Tellus Rio Bravo Signs Deals to Buy Logistics Properties for R$456.5 Million; Amazon to Be Largest Tenant

Despite its name, Log Recife is located in Cabo de Santo Agostinho, within the Recife metropolitan area. The property sits along the BR-101 Sul highway and has 80,160 square meters of gross leasable area (GLA), according to Market Analytics.

The building was developed specifically for Amazon and delivered in June 2022. Amazon occupies the entire property under a lease running through the end of May 2032, with annual adjustments tied to Brazil’s IPCA consumer price index.

The agreement is structured as an “atypical” lease under Brazilian law, commonly used for build-to-suit properties and generally restricting rent reviews during the lease term. If the tenant terminates the agreement early without cause, the penalty equals all remaining rent payments.

Following the acquisitions, atypical leases are expected to account for 88% of Tellus Rio Bravo’s rental revenue, up from 16%. The average remaining lease term will increase from 4.7 to 5.6 years.

The portfolio’s property mix will also change. Under the manager’s classification, Class A+ logistics properties will increase from 40% to 70% of the portfolio. Approximately 90% of the portfolio will be Class A or higher.

BTLG Embu has 30,590 square meters of GLA across two buildings and 16 units. The property is located on Estrada Ferreira de Guedes in Itapecerica da Serra, São Paulo.

Three companies currently occupy 68.2% of the space: PMG Atacadista, B4you Log and Btwo Serviços Digitais. One lease expires in the first quarter of 2027, while the other two expire in the third quarter of 2029.

Nearly 32% of the logistics park’s GLA is vacant. To support rental income while the space is marketed, the seller will provide a minimum income guarantee for up to two years.

According to BTG, the guarantee is based on reference rent of R$30 per square meter for vacant space, adjusted by the IPCA and subject to the agreement’s terms. Payments will be adjusted as units are leased.

The agreement also includes an additional payment to the seller, structured as an earn-out, if rents rise above inflation during the specified period. The final purchase price could therefore exceed the announced R$56.1 million.

BTG said the negotiations initially covered three properties. According to BTLG11’s filing, the transaction was narrowed to a stake in BTLG Embu because of market conditions and the buyer’s available capital.

REsource contacted Tellus Investimentos for further details on why the transaction’s scope was reduced but had not received a response by publication.

Tellus Rio Bravo will pay R$292.2 million at closing, equivalent to 64% of the total purchase price. The remaining R$164.3 million will be due in 24 months, adjusted for any positive change in the IPCA.

Funding will come from property sales currently underway and new financing through a Brazilian real estate receivables certificate, known as a CRI. The fund has yet to disclose the debt terms.

In October, investors approved the sale of three properties, One Park, Contagem and Guarulhos II, for R$526.7 million. The disposals are part of the plan to replace a portion of the portfolio with new assets.

The acquisitions will extend lease terms and increase e-commerce exposure across the fund’s portfolio. At the São Paulo property, the priorities will be leasing vacant space, renewing the lease that expires in the first quarter of 2027 and maintaining rental income after the seller’s guarantee expires.