 and 2027, the operation will be ever more consolidated, ever more mature, so we are very confident that Hotel W will be -- bring good surprises to us. As to ComVem, I would like to draw your attention to the occupancy. We increased the occupancy level even with the 3,000 square meters of GLA that we incorporated in ComVem, and that would account for 30% of GLA. Even adding 30% of GLA, we managed to increase by 2 percentage points to the occupancy of ComVem. So what happened in terms of deliveries? We had 2 very important deliveries in the fourth quarter, namely Pinheiros and Brigadeiro. And in addition to that, along the year, as a reminder, we delivered Klabin and Rebouças. All this put together, we reached the 13,000 square meters of GLA. N3A, this vertical, as always, we continue maintaining the 100% of occupancy. And the good news was also the negotiation we made with our tenant of Faria Lima Tower with WeWork, where we managed to accommodate with a new value of rent, very much in line what we see in the area of Faria Lima. I'm going to provide more details about it. And this provides robustness so that we can look at the new assets that we're going to discuss more along the presentation. Yesterday, we completed an agreement and that brings us a lot of job because this is a recognition of the good work that we have been doing when we look at our assets. So I think the hospital is a first rate institution. And if it purchased one of our assets, that means that our properties are of high quality. And that shows the excellence in our real estate development. Another good news that I would like to share with you that happened in the end of last year were the legal approvals that we had for 2 corporate projects, one in Itaim [indiscernible] with Pedroso Alvarenga in the corner of those streets and also another one on Faria Lima. So at the moment, we are bidding for the construction works, and we are likely to start the activities as soon as possible. And the half of the year would be our target. And those projects that are under development, as you can see on your screen, we also have Itaim that we refer to Itaim 2. We acquired from Cyrela on Santo Amaro Avenue is likely to be ready in April or May this year. And the other also from Cyrela that we acquired are on Cotovia and Ibirapuera in front of shopping Iibraquuera mall, and this is something that is going to be delivered along the road still this year. And there is another asset that's going to be ready for the second half of the year on Duo Brigadeiro. So you can notice that the company has a very strong focus on those projects. And our focus is very much on campaign and the corporate towers. Alexandre Bicudo will provide more details on those initiatives. As to the HBR malls, Mogi and Suzano are malls, which have become the high level of maturity. Suzano has nearly 100% of occupancy. So we have lack of GLL, Urupema advanced very much this quarter, and we will provide more detail about those assets and the news that is about to come is related to those shopping malls. So I'll turn the floor to Alexandre Bicudo, who will provide details on the verticals of the retail segment.

Good morning, everyone. Thank you, Nakano. The fourth quarter was very interesting with a consistent evolution in the operating results of our dimension of retail. And talking more specifically about ComVem, in sales, we had BRL 114 million total, advance of 26% when compared to the fourth quarter of last year. And as to same-store concept, we had an advance of 10% to 38.2%. As to rents in the fourth quarter, we reached BRL 10.4 more than 38% when compared to the previous year last year. And we had 72% in the concept of same sales stores. As to occupancy, as mentioned quickly by Nakano, we have evolving constantly. In the fourth quarter, we ended at 86.9% compared to the 80% of the fourth quarter of '24, 2 points of growth even after adding 13,000 square meters of GLA. These are consistent results. Also in NOI, we evolved plus 40% in comparison to the fourth quarter of last year, 6.3 million. We made those 2 deliveries in the fourth quarter, Pinheiros and Brigadeiro, both with 90% of occupancy. Clearly, those numbers would reflect the good position that we have and also our reputation with operators of active facade and convenience stores. And a very important benchmark in relation to 2025. This is the number for the full year. We have 75 new stores inaugurated with 16,000 of GLA, which is a record high for our history. In relation to malls, we also had a very good year with good evolution. So total sales grew to reach BRL 563.2 million, 5% in comparison to the same period of last year. Even with a low base, we grew 12% in Urupema. So clearly, this is affected by the maturation of the mall and the tenants. Suzano added 9.7%. And the news is the inauguration of [indiscernible] store, which was the main event for the fourth quarter, which was very important for us, and that would qualify of the region of the project for us. In concept of same sales stores, we reached BRL 508.8 million, a variation of 2.2%. We had a positive impact with stores, drug stores and cosmetics, beauty products, which have growing trends. And it was offset by a drop of results of sales related to cinemas and electronics. In relation to total rents, we reached a total of BRL 30 million, an increase of 5.8% when compared to last year. And the positive highlight would be Suzano and Olinda in the base of additional 11% and Urupema with a drop that was expected due to the store recycling, some tenants that exit that we were not having a good performance so that we can make adjustments to the mix. As to the same SSR, we reached BRL 19.8 million with a growth of 5.7% in comparison to the previous year and the highlights would be Urupema and Olinda, and we have fewer discounts for the rent and recovery of default tenants, and that caused a positive impact. In relation to the shopping malls occupancy. In the consolidated numbers, we had occupancy of 93.5%. It's important to mention that 1 year, we had 91%. So there was a growth in terms of percentage in the consolidated numbers of the group. And speaking shopping -- by shopping margin, we spent 19.4%. As Nakano said, it's a full occupancy, this vacancy is a strategy that we have been using so as to consolidate and position the asset. So it's attention that we've been giving to this operation to consolidate Mogi as an important mall for the area. And as of the first quarter, the mall will add 7,000 meters of GLL. As I said, the future is going to shine. In relation to Suzano, we had occupancy close to 98% and Riachuelo has just come to make the asset grow. And the 2% of vacancy is basically one specific store to which we are looking at the rent. As Nakano mentioned, it's a very mature operation and the prospects are very positive. And as for Olinda, close to 90% and the good news at the end of the year was the Uni cosmetic stores, which is growing fast. And it's totally aligned with the mix and the public that we see in the shopping mall. And it's now going to open in March the stores. So we have very good prospects in this sense. Urupema has a growing curve of occupancy. So we reached 82.2% of occupancy, which is a result of the work that we have been doing in the previous year to reposition the mix and also tenants that are on the way. And of course, it's going to generate good results for the next quarters. As a result, NOI was -- we had a growth of 8.6% in relation to the same quarter of last year. So these were the considerations that I would like to share with you on my side in relation to those assets.

Thank you, Bicudo. On Slide 8, I'm going to provide details about the corporate towers platform. As I had mentioned before, we have important deliveries to be made along 2026, something and also '28 and '29, which are the projects that I mentioned, where we just had the approval by the Pedroso Alvarenga city administration. And one of the concentrations, one of the efforts that we have been making is to decrease the development time of each project. And what do I mean when I say that? I want to try to deliver as soon as possible the first rent. So we are accelerating in a very consistent manner. We are very concerned with quality and with the project level, differentiated premium project. But however, I want to decrease the time between the acquisition of the land and the billing of the first rent. So much so that we are looking not only at the price, we're also looking at the delivery time because oftentimes, the amount or the value may be lower in a proposal -- second proposal, but if it takes 4 months longer than the second bidder at the end of the day, the economic value of the proposal of the second rate bidder will be better. Having said that, and so this is how we see the platform. So we are looking at the areas that are being delivered along the year. So we have good negotiations for Itaim 2 on the way. There's nothing concrete, but we have been having good discussions showing that there's a very high quality of the property that Cyrela is delivering to us. Paulista is also another one. I don't need to mention anything about the location. And we have been -- we've received 2 proposals for a possible sale and 2 rent proposal. So we have good problems to solve. We have to find what's the best solution for this asset. As to Faria Lima, again, the results are not being reflected in the numbers because the revision of the agreement happened in October, but it was only finalized at the end of the year and was officialized in January. So you're going to see this rent reflected in the first quarter of 2026. Moving on to the next slide, talking about opportunities. Once again, the good news or the major good news is the performance of W. And you can see the net revenue nearly BRL 30 million. So you can notice that this asset is so important for HBR, for this vertical. It's an operation that we have been looking at with a lot of attention, and we've been contacting Marriott, which is a major hotel company, but we need to look at that very closely. We can see that revenue is coming in due to the success of the hotel, the location, so we are working together with the local management team and Marriott in terms of expenses because this year where we have to find the right ratio in terms of expenses and revenues. And this is something we're going to continue doing in 2026. +Box, as I said previously, we completed and we sold 2 units that we had in our portfolio to good storage. On the next slide, Slide 10. Slide 10 shows the delivers that I have already mentioned. And these are the details, but I'm going to focus on the right. So the first graph on the top, you're going to notice that HBR is going to focus specifically on the next deliveries, which are ComVem and corporate towers. We have been growing organically with Convey, especially with Ibir for obvious reasons. But we also did some businesses with other incorporating companies. And other incorporators have been looking at us funds that have some stores nowadays that are empty. Since the vacancy is high, they want us to do the management of those spaces. So we have been looking at this outsourcing operation with a lot of caution of those spaces without having the physical property. So there are 3 or 4 conversations going on. I do not want this to distract our deliveries to our own assets. But we believe we have enough expertise and we have a production line that's already ready to absorb the management of those stores. As a reminder, you are likely to see in the media at large that in the city of São Paulo, they talk about 80-20, 80% of stores of active facades that are empty and 20% are occupied. What happens for us is the opposite. 80% of our stores are occupied. So we have the technology to commercialize and to do the management of those stores. And this is something we like to do, but we have the main raw material, which is the plant and the location. The towers at the end of the day is the same. They are very similar at the end of the day. And what adds value is the location in the corporate tower. And we're always on the lookout for good land as it was the last acquisition, which is our project in Faria Lima. And on the graph below, you're going to see the delivery schedule. And in 2026, our focus when you see ComVem at 3A, you can see what are the spaces that are going to be delivered to us this year. Now I'll turn the call to Alexandre De Freitas, who will provide details about the financial aspects of the period.

Hello. Good morning. Thank you, Nakano. Thank you, everyone, for attending the call. I'm going to start talking about the managerial financial performance, drawing your attention to net revenue. We stood at BRL 61.5 million, an increase of over 50% when compared to the fourth quarter of 2024. And this was driven by the growth of opportunities with W performing in a very strong way in the opportunity vertical, but also with ComVem and the operating efficiency in shopping malls. So this combination shows the results, when compared to fourth quarter of '24 of more than 50% of improvement. And we also look at IFRS, so the number is even higher. And when we look at NOI, we see that all platforms have been contributing to improving the results with a focus on the shopping malls. But operationally, we can get relevant improvements that generated this higher efficiency. And now on Slide 13, we see the lowest historical ratio between G&A and net revenue. We reached the level of 20%, 20.7% to be exact. And when we compare against the fourth quarter of 2024, we had a relevant reduction. And when we compare to previous periods, the curve is going down. I'd like to say that you have growth, you have an increase in revenue. But it's very also important to mention that there was a drop that has been constant in our G&A. So this is a direct result of hard work, organization when we look at what we're doing in the company and find the best possible pathway to reduce costs. And of course, with many deliveries. Bicudo mentioned in his speech, the deliveries of ComVem. We had more than 15,000 square meters of GLL in 2025, and there was a reduction in SG&A. When compared to 2024, we had a reduction of 5%. So we can be even lower than inflation. So this is a very relevant information, which is very much in line with what we've been mentioning in the previous calls, which is a focus on operating efficiency. Moving on to Slide 14. We continue talking about the financial metrics. EBITDA reached BRL 26.5 million in the fourth quarter, an increase of nearly 36% when compared to 2024 with an EBITDA margin of 43.1%. This EBITDA is being supported by the growth of revenue, but also by the efficiency in costs. When we look at the graph down below, the EBITDA shows the growth of 35% in the managerial, 36% in IFRS. And when we look at FFO, it's worse when compared to 2024, and this was driven by the leverage level, higher expenses related to the macroeconomic environment of 2025, and we also have worse results in FFO. But when we look at income when compared to 2024, we can see an improvement of nearly 20%. This is the result from the Einstein negotiations, and we also have the impact of IFRS when we evaluated the assets. Moving on, when we talk about CapEx, I always like to mention and we like to make it clear that we are constantly evaluating our CapEx curve for the years to come. So this is the homework that we assumed back then we are going to look at the expenses at all times, and we have been very diligent in relation to this. So when we look at the curve of 2026, we see the concentration in 2026, but it's very important to draw your attention to the fact that just like when we had as a result of the end of 2024, when we go to the fourth quarter of '24, and we see the projection for expenses for 2025, we had a number of BRL 335 million for the use of CapEx at the time. And we spent in 2025, BRL 175 million. So we managed to allocate more than BRL 200 million. This is what I want to say. The message that we want to convey, every call, we are discussing this, CapEx is our most important raw material, which are the assets that are going to provide profit to us. And this is going to be the differentiating factor, while other people are looking for land and opportunities. We have a very well structured for the years to come. But it's also important to say that we have always said the macro environment was going to be challenging, an environment that was changing along the time. And the company allocated all the efforts canceling some projects, migrating to others. And we ended the year with expenses at BRL 200 million lower than expected. It's very relevant and part was delayed along the year. When we look at 2026, a little bit of the concentration is because of those reasons. So in 2025, we delayed some things for 2026. But I would like to stress that since we have a very well-structured pipeline, and we are always reevaluating. We're always looking at the CapEx curve very carefully. So this is essential for us. On Slide 16 is the slide of indebtedness. We closed the quarter at BRL 1.5 billion in net debt. It's important to mention that sales of +Box were settled. They were completed in 2025 with resolutions made for 2026 and the proceedings from those sales entered the company in 2026, and this reduction of net debt will only be impacted in 2026. So it remain at BRL 1.4 billion if we make adjustments according to what I said. When we look at the amortization schedule, another important thing to consider is that our debt is for long term. There's nothing very relevant in the short term, not in the next 5 years. It's debt with very competitive costs. When we look at the picture, graph, we can see that we are talking about TR+, IPCA+ with very low cost, very attractive prices with a very aggregated profile. So there's no pressure on us in relation to the debt. Of course, the financial expenses impact the FFO, and this is something very important for us. We know the importance of this metric. And the recycling of assets has the purpose of equating the difficulty that we've been facing in this regard. But it's important to mention that we have no pressure related to indebtedness. In the last graph, we break down the project and the debt. So they are linked to the projects that we have. So this is what I had to share with you, and I turn the call back to the operator.

[Operator Instructions] The questions submitted in writing that are not answered will be later answered by the IR team. Our first question comes from Matheus Meloni with Santander.

Could you provide more details on the change of sale of 3A Faria Lima? And the second question is the following. Could you provide prospect of what you can expect of the ramp-up of the hotel in 2026?

Thank you very much for attending the call and for the questions. In relation to Faria Lima, I cannot disclose a lot of details because of the confidentiality of the agreement. But we started the discussion in the middle of the last year. And basically, the deal was made based on money. So it was a down payment and then the future installments paid cash. And the due diligence happened, everything was good, successful. But what was happened is that -- what happened was in the beginning of December, the acquirer tried to change the future installments to a quota structure. So we understand that Faria Lima because of the region and because it's a trophy asset, the best way of dealing with that is not using quota structure. In October, we started the discussion with WeWork, and we managed to reach a level of rent, which was higher, even higher than the previous proposal. It had that or not because at higher than a certain price, we had extra values for the payment for the asset, and we would be entitled to that. But considering that they proposed a change in the structure of acquisition, we decided not to go on, and we decided to reopen the process. And this is going to happen in the second half. In relation to W, this is a little bit of what I mentioned during the call. It did very well in 2025, driven by its operating excellence, its location because it's the first W in Brazil. And now this is the idea. We are going to continue with the revenues that have been coming in, and they come from 2 lines, basically, which are rooms and food and beverages, and room -- beverages and food due to the number of events. So we are going to continue with that with a lot of discipline in relation to the expenses. We are going to try to bring a major balance between revenues and expenses. Thank you very much, Matheus.

Our next question comes from Herman Lee, Bradesco BBI.

We have seen that the transaction of the asset of Faria Lima had its schedule adjusted, and there will be a change in the quarter. Could you provide more color on what happened?

Thank you very much for taking part in the call. For the answer, I think I've already answered part of it, but only to add, the most important thing is that we are going to continue with the sales initiative from December up to now. One or two companies were showed interest in purchasing Faria Lima. It's a very seducing asset, especially with the new rent level. And in the second quarter, we are going to have an initiative of structured sale in the market. It was in our sales pipeline. It's important for our cash balance and indebtedness, and we're not going to give up. We are going to continue selling Faria Lima. Thank you.

Our next question comes from Cesar Oliveira.

Excluding the sale of 3 Pinheiros, net revenue grew more than 50% in the period. Which are the platforms that are likely to sustain this growth for 2026? And what would be the organic growth expectation for the future?

Hello, Cesar, thank you very much for the question. I'm going to start answering your question, discussing the results. I think the result reflects the operating efficiency that we have been mentioning. I have mentioned the capacity that the company had to implement improvements along the journey, even with a large number of square meters being delivered. So this is a result of the diligence that we have been adopting every day. And we look at those who are important for this performance is W -- Hotel W and also our efforts to reduce costs. So we still have adjustments to make. This is part of the cycle. This is just business as normal in an initiative as this, just like what happened in commercial assets and hotel units, you're going to have a material curve. And since we have a high level of deliveries, the costs always arrive first. Our idea is to reach a balance as soon as possible. We have been working on revenue, and we have also been working on expenses with the people who manage the hotel. And this is done in the battle front as an everyday effort. This is one driver. The other driver is ComVem. Quarter-on-quarter, the performance has been improved and the results have been delivered in a consistent manner along the period. When we look down the road, we have to look at 3A. Since with the delivers that we have been making and with the market demand in the corporate dimension, I think everybody see in the news that several companies have been changing their regimes. They are moving away from home. They might allow work from home or less. So we can see this reflected in the market. So we see a delivery of assets with high added value, assets that have the right profile for some specific regions. So these are the 3 segments moving on. And when we talk about organic growth, on Page 10, we can see a graph of the deliveries that we are going to make. And so this is all very clear. When we look at 2026, we see some of ComVem and a big focus on 3A. I think 3A is very relevant to our strategy. And this aligns with the market timing in terms of the dimension -- demand that this kind of product is having.

Our next question comes from Gustavo Cambauva, BTG Pactual.

My first question is related to ComVem segments. At the operational level, the assets are performing very well with SSS, which are strong and high level of occupancy. How do you see the market moment to continue with this portfolio? So what would be the possible transaction in those assets? Is there a possibility of sale involving several -- multiple -- several assets at the same time? My second question is related to 3A. According to sectorial area, we can see the offices has been improving a lot, even surpassing the pre-pandemic levels, especially in some regions in São Paulo. Do you see this recovery? And could you talk about the Paulista asset? What's the cap rate that we can expect in a possible sale? All this information would be of great help.

Thank you very much for taking part, for the time you took to ask the question. ComVem, ComVem is something that has been bringing us a lot of surprises -- good surprises to the market. And this was expected for us. So this is a growth -- a quarterly growth with good results, 2-digit results. And that shows that it's a resilient retail, good locations, good operations. Bicudo and his commercial team have been doing a great job fulfilling all the stores. In 2025, 3,000 square meters could have lowered the occupancy rate. On the opposite, it increased 2 percentage points. And that shows that we have been doing the right thing. This is not by chance. We have been working hard. These are assets that are geographically well positioned. We have 40 assets in different locations at the operational level, it's more work than a mall, which is contained in a Box. But answering your question about a possible transaction, this is good because you mitigate risks, one would offset the other one. If one is doing well, the -- it can offset the other one, which is not. To answer your question directly, the direct answer would be yes. We're going to sell ComVem. It's not a specific or one-off sales. We're going to sell a portfolio. The way we see it is that this is going to be done by means of an urban income fund where the 40 units will be inside the fund. And it's a formula that will be ready for the next -- for the 22 and the others we are going to use in the future. This is the way we see it and HBR would be a company to commercialize. We have 4 negotiations to materialize this urban income fund. And on purpose, we left it for the second half of the year because we were focused on the sales that we made recently. So we believe that we are going to bring good news for the second and third quarters of this year. In relation to 3A, you're absolutely right. Market mentioned a lot about the high occupancy of the main clusters of São Paulo, which are Itaim, Gralin, Faria Lima, but of course, we also see that Rebouças has high level of occupancy and now people are even considering Rebouças 2, which is on Pinheiros Avenue. And now we are going to have assets around Pinheiros Street. So clearly, this is a good return. It's a good vector for growth. And why is it happening? It's because there are no corporate towers. There are not many -- there are not so many major towers there. And it's not even the price. It's the fact is more geographic. The Towers, the vacancy is dropping a lot. Recently, everybody saw Nubank renting Cyrela building because the company decided to decrease -- home office work, you know, the hybrid work. And this is something that is also happening in other institutions. So with the conversations we'll be having related to Paulista, we understand that people will be back to work in person. So this institution looks for us because they need more square meters for their offices. So we have been having the 2 conversations related to Paulista for a possible acquisition and also other conversations related to rents. In relation to cap rate, I particularly do not like to trade cap rate in buildings that are just being delivered. Because of the evolution of the rent. I believe -- you look at -- you need to look at the asset in terms of cap rate as of the third year when you have the first review, this is the moment when the rent levels reach their maturity. So I'd like to look at the break price, and this is how I see it. I'm not saying that this is the truth that has to be applied to the market. But Paulista is fashionable again. So I see their aggressive cap rates for that region. Of course, it's not -- we're not talking about Faria Limas, but the levels are increasing and reaching very good levels for the entrepreneur.

Our next question comes from Paulo.

The release mentions that the active estate market operates with occupancy on average of 20% and 40% and ComVem ended with nearly 90% in the fourth quarter. Why this difference when compared to the market?

Thank you for the question, Paul. This is Alexandre Bicudo, answering your question. It's very important to have this prospect for us, how much we've been doing well with this high occupancy rate. There are 2 factors to explain. First is the expertise that HBR has that it has developed along the previous years. And second, in addition to the expertise we have, we have a focus -- for example, we work on the payment of layout. We do a very strict financial planning, commercial planning, commercialization. We have a sales team focused exclusively on renting ComVem. We select the store owners. We evaluate the segment of all the construction works. And we are very careful in the operation. We are very careful in the daily operation, be that in landscaping, cleaning, organization. In other words, we are very cautious since the beginning of the process until the long-term operation. And I understand that this is what differentiates us from the market of active sales in general.

Our next question comes from [ Samuel Magalanes ]

I would like you to provide some more color on the portfolio recycling, if possible. The current assets, which are the ones that you believe that are mature enough for the process? Did you consider the possibility of negotiating with the real estate fund so that we can deleverage the company, and it will generate administrative amounts.

Yes, you really understood the spirit of the company. Above all, and this is something that I've always said, HBR is not a simple property manager. We are a developer from the land purchase, how to develop the best project, maturation of rent and recycling. Yes, we, of course, expect the asset to mature so that we can start selling it, sometimes a little bit before, a little bit later depending on the market moment. But as a whole, we wait for the maturation to happen and when we understand what's the right moment to put it for sale. And in real estate funds were closed in the past periods. We believe it's going to reopen as a result of the interest rate. So that would encourage the market to put more products in the market. And when a real estate fund is granted, they need good assets, physical assets. And without being petulant, HBR has the good physical units in the commercial dimension and in retail dimension. As I mentioned previously, our purpose is to include conveying in an urban fund and do the management of those assets in the fund to generate the revenues that will contribute to our SG&A. Thank you once again.

The question-and-answer session is closed. We would like to give the floor to the CEO of the company, Mr. Alexandre Nakano, to make the company's final remarks.

Once again, I would like to thank you all on behalf of the company for your interest, for your time. These are questions that are always discussed in the recycling of the assets. We live cycles of development. We are ending the first cycle since we went public. And this is done by means of selling the assets, so as we started the new development cycle, which I call Cycle 2. From the viewpoint of management, the word for the fourth quarter of 2025 and the full year of 2025 is discipline, discipline that we had good operating discipline when we look at SG&A, we were very focused on costs. When we -- we can see the increase in revenues compared to what we saw an increase of SG&A, we see that the ratio has improved a lot. The ComVem grew by 2 digits, the malls needing expansion because we no longer have stores to rent and Mogi, Urupema in a new phase, W performing so well. Faria Lima rent also above what we expected. We managed to position it in the asset. That gives us more conditions to sell the asset well when compared to the proposal that we had at the end of the year and discipline in the recycling agenda. So along 2025, we made nearly 0.5 billion in sales. And even with all diversity of the year, elections, challenges and all demand that we see in the media, the World Cup, even though it's entertainment, but it brings distraction in the business world. But even considering all this, we are very enthusiastic what is about to come in terms of sales. Once again, this is founded in the quality of the assets that we have, the quality of the rents and the properties. We are going to sell Faria Lima. We are going to have minority shares in our shopping malls and the sales of ComVem. And as was mentioned by Bicudo, these are not going to be one-off sales, but we are going to use a fund that will be able to market well. And our focus and energy is to maintain all those good operating levels that we posted in the fourth quarter of 2025 and full year of 2025. This is our duty as the management of the company maintain those levels in all verticals. And I also always do an analogy, especially in relation to Dalpiero's work in his best tool is the levels of cash and indebtedness. So considering all the recycling and creation, we expect to lower the indebtedness level of the company and the profile of the level 2/3 of it are very attractive profiles. And even so, we believe there is room to lower it even further, and we're going to lower the indebtedness level and to balance the cash. The company has recently announced the distribution of dividends that we are going to materialize along with 2026. And this is a demonstration to the market that the company generates value to the shareholder, and we're going to do this. And this is why we are making all those sales, and this is why we are making all those operational efforts to maintain the balanced cash so that we can go to the new cycle of development, Cycle 2 and also distribute the dividend and to lower the indebtedness level of the company. Once again, thank you very much. Great weekend and a very good Friday.

The video conference of HBR Realty is now closed. We would like to thank you for your participation, and have a nice day.