BB Asset Enters the Shopping Mall REIT Market With a Billionaire IPO Fund

The initial public offering was for R$ 800 million, but received offers exceeding R$ 1 billion

Denísio Liberato, CEO of BB Asset

By: SiiLA News

05/14/2024

BB Asset is entering the Real Estate Investment Trust (REIT) market with a billionaire IPO. Announced in May, the BB Premium Malls (BBIG11) fund entered the stock exchange with an initial public offering of R$ 800 million, according to the press release, BB Asset reported investment requests exceeding R$ 1 billion. The new fund will be advised by Iguatemi S.A. and will focus on shopping malls.

Denísio Liberato, CEO of BB Asset, commented on the success of the offering: "This significant result demonstrates investors' confidence in the differential of this product, which stands out both for the solidity of BB Asset and for the high-quality portfolio of Iguatemi premium malls."

According to the prospectus to the market, BBIG11 does not yet have an asset, but the expected distribution of income is 9.04% in the first year, 8.02% in the second, and 9.45% in the third - this in an estimated net worth of R$ 800 million.

In the document, the manager informs that from the second year, for five years, Iguatemi will have the option to purchase 50% of BBIG11's assets - the purchase option may be exercised more than once, up to a limit of 50% of the assets.

BB Asset has over R$ 1.6 trillion in assets under management, considered one of the largest in the country, holding 19.09% of the fund market share.

Read more: Retailment, Services, Events, Webrooming, and Showrooming: Meet the Trends for Shopping Malls in 2024

Outlook

According to Danilo Barbosa, partner and director of Clube FII, the arrival of a new fund in the market is important, especially in the shopping mall segment and with the recent Selic rate cut.

"In the last two years, shopping mall REITs have shown the best performances in the brick sector, demonstrating the resilience and adaptation of this business model. Shopping malls have been reinventing themselves; they are no longer just shopping malls anchored exclusively by major retail chains. Currently, they have evolved into spaces that prioritize experience and offer a variety of services, becoming places for socializing, services, and interaction. This change reflects an adaptation to new consumption habits and customer expectations, making them true living organisms in constant evolution," says Barbosa.

Moreover, the executive explains that this moment of reduction in the Selic rate could lead to more funds emerging. Another interesting factor Barbosa mentions is that out of the 35 listed funds in this segment, only 10 have assets exceeding R$ 1 billion.

"The average asset value of shopping center REITs is around R$ 870 million. An interesting aspect of the new fund, such as BBIG11, is its partnership or association with Iguatemi, known for focusing on high-income audiences, differentiating itself from most shopping center REITs that tend to focus on the B and C class audiences," he concludes.

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